Meanwhile, the implementation of the European Union’s General Data Protection Regulation (GDPR) has placed meaningful restrictions on the sorts of information companies can collect, making the data they can use that much more valuable.
But despite the extraordinary importance of first-party data to the modern business, most firms still don’t have the infrastructure in place to capitalize on it. For some brands, first-party data is siloed away with their marketing agency and ad tech platforms. For others, the data is there, but they don’t have the right people and systems to execute on it.
In order for brands to keep up in our new first-party world, they’re going to need to adapt. This means they’ll have to hire the right people, take control of their data, implement robust, transparent processes, and importantly, choose the right technologies to automate personalized offers throughout the customers’ journey.
Taking the reins
One of the biggest challenges many brands face is that they don’t have easy access to their own first-party data. According to a recent report from the data management and research firm Unified, most advertisers don’t know the length of time needed to see their data after they switch agencies, and 86% are not fully confident in their ability to assess historical campaign performance.
Rather than allowing this to happen, brands must invest in their own infrastructure for taking control of their data. In addition to acquiring the right technology tools, firms that work with agencies must be careful to include written information in their contracts that gives them ownership of their data. When building new infrastructure, brands should be proactive in looping in their existing agencies and technology vendors to ensure that everyone stays on the same page and no data is lost.
Equally important, by allowing agencies and vendors to collect first-party data under the new GDPR regulation, brands would be exposed to risk if they don’t have a secure way to collect and use the data. So, if agencies inadvertently expose first-party data, brands need to take ownership of the exposure.
Already, we’re starting to see evidence that brands are taking action. According to an Interactive Advertising Bureau (IAB) report released in May, 35% of brands are reducing the role of agencies by moving parts of their programmatic operation in-house.
Why in-house isn’t enough
Of course, even if every brand has access to their data, many of them still don’t know what to do with it. It’s not enough to simply acquire the infrastructure necessary to store your data. You also need to hire a team of people who can put it to good use.
The challenge is that with the rise of the direct-brand economy, data specialists are in high demand from agencies and brands alike. In order for brands to achieve significant performance, they not only have to attract and retain top talent, but also ensure they’re using the right tech platform to leverage personalized and relevant digital ad messaging. Having a knowledgeable team is only as helpful as having the right tools and technology in place to support their efforts.
Building for the future
Over the next several years, first-party data will only become more crucial as the direct-brand economy continues to surge. According to the IAB, grocery store revenue is expected to increase at a rate of about 1% per year through 2022, while the market for direct-to-consumer meal kits is predicted to increase by a factor of 10x during that period.
Just as agencies are now dependent on their data practices to differentiate themselves from one another, so too will a new generation of brands separate themselves from the pack through first-party collection and execution.