The Increasing Value Of Building Your Database

The death of third-party cookies is not the death of online ads or online targeting. You are still left with first-party data, with a renewed importance on building your own database of prospects and customers.

I participated in a few conversations about this topic the last two weeks.  Marketers range from overreaction to no reaction when you bring it up, and I think the size of the marketer and the maturity of the company have a lot to do with their take on this issue.

Big companies that have amassed a large database of contacts are less worried about this issue because their database is considered first-party data, and you can still use first-party data to develop an audience.  Smaller companies that do not have an established (and deep) customer base are far more worried.  In the absence of reliable, scalable third-party insights, you must own the relationship in order to take control of your future.

A strong marketer has always known this, but the impending online climate change (and I use these words carefully) brings a fundamental fact back into the equation: You cannot rely on others to build your business for you.



Your growth is dependent on your ability to identify prospects, deliver something of value to them in exchange for their information, and engage them in a journey that brings them closer and closer to becoming a customer.  Doing that helps you build your database, which you then use as a primary means of engaging with a prospect over time. 

You also use that info for retargeting, and for building audiences externally for display, or to connect in-person at events.   The more people you know, the stronger your ability to reach out, target and even find people who are similar to them.

In this new paradigm, the walled gardens have a clear advantage.  They have a vast array of first-party data assets that you can leverage.  If you have a large database, and you partner with Google or Facebook, you can expect a high match rate and the ability to reach those people online. 

The “out of left field” fact is that all of a sudden Microsoft may just be back to a prominent position in online advertising because of all these changes. Its acquisition of LinkedIn all those years ago now looks very prescient and extremely important.  Couple that with its recent win for the ad placements in Netflix, and all of a sudden Microsoft is a real player in online ads for both B2B and B2C again.

Other considerations are partnerships and closed data networks.  Back in the rise of the data management platform (DMP), we used to talk about marketers creating closed data-sharing relationships with other marketers via the DMP.  This evolved into shared data lakes, which can become extremely valuable in a world dominated by first-party data. 

If you can find partners with complementary solutions and a shared interest audience, those partnerships can create larger pools of first-party, known data to work with.  The more people you “know” and can recognize on the online channels you choose, the more likely you are to maintain a competitive advantage.

Third-party cookies were a boon for online advertising, but they also became a crutch.   Marketers became overly reliant on these cookies to help them grow their business.  In doing so, many forgot the most important rule: The customer is the center of your universe.  Without crafting your own database of prospects and consumers, you were creating a house of cards that could crumble with the slightest breeze. 

So don’t overreact, but definitely don’t ignore the issue, either.  Have a plan and build your repository of customer data now, so you can continue to grow when the third-party cookie goes the way of the dinosaur.

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