Third-party data isn't what it used to be: it's becoming harder to source. What once was the gold standard for marketers and advertisers is now facing a decline. This is caused by technological, legislative, and consumer behaviours.
What's Causing The Decline?
Web browsers have begun phasing out third-party cookies. Third-party cookies are instrumental in gathering and storing third-party data, meaning marketers and advertisers will soon have to look for different ways to target new customers. For instance, Google's Privacy Sandbox initiative seeks to eliminate cookies by 2024 and has introduced new ways for targeted ads.
Legislation, too, is playing its part. Laws like the GDPR in Europe or the CCPA in California give consumers more control over their data. These regulations impose strict guidelines on how companies collect, store, and use consumer data, making it harder for companies to rely on third-party data sources.
Consumer behaviour has also shifted. People are now more privacy conscious and are taking proactive steps to protect their data. Ad-blockers, VPNS, and privacy-focused browsers are on the rise, blocking the reach of third-party trackers.
Moreover, the quality and reliability of third-party data have always been a concern. Since it's aggregated from various sources, there's often no clear way to verify its accuracy. This issue is becoming even more pronounced with the increasing limitations on third-party data collection.
What about first-party data?
While the increasing challenges in sourcing third-party data may seem like a setback, it has led some companies to focus on sourcing first-party data. This data, collected directly from consumers, is more accurate and relevant, making marketing efforts more targeted and cost-effective. However, first-party data does have limitations:
1. Limited Scope: First-party data is confined to consumer interactions with a particular
company or brand. While you might have detailed data about how users interact with
your website or app, you lack broader insights into their behaviour outside your
ecosystem.
2. Building Direct Relationships: Collecting first-party data requires a direct relationship with the consumer. This could be through loyalty programs, email subscriptions, or other engagement tools. Establishing and maintaining these relationships require resources, both in terms of time and money.
3. Quality over Quantity: While first-party data is inherently more accurate and relevant, it might not provide the vast datasets that third-party providers once offered. This means businesses must be more strategic in using this data, focusing on depth and quality over sheer volume.
As businesses grapple with the evolving data landscape, they must explore alternative solutions to continue achieving their marketing goals.
Alternative Data Solutions
Yes, both first and third-party data have their challenges and limitations. However, there are strategies businesses can adapt to address these gaps.
Omni-Channel Solutions: By seamlessly integrating data from every customer touchpoint, whether online, via mobile apps, and even in-person interactions. Businesses can use these touchpoints to develop detailed customer profiles, refining their marketing strategies. As sourcing third-party data becomes more challenging, the insights offered by omni-channel interactions offer a valuable alternative to engaging customers.
Leverage Zero-Party Data: Zero-party data is information that consumers willingly share with brands. Unlike first-party data, which is collected based on user actions, zero-party data is provided by the user. This can include forms, survey responses, feedback, and preferences.
Customer-Focused Services: Instead of relying heavily on data collection, businesses can offer value-driven services catering to customer needs. By providing these services, companies can create win-win deals encouraging consumers to share their data. Prioritizing customer-focused services fosters stronger relationships and earns consumers' trust. For instance, banks offer free mortgage calculators as a way to understand what customers are looking for while providing value. These services also create additional touchpoints from which companies can collect data.
As the data landscape continues to evolve, companies need to adapt. That's why Cyder offers innovative data solutions that balance companies' need for data with consumers' privacy needs. Our platform provides businesses with real-time, actionable customer data with industry specific insights all while empowering consumers with ownership over their data.
Visit getcyder.com/cyderforbusiness for more information.