December 22, 2021

Data Driven Engagement in a Privacy First World

Organisations who focus on their 1st Party Data and explore new ways on how it’s used, will be the winners in the new on-line era.

It’s no exaggeration to say that seismic changes have taken place on how on-line experiences are being delivered and controlled.

User Privacy is the preeminent factor and whilst the changes have gained recent pace and prominence, it’s all part of the bigger picture of realigning privacy control back into the hands of the individual.

Much can be traced back to the introduction of the GDPR, giving EU citizens more control over how their personal data is used. This regulation also set a pathway for other regions, notably the California Consumer Privacy Act (CCPA), to take.

From a Big Tech perspective, Apple has firmly positioned itself on the side of privacy first, much to the ire of Facebook amongst others, by announcing the elimination of third-party cookies on Safari, a move mirrored by Firefox and significantly Google Chrome.

However in July this year, Google announced that it was delaying the move from 2022 to 2023. They stated that additional time was needed to solve many of the challenges removing 3rd party cookies brings, from ad measurement, delivering relevant ads and content as well as fraud detection. It’s an indication of just how much adjustment is needed as we move towards this new on-line landscape. In particular, Google is putting in place a “Privacy Sandbox” and researching new browser possibilities referred to as “FLoC”. With this approach, individuals will be associated with cohorts or groups of users which are large enough to be semi-anonymous to the targeting companies.

How has the use of 3rd party cookies changed?

The original purpose of third-party cookies was to streamline user preferences whilst browsing different websites. However this morphed into tracking individual users' actions, primarily through a third-party server, such as an AdTech vendor or via a tracking on the publisher’s website. Overtime and with greater public awareness, it has delivered greater weight and ultimately a tipping point for increased user privacy regulation and the tech updates to enable it.

On the mobile user front, Apple reinforced its position with the iOS 14.5 update, putting in place the need for explicit consent for any mobile ID collection. Apple users have the option to opt-in before apps and advertisers can use Apple device identifiers to help target ads and track how effective they are.

First announced during Apple’s developer conference last year, App Tracking Transparency (ATT) means that the user has control to say if they’d rather not be tracked. This disables App developers ability to collect an Identifier for Advertisers code (IDFA). The code is the key to enabling advertisers to follow users as they move from app to app or across websites, targeting them with ads as they do so, whilst also helping advertisers measure the performance of ads.

Why are Apple doing this? It depends on who you ask; they’re either on a mission to save us from the unbridled data-tracking which up to now was part and parcel of each moment on the web, or perhaps it’s simply an out-and-out power play to boost Apple’s capabilities and to numb that of other Big Tech. In reality it can be a bit of both.

A combined result of all the changes is the $169.7 billion digital advertising market will lose access to most third-party data, which has powered the programmatic advertising industry (advertising purchased and sold using software). Whatever way you look at it, it’s all a huge challenge for Advertisers & Publishers who continually search for better personalisation, accuracy and accountability and to maintain sustainable business models.

The 1-2-3 of Data

Looking across industries and use cases, this new landscape brings into sharp focus that organisations who develop a forward-thinking view of compliant and accurate data, will be better positioned to succeed where others may stall or fail.

Understanding data, where it exists in your organisation and then how it can be leveraged, are now more important than ever. With all this flux it’s important to have clarity on what each form of data means, where it originated and how to best utilise it.

First party data is the result of the direct relationships and interactions with customers or users. They give permission to use the data, thus enabling compliance with data protection laws and giving more control and transparency over what happens with that data.

It’s collected “first-hand” by the company and comes in many forms e.g. from actions taken across its websites, apps, products, social media channels or feedback systems. It can also come from off-line sources such trade events, sales calls or customer purchase history records. It is seen as the most valuable form of data as it’s reliable for giving an accurate view of customers, their preferences and trends.

Second party data is collected by another organisation, its secondhand. Often it’s shared between trusted partners who agree to share audience insights for mutual benefit, or it can be purchased directly, this however requires careful consideration to ensure it matches required needs and budget.

Third party data is collected and used by data aggregator companies that don’t have a direct relationship with consumers. The data collected is used to create targeted segments and is bought by other companies to further enhance their own first-party data and provide a larger audience scale.

It can range from purchase history and browsing history to names and email addresses. It’s important to clarify that the demise of third-party cookies does not necessarily mean that third-party data will also vanish or that it can’t be used, however how it is collected and its accuracy are increasing restricted and in focus.

The removal of cross app and third party cookie tracking presents not just a challenge but a new opportunity for organisations and agencies. There is a need to create value around the utilisation of 1st party data within marketing, advertising and within organisations own platforms. The advertising monopolies of Facebook and Google can no longer hoover up valuable customer interaction and touch point data across the web. Organisations will need to utilise other technologies to gain a more holistic view of customer journeys and trends, while retaining ownership and oversight of all of their data.

If we look at the fundamental reasons why data is collected (or bought) and used, it’s to tailor and personalise messaging, advertising, creative assets and services in an ever more granular detail. If done effectively the end result is increased conversations, sales, customer engagement and satisfaction.

The new forces in user privacy that restrict the collection and use of personal data are tightening targeting and prediction capabilities, all traditionally fueled by mass scale third party data.

Poor data management may seem like an inefficient yet inevitable consequence of siloed data across organisations. However, in reality it’s a massive missed opportunity and from the customer or user experience point of view it can mean make or break, as the result can mean receiving multiple, conflicting or inaccurate communication messages.

Are companies utilising these capabilities as much as possible?

In 2016, an Econsultancy and Adobe global survey showed that only 5% of marketers and e-commerce professionals use a single platform to manage data across multiple channels. It means data is siloed and stored in separate locations spread across the whole organisation.

Since then there has been significant growth in Customer Data Platforms (CDP), which combine disparate on-line and offline data to create a single customer profile and also drawing dependence away from using third-party data for targeting and prospect knowledge.

According to the Customer Data Institute, the CDP market has increased 30% from $1 billion in 2019 to $1.3 billion in 2020. Estimates see this figure reaching $1.55 billion in 2021, no doubt in part a consequence of all the data changes taking place.

Unifying Data to Optimise Customer Experience

As organisations adopt compliant processes and a 1st party data focused strategy, real competitive advantage and opportunity emerges through a complete, accurate and holistic connection with customers. Harmonising this approach, particularly through the use of aCDP, leads to a Unified Customer View, a highly valuable picture of every interaction they have with your organisation, whether that’s on-line or off-line.

As the Pandemic forced more customers on-line, it has placed even greater focus on organisations and brands to move from multichannel marketing, to omnichannel. This means that each customer channel and touchpoint, either on-line or physical, are interconnected to provide a seamless experience and purchase journey. It can be seen as the holy grail, however it’s now more than just an aspiration for organisations but the growing expectation of customers and audiences.

It’s backed-up by the stats. Companies with extremely strong omnichannel customer engagement retain on average 89% of their customers, compared to 33% for companies with weak omnichannel customer engagement. Furthermore, 77% of strong omnichannel companies store customer data across channels, compared to 48% for weak omnichannel companies. (Aberdeen Group)

Similarly, supposed personalised and targeted advertising and communications based on third-party data doesn’t always resonate with individuals. Global advertising and marketing agency, Ogilvy, refers to “banner blindness” with people tired of being advertised products they have no real interest in. They now expect more truly personalised and engaging experiences. No prizes for guessing that it comes back to the data and how it’s used.

For organisations that have a holistic, compliant approach to data will race forward with anew competitive advantage. The next stage for these organisations is how they can directly utilise this data in marketing, customer retention, acquisition and focusing on increasing theLifetime Value (LTV) of each customer.

Utilising & Measuring Data

Collecting, segmenting and analysing data is key for creating engaging and relevant campaigns for customers. With the amount of data, organisations that can best use this will capitalise the most. Increasing Return on Ad Spend (ROAS) and LTV are key metrics that consumer data is used effectively.

However, once a campaign is launched, the role of data doesn’t stop, it’s then used to analyse how the campaign performed.

We are all familiar with and see the value in A/B testing and specific campaigns for each customer segment and demographic. However as we slice and splice campaigns into smaller and smaller segments, the cost of creating these campaigns grows exponentially to a point where ROAS can be negativity effected or user experience is not improved enough per cost of media variation.

This is until now

VML is a technology that has been created to enable organisations to utilise any data directly within media. It creates unique personalised, contextualised video that is driven in real time by data.

All of your valuable first party data can be utilised to construct engaging personalised and contextualised videos instantly and at any scale - vitally, without ever sharing your data to any 3rd party, including with VML.

This is the only video personalisation, interactive and contextualisation capability that ensures your data remains solely within your platform and systems.

VML decentralises the video production process, automatically ensuring your data always remains within your platform and is never transferred elsewhere. Because of this, it enables you to be fully creative in developing much more engaging video content across internal and external use cases in ways that were not possible before.

Companies and agencies can now construct marketing and customer experience campaigns utilising data that relates directly to the viewer. This can be data that is directly personalised to the viewer, data based on their product or subscription level, or even contextual data through CDP predictions such as customer segment data or demographic.

Combining your data and media to better contextualise messaging through personalisation and trend recognition ensures much greater engagement with your campaigns. Why serve customers with flat media content that doesn’t truly resonate with their specific needs when you can now securely utilise a much broader range of data at your disposal?

What works for one customer may not work for another, so using VML you can create one campaign that has an endless combination of media variations. Powerful A/B video testing can automatically change the video your customers see based on how the majority have interacted. Unlike other technologies, this doesn’t just happen to one element within a video but to any part of it.

This can be enriched further by collecting data from inside your campaigns with surveys, polls and deep analytics that goes far beyond playback rates. Go yet another step further by changing what your customer sees next based on their response, interaction or engagement level - all in real time as they view the video.

With a two-way data API, VML not only utilises data from your first party systems, CDP or CRM, it can also push rich analytics on an individual basis back into your systems. You can view exactly what users interact, click, play, pause and purchase. This enables you to utilise this data to create more engaging follow-up campaigns and new audience segments based on richer data to ensure only the most relevant and engaging media is distributed.

Understanding and navigating this new environment of privacy first change is vital for every organisation who wants to stay ahead. Delivering truly personalised, relevant, seamless and real time content to each individual is where the winners in this new era will be crowned.

Combining managed and compliant data with new dynamic ways to utilise it is the challenge but those who succeed will build a new generation of trusted relationships with engaged, profitable and loyal customers.

Chris O'Hanlon
Head of Communications