In this interview, Rob McLaughlin, founder and CEO of AUDIENCES takes a look at the competitive advantage first-party data can provide, expanding on how both advertisers and publishers can capitalise on it. He also discusses how marketers can ensure they are being privacy compliant, in a society increasingly preoccupied with privacy. 

First-party data is becoming increasingly important as we move towards a cookieless ad landscape. Where does first-party data provide competitive advantage?

First-party data holds the key to addressability both now and into the future with explicit identifiers such as email and mobile which persist in ways which no other digital identifier, cookie or otherwise, could ever. Advertisers and publishers which can bring first-party identifiers with them into the advertising ecosystem are at a distinct advantage.

These advantages manifest themselves in four key areas:

1. Suppression – Driving acquisition only to net new prospects, deterministically excluding existing customers
2. Reach – Building lookalike audiences from a seed of your most desirable customers, enabling advertising platforms to use their proprietary data and models to extend to the most relevant audiences
3. Targeting – Speak directly to your existing customers to upsell, cross-sell, retain and service their needs
4. Retail media – Build outsized off-platform audience opportunities for suppliers and other commercial partners who will pay for access to a valuable addressable audience

How does the acceleration of first-party data in media affect advertisers and publishers? How can they capitalise respectively?

Advertisers, sometimes brands with a long-history of building first-party data via loyalty or CRM activities or newer brands who are prioritising the collection of consented customer data, have the most to gain. After decades of disintermediation between their own customer data and the media buying process advertisers are at last able to capitalise on their hard-won first-party data assets.

Publishers have a corresponding opportunity. As advertisers look for audience addressability and to match their data up to DSPs publishers are looking to provide their known populations of users in the most effective way. The more transparency and scale a publisher can offer in this match the further they will be able to benefit commercially in this environment.

From what you have seen, how prepared is the industry for the disappearance of third-party cookies? 

Preparation is patchy, with some advertisers and publishers at a distinct advantage to others. Many advertisers have significant first-party data assets and house it within modern data stacks and have conducted consent and marketing permission work to ensure they are compliance ready. Naturally, there are companies which have slipped behind, but most have these foundations. Few however have achieved the ability to build audiences and activate their first-party data in advertising, leaving the last mile to value still to take.

Publishers are further behind, leaving them open to significant competition from the walled-gardens for whom first-party data was always table-stakes. The publisher eco-system is undoubtedly in a rush to level-up in how it handles first-party addressability with many media owners prioritising projects in this space.

As society becomes more privacy conscious, how can marketers make sure they are being privacy compliant? 

Consumers have been openly frustrated with how their data has been harvested and used for decades now. Frankly these frustrations were never enough to change how media was bought and sold. Regulation in the form of GDPR, CCPA and similar created a lot of noise but similarly changed little of how the industry operated. It was only as Apple’s changes to Safari, IDFA for mobile, and increasingly Google with Chrome that user privacy is actually being addressed. I’m of course talking about the deprecation of third-party cookies and with these changes we have seen the currency of addressable advertising shift to a focus on first-party data.

It’s from this point that marketers now must consider how they leverage their first-party data in both a privacy and security compliant manner. Regarding privacy, if an advertiser hopes to use their first-party data in advertising they must consider how they will maintain user consent in line with changing marketing preferences. Practically this means ensuring that there is a fast add and remove mechanism for first-party data records. Further, that all first-party data takes on a non-PII (non-personally identifiable) state via irreversible encryption at source, using either the industry leading SHA256 methodologies or similar. Sharing customer data in the clear is simply out of the question.

Adjacent to privacy is data security. It is increasingly absurd to expect organisations to copy their data into adtech/martech platforms such as legacy CDP or DMPs. For marketers who wish to genuinely drive value from first-party data privacy & security are table stakes. Marketers must anticipate and plan for the requirements of their DPO and infosec colleagues.

What pitfalls have you seen for advertisers to be aware of and avoid?

Firstly, it is important to recognise that leveraging first-party data in advertising requires a focused approach. Many advertisers have wasted time and worse money on long and ineffective CDP initiatives. These technologies are fundamentally inappropriate for driving first-party data driven advertising in this privacy and security focused environment. 

Secondly, don’t expect the DSP focussed vendors to serve the interests of advertisers. We have seen attempts to push federated ID based solutions – these approaches limit an advertisers ability to leverage their first-party data and introduce deeply problematic questions about what happens once an advertiser matches their data to a federated ID service. I’m directly talking about advertisers' data getting used beyond their own use cases and compromising data privacy and security.

Lastly I’d point to the dangers of delaying considering how to best leverage first-party data in advertising. An effective strategy is going to require collaboration between marketing, data and technology teams within an advertiser and often agencies too. Planning for a first-party data driven advertising future needs to be prioritised in line with an organisation's ambitions for acquisition, growth and retention.

How does AUDIENCES fit into the advertising ecosystem? 

AUDIENCES fits within an organisation’s existing data and technology stack, nestled within where their data is already stored and managed (think Azure, AWS, GCP, Snowflake, DataBricks, BigQuery etc). From this location AUDIENCES provides advertisers and publishers an elegant pipe out to the places where first-party data can be most effective, most often into search, social, programmatic & CTV. This approach unlocks the privacy & security concerns which have held the industry back from realising the benefits of first-party data in advertising.

Advertisers such as Pets at Home, Three UK, and Parkdean Resorts leverage AUDIENCES to execute industry leading, commercially exceptional and award winning campaigns with proven value driving results. Publishers on both sides of the Atlantic are also accelerating the activation of their first-party data with AUDIENCES, changing the value model for the industry.