Mark Howe, Managing Director, EMEA, Agencies & Industry Relations, Google
As I discussed at IAB Europe's Interact Online event on 3rd June, one of the biggest changes caused by the coronavirus pandemic has been the surge in people heading online to work, shop, and connect with friends. For many businesses, keeping pace with this huge behavioural shift has been hard. This recent article looks at how first-party data (information sourced from customers through CRM and other touchpoints), can help them keep up.
A new report by Boston Consulting Group (BCG), commissioned by Google, has found that first party data, when used responsibly, can drive increases in sales and revenue as well as boosting efficiency for marketers - something that is especially important as businesses navigate their way through the current situation and move towards recovery.
Why did you commission this work?
First-party data is becoming an increasingly important asset for advertisers, particularly when it comes to advancing digital maturity. The cause is clear - user demands around privacy are changing, and we have seen the ecosystem respond. Third-party cookies are being phased out, and tighter regulations mean that the whole industry is facing a fundamental shift in the way that they use data.
Our ambition with this research was to examine the first-party data opportunity that exists for advertisers in Europe. We wanted to better understand the perceptions, use cases and best practices surrounding first-party data.
The study involved more than 70 interviews with leading companies in seven European markets and across seven industries, and addresses the barriers that companies face to accessing and using this data, along with the key success factors that help companies to create value for consumers and competitive advantage for their business.
What are the key takeaways from this report?
There are several. Firstly the research found that effective use of first-party data delivers more relevant experiences for customers. It can also lead to revenue and efficiency benefits for the business as part of a two-way value exchange. Customers won’t willingly share their data with brands if they don’t understand this relationship. It is not enough for companies to collect and use data responsibly. They have to make sure that their customers know what data they are handling and what they get in return.
Companies that do it well - that’s those that draw upon all of their first-party data sources - can generate up to double the incremental revenue from a single ad placement, communication or outreach and 1.5 times the improvement in cost efficiency vs. companies with limited data integration.
Despite the benefits it can bring, we found that whilst nine out of ten marketers say that first-party data is important to digital marketing programs, less than a third are consistently effective at utilising it. The research also revealed that marketers need to couple organisational enablers alongside technical enablers to improve first-party data capabilities.
How does good first-party data strategy impact digital maturity?
This report builds on BCG's existing digital marketing maturity benchmark and shows that effective first-party data use is one of the most important drivers in digital marketing maturity. It demonstrates how companies can deliver more relevant marketing to their users, improving customer experience and showing up at the right moment consequently leading to business growth.
Where can I find out more?
You can read more and download the report on Think With Google.