third party data

Why Agencies are Ditching Complacent Data Providers

Incoming bans on third-party cookies, driven by Google and Apple, have made many agencies more closely scrutinize the origins of any third-party data they might be using.

A recent article from Digiday revealed that third-party data providers are starting to see pushback from data-savvy advertising agencies. Why? Incoming bans on third-party cookies, driven by Google and Apple, have made many agencies more closely scrutinize the origins of any third-party data they might be using. Incumbent data providers are being summoned to the boardroom to present to agency heads and prove their adherence to regulatory requirements, best practices for a privacy-first world, and the incremental value their data provides to their clients.

by Kevin Bauer

Agencies are right to be concerned about the ongoing changes to the privacy landscape and the impact of these on the ROI of marketing campaigns. By taking a more proactive stance on the value add of their data providers, agencies are accepting the impact the entire chain of providers have on their ability to maintain relationships with clients in this fast-changing environment.  Agencies, and the partners they do business with, must prove they can protect consumer privacy by design, while being value accretive to their clients. Despite the urgency, many data providers aren’t adjusting fast enough and are at risk of finding themselves being dropped or replaced.

Data providers who aren’t evolving will be left in the dust.

As we’ve seen, the blow-back from irresponsibly gained third-party data can significantly affect a company’s profile. Advertising agencies need other ways to ensure campaign success for clients. While much is still uncertain in this fast changing area, it seems to be universally accepted that one of the most important strategies for moving forward is to build around first-party data, or Earned Data, which build consensual and beneficial relationships with individuals that are privacy-first by design.

“The data privacy currents have pressed companies to clean up their data collection and retention practices, such as by providing people with notice and choice before collecting their data as well as honoring people’s requests for companies to purge their personal information.”
– Kate Kay

Our perspective on this is that companies not taking accountability and changing their data practices (or at the very least, cleaning them up) will be quickly made irrelevant, leaving only the data-careless to choose to work with them.

It’s not the end of all cookies – just a new baking method.

Google has recently espoused how important first-party data is for developing relationships between consumers and brands; so we can expect to see first-party cookies around for some time yet. Yet even Google has explicitly acknowledged that challenges remain in a first-party cookie world.  With data showing significant resistance to adoption of tracking, even on a first party basis, (only 4% of people accepting app-tracking in iOS14.5) Google has recently announced a significant update to its nearly ubiquitous web analytics platform by renaming it Google GA4 and announcing the much-enhanced use of modeling to attempt to fill-in gaps left by the elimination of tracking.  What this means for brands and the agencies that serve them, is a need to find new methods to fill in gaps and create genuine, actionable insight within the framework of consumer and regulatory expectations going forward.

The bottom line?

If you’re a marketer that relies on robust data for online advertising, pop-up ads, pinpointed audience-targeting strategy, or personalization for your existing customers and prospects, you’ll need to continue to follow the news around this phase-out and consider an alternative Earned Data approach as the phase-out nears.

An Earned Data strategy builds long-term, trust-based relationships between consumers and brands because it’s data that can only be captured directly from consumers. Earned Data goes far beyond clickstream and less transparent data sources like those sourced from third-party vendors. Earned Data is richer, more actionable and fully consented-to.

Kevin Bauer is SVP, Strategic Services at 3radical.

Photo by Divani (Diva) on Unsplash.

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