Drawbacks to first-party data in a post-cookie world

Drawbacks to first-party data in a post-cookie world
The Media Leader Podcast

As cookies deprecate, first-party data is set to become more valuable for advertisers and digital media owners.

But are there drawbacks to using first-party data? On a recent episode of The Media Leader Podcast, Havas Media Group’s chief data and product officer, Laura Kell, told host Jack Benjamin that first-party data, while useful, can limit new customer acquisition if overly relied on.

She also explained that there is not always going to be a business case for data clean room investment, even though it is the safest way by which to work with first-party data.

Listen to an excerpt of the episode or read a transcript of the conversation below:

The Media Leader: I’m curious how you view first-party data, because many people I’ve spoken to amid the decline of the cookie will say that first-party data must become more valuable. Do you see any drawback in using first-party data?

Kell: You’re totally right, the first-party data strategy is incredibly important now and there’s tons of folks on that in the industry. Some of our plans have got excellent first-party data.

This would be the only note of caution that I would give, before looking at the privacy part of it. A lot of clients rightly have been updating their privacy policies recently, getting things like consent management systems to help them with making sure the first-party data they do collect, they can use.

Assuming that that is done, if you look back at any classical marketing theory, you do not grow brands by only talking to existing customers. You have to talk to the total marketplace.

I think the one risk I’d put in on clients who focus too much on first-party data is you end up speaking only to people who are already engaged with you.

As I said, classical marketing theory would show that you need to talk to all people, including non-customers. Brands don’t grow by only focusing on their customers.

The Media Leader: It’s a really good point. If you were a digital media owner or publisher, how would you be wanting to integrate first-party data into your strategy?

Kell: It’s interesting. The walled gardens have options to use first-party data in their solutions. I was interested to see when Google started partnering with InfoSum.

InfoSum is a data clean room, for anyone who doesn’t know. We’ve been doing a lot of work with them. A lot of our plans have got InfoSum bunkers and it’s a great way of connecting to clients’ first-party data without the transfer of any first-party data.

This is the key thing: if I were a media owner, I’d probably be quite nervous about taking large amounts of first-party data into my environment.

I think that using things like clean rooms — and that’s how InfoSum have integrations, for example, with ITV, Channel 4, UKTV and lots of huge UK publishers. So you can connect first-party data directly into the platforms without the platform having to take responsibility for uploading that data on to the platform. I think that’s really important because media owners probably won’t want to be storing client first-party data. It’s quite risky.

I thought it was interesting to see that Google did the partnership with InfoSum and whether that implies that even they’re thinking they’d rather work with clean room technologies.

The Media Leader: Would you say that using clean rooms should be standard practice?

Kell: I don’t think it’s right for everyone. You have to make a business case for it. You have to say: “What’s the volume of first-party data that I have? Is it worthwhile to do it?”

A data clean room is an investment. You have to make sure that you’re going to use it properly and you’ve got enough data to use.

I’d probably say there’s a threshold at which it’s not worth doing. You need to grow your first-party data store before you start thinking about using things like clean rooms to activate against that or enrich that data.

I would say that there is a business case where you say the investment [could be] worth the results that you’re gonna get back.

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