THE CLOCK IS TICKING: BY JANUARY 2022, GOOGLE WILL HAVE BANNED THIRDPARTY COOKIES IN CHROME, THE MOST-USED INTERNET BROWSER ON THE PLANET. THIS IS THIRD-PARTY DATA DEPRECIATION IN ACTION – BUT DON’T FEAR, BECAUSE GETTING YOUR DATA HOUSE IN ORDER HAS MAJOR LONG-TERM BENEFITS FOR CUSTOMER ENGAGEMENT, EXPLAINS DAVID ELLIS, MD AT ANALYTICS SPECIALIST AND ADOBE PARTNER STATION10.
Q. Could you tell us about the difference between third-party/first-party data, and why now is the time to take action?
A. First party data is collected about an individual by an organisation with a direct relationship with them. Within that, there’s ‘zero party data’, information that’s declared by the individual to the company. There’s another group, which is going to become more important – ‘second party data’, effectively another organisation’s first party data which has been shared legitimately via data sharing agreement or consent. That’s quite common for media partners in particular, and I think that’s going to be a key mechanism in future. Finally, third party data is data collected about an individual by an organisation that has no direct relationship with them, like media cookies that cross domains and allow organisations to track ads, etc. Third-party data can be used to capture data more nefariously: there’s potential for ‘data leakage’, which browser companies and legislators are keen to crack down on. This is why there’s such a focus on moving away from third party data. There’s also the principle that people should own their own data: the idea of privacy has grown in particular since Cambridge Analytica and some of those other examples.
Q. So there’s a moral imperative. But the business case is also that first-party data is just better for your customers.
A. Yes, absolutely, this is one of the key things. The shift here is the focus on the individual customer. If you’re looking after data in a more ethical way, that is better for them, and it’s better for you, because it’s a way of winning or reinforcing trust. There’s very much a trend towards using data the right way, and that means the customer comes first. Some of our clients have that as a fundamental principle – DAVID ELLIS is MD, Station10, an analytics specialist and Adobe partner even if it makes their lives harder, they’ll collect only the data that’s best for the individual, rather than what might be arguably best for the business.
Q. On the flip side, what are some benefits of thinking about first-party data today?
A. Your data will be more trustworthy within your organisation, more trusted by your customers, and your prospects. It also allows you to collect much more detailed, rich data about your customers, so if you consider the third party ‘old world’, this allows you to know a little bit about lots of people. The first party world means you focus on fewer people, your customers: the people that actually you should care about that much more, but in much greater depth. This changes the way you can evaluate performance. If you apply trusted first-party data to the customer world, the lifetime value is really, really valuable. It’s probably the most important metric of all, because it gives you that indication of how engaged they are with the brand and ultimately how you’re monetising that over time.
Q. And this is going to be more important when we move back to the omni-channel world.
A. Right now, we’re multi device but online only. When [UK lockdown exit date] 21 June comes around, then we come back to a fully multi-channel world and that’s what the future has always been and will always be. Knowing fewer customers but more deeply, then pulling in different data sources and different data sets about your customers, gives you a really fantastic opportunity to build a rich data environment where you can really understand and get insights. On the back of that you can build experiences for them, or reasonably understand their customer journey a lot more easily. So there’s a real opportunity to embrace knowing your customer more deeply, and this holistic approach to understanding your customers and delivering insights and then actioning those on the back of that and creating these multi-channel experiences.
Q. Could you talk about the time limit & other challenges around getting to grips with data deprecation?
A. A By January 2022, Google Chrome, which holds 70% of the browser market, will not accept third party cookies. Safari and Firefox are already disabling third party cookies at various intervals, so there’s a real challenge with the fact you can’t rely on cookies any longer. There’s a lot of development taking place at the moment. Google has proposed using the Federated Learning of Cohorts (FLoC) method, where the browser does some of the work that previously cookies were doing – using active segmentation driven by machine learning. Then there’s data clean rooms, environments where you promise to analyse data in segments, but make sure you don’t link to any personal information. But there are various challenges: FLoC is being investigated by the Competition and Markets Authority in the UK, and it’s still unclear as to how data clean rooms will actually work. Overall, one thing we can guarantee is direct travel towards customer data being gathered and managed in a more controlled, responsible kind of way.
Q. What are the risks if businesses delay thinking about these challenges now?
A. The key point is there’s a lead time to understand what changes you need to make within your organisation and with your partners. Firstly, you need to understand how exposed you are – how Sponsored content > much of your ecosystem is actually using third party data? How much uses first party data? Depending on where you are on that spectrum, your actions will change in terms of mitigation. The most fundamental point is your data is inaccurate. Some of the metrics you might be using, like visitors, will be affected. The knock-on effect within your organisation will be data isn’t trusted, so one of the big challenges is if someone starts asking the question: is our data accurate? Is it reliable? You end up opening a can of worms, because if people don’t trust the data, they won’t use it, and when people stop using the data you’re no longer a data-driven organisation.
Q. What trends in your space are you excited about now?
A. I’m excited about Experience Platforms and Customer Data Platforms. With data lakes, part of the challenge has been getting your hands around the activation part of your data. You’re having to do the integrations yourself and lay things out, so there’s a lot of onus upon the organisation to make sure you can do it. The challenge was often that you can come up with these fantastic insights, and then it’s difficult to activate them. What’s exciting about CDPs is the ease with which you can link the insights to AI, to identify customer trends and insights and actually turn it into orchestrating the customer journey. I’m also excited by the more customer-focused business world – I think recognising that customers should own their data is going to change the industry for the better – there’s a real opportunity to show your ethical credentials, and to gain commercial advantage from that.
Q. As an Adobe Analytics specialist, could you talk us through how Station10 and Adobe can help businesses with their data challenges?
A. One of the things I think is important is around the risk of thinking technology is the whole answer, when it’s not. You need glue to bring together people, processes, and technology. How do you communicate with your different teams? How do you bring stakeholders together? How do you put the processes in place, and how do you build that customer experience? That’s where Station10 can come in: we are experts in understanding how you can analyse data and activate customers on the back of that and putting those processes and skills in place. So we translate the technology, if you like, into the language of business, to help non-technical people to understand exactly how to use things, and make the most out of that, out of the data and tools. We go through a process to evaluate what the requirements are and establish those according to what we call the value map – understanding exactly what the overall objectives are, how you then condense that to strategies and metrics, looking at building that out over the longer term. We’re only really interested in working on a longterm basis with clients, and so our aim is to become a trusted partner for the organisation to work with and to realise that long-term value.