The value and power of data cannot be disputed. To better compare first and third-party intent data, we spoke to a handful of figures from across the performance marketing industry to get their views.
We caught up with US-based chief revenue officer at advertising tech company Triggit; Chris Zaharias, the UK MD of French-founded performance display firm Criteo; Jon Buss, global client services director at tag management and marketing data platform TagMan; Sandra McDill, and partnerships manager at data-driven online solutions company, Ve Interactive; Patrick McGill.
McGill said Ve Interactive uses first-party client data to remarket to customers on behalf of its clients, which ensures the communication is ‘completely relevant’ to the customer.
He said first-party data is exclusively used to fulfill remarketing through Ve Interactive as its clients want to ensure that customers who receive a remarketing email have shown prior interest in the brand/product, and made a ‘positive step toward sharing their email address’. Thus meaning that customers contacted through Ve’s email remarketing service have already engaged with the merchant, which results in a higher conversion rate with lower acquisition costs.
Regarding third-party intent data, McGill said it is important to ask a number of questions, such as ‘how does the demographic fit your campaign?’, ‘has it been obtained legitimately?’, ‘how often was the data compiled?’ and ‘how often is it used?’
“Such questions ensure you maintain your integrity as a trusted online seller,” McGill said.
In the context of email remarketing, he said the use of third-party data (contact data purchased from outside your business) completely removes the right of every customer to anonymity and is likely to be ‘destructive’ to the relationship between the potential customer and the merchant.
While the main benefit is that third-party data allows businesses to accelerate some of their marketing activities, he said on the other hand, the data is compiled in an environment or website in which customers are completely disconnected from the brand, products and services.
“It is widely understood that customers are happier to receive an email from a brand they have visited, rather than companies they have never engaged with as it leads you to ask where they got your email address from,” he added.
“So while third-party may seem like a quick way to reach out to your market, first-party data drives better results because the customer is already engaged and you can guarantee that your brand is relevant to them.”
CRO Zaharias, of Triggit, agrees with McGill and said the huge growth of retargeting, making it a multimillion dollar industry, is proof that first-party data works extremely well.
On the subject of third-party data, Zaharias said it has been a disappointment to every direct response advertiser they have talked to on the subject.
Not Living up to the Hype
“For its part, Triggit has in virtually every instance been disappointed with third-party data ROI,” Zaharias said. "Across a number of tests we ran on FBX recently, third-party data yielded less than 1/5th the CTR, at six times higher eCPC and for client ROAS - in each case so low as to result in immediate shut-down of the campaign. We're still looking for workable third-party data, but no pot of gold yet.”
As for using past advertisers' intent data to help new clients out, rather than using that new client's own data, this has caused some fairly heated industry discussion.
“When advertisers sign up with a retargeting provider, they assume their first-party data will be used on their behalf and no one else's,” Zaharias begins.
“I wouldn't say misuse of advertiser data has reached controversy level, though, as few are aware, firms as big as Criteo and Google systematically re-use intent data.
“Once advertisers do become more aware, I expect many advertisers will overtly assert ownership of their data, while others will look the other way as long as their primary volume and ROI objectives are met.”
Naturally, Zaharias said when consumers see fewer ads, but more relevant ones, that reignites conversion desire and then results in transactions - which is good for the consumer, the advertiser and the publisher.
“At $5 billion plus in annual spend and growing fast, retargeting is helping make commerce more efficient at a scale reserved for only the most universally proven and accepted forms of marketing,” he said. “Third-party data hasn't lived up to the hype, other than as a targeting vector that helps rationalise ad spend when spend itself is the intermediary's goal.”
Another topic for debate is how clued up businesses and consumers are about the current levels of tracking in relation to first and third-party intent data. Zaharias said when Google stopped sharing keyword referral data for organic search back in September, globally, this ‘blinded an entire planet's websites’ to the specific intent of inbound search traffic.
“An approximate physical world analogy would be the postal system removing return addresses from postage,” Zaharias said.
“Less than several tens of thousands of people worldwide even know this has occurred, yet it affects billions of people. Mind-boggling.”
Criteo MD, Buss, said he feels first-party data should always be the starting point for marketers as it enables an advertiser to use their own customers’ attributes to offer a better shopping experience.
He said third-party data should only be used to enrich a company’s own customer data by building ‘additional layers of insight’.
“That said, when it comes to third-party data, it should be about quality rather than quantity. Advertisers need to be aware of the data provenance and understand that factors such as time decay and accuracy can influence the effectiveness of third-party data,” Buss said.
“The issue so far has been scalability. With so much third-party data readily available, the easy option is to use it on a best match basis. Constraints on accessing first-party data such as getting internal systems to talk to each other in order to unlock and unify first-party data, has also prevented greater usage.”
Reusing Data for Competitors
He said at Criteo, they have never used an advertiser’s user-level data for the benefit of a competitor.
“The issue here is about transparency and control. Advertisers, and in turn users, should be aware of where and for what their data is being used. As the media landscape becomes ever more fragmented and competitive, data is one of the most powerful tools marketers have” Buss added.
Buss stressed that while the web has made data capture and data usage for the purpose of advertising that much easier, the increased benefits have meant increased responsibility.
He said: “When used responsibly, we know that data enriches the customer experience. At Criteo we see response rates increase when the ads are targeted and personalised.”
When asked if there was true value beyond the buzzword of ‘big data’, Buss said big data is only useful if you are able to act on it.
“Advertisers shouldn’t simply add more data because they have it – they need to assess what the benefit of the data might be before using it. Criteo commissioned Forrester last year to evaluate the impact of data on the online display ecosystem, which concluded that with an explosion of data comes an opportunity for advertising in general and display in particular,” Buss said.
Ex-Tradedoubler employee and current global client services director at Tagman, McDill, said while ‘big data’ is often incorrectly used as a buzzword and is in danger of becoming just marketing hype, it is clear that data used correctly can be a ‘game changer’ for clients.
“Data is big, often unstructured and difficult for organisations to manage, but once that has been overcome, unified data can turn to actionable insights that can enable advertisers to increase customer experience and engagement, increase revenues and create marketing efficiencies,” she said.
When asked if first and third-party intent data models really empower and help the customer, McDill said there are many examples where first and third-party intent data have enriched customer experiences, yet there are many stories where that has not been the case.
“‘Wrong’ intent data is still an issue, particularly in sectors such as fashion, where tastes change rapidly, so until this is overcome, there will still be some pushback from consumers,” McDill added.
She also said it was a concern that many brands are still not aware of the tracking on their own site, let alone the data that is being used to drive their marketing activity or that of their competitors.
She also stressed that data leakage is increasingly common which not only impacts the brands, but also the customers they represent.
“Consumer awareness is growing amongst those users with a better understanding of privacy online and for whom sharing data has become a trade-off they can actively participate in.”
Damaging Wrong Data
Touching on Zaharias’ concerns about misuse of advertiser data, McDill said one of the biggest mistakes an advertiser can make is to assume that what has worked for someone else, will work for them – which is especially true if the information is old.
“We live in a world where information changes at such a rapid pace (the new tweets per second record is set at over 143,000), so it would be more advantageous to use a small amount of relevant recent first-party data than rely on something inaccurate,” she begins.
“That said, there is a lot to be learnt from looking at previously successful models and trends if used appropriately.”
She also agreed that first-party data can be incredibly valuable if collected, organised and analysed in the right way.
“By unifying all first-party data, brands can have a holistic view that will enable them to gain smart insights about their marketing. The addition of third-party data is exciting for many brands that can combine their own information with intent data from other sources,” she said.
“The con for many clients is how to ensure that intent data is recent and reliable as using the wrong data can be more damaging than using none at all.”
Transparency is Key
IAB UK’s marketing and communications director, Kristin Brewe, said it consistently advises businesses on transparency and notification – clearly letting everyone know what they are doing and how their data is used.
“A cornerstone of ethics is transparent, open communication to anyone and everyone you do business with. We have a lot of policy insight as well, in terms of what’s both ethical and required,” Brewe said.
“We’re big believers that more information helps people make better decisions. Consumers want a more relevant, contextual internet – they expect the technology to deliver that. It’s up to us as a digital industry to work together to deliver those experiences to them transparently.”