It’s true that first-party data is the foundation of customer relationships. It can provide rich, relevant and cost-effective insights into consumers — and, as such, it’s just what is needed to create highly effective, personalised ads. So why are many marketers struggling to make healthy returns on it?

It all boils down to data activation – the process of unlocking value in data through developing and acting upon insights that you uncover. It means putting the data stored in a data management platform – or DMP – into action.

As such, here we outline the five key challenges marketers are facing when it comes to data activation and, of course, how to overcome them.

Challenge 1: [In]accuracy

Today, brands collect enormous amounts of information about consumers, from what they like to buy to where they like to buy it. But too often, these insights are incomplete or inaccurate. The consequences of this can hurt a brand’s image and empty its pockets. 

To help overcome this challenge, brands must cross-reference first-party data with other (verified) data sources to create a more complete and up-to-date view. In this way, effective data activation requires building connections within your systems. By combining online and offline first-party information with other pieces of data such as browser history, location, device type and transactional data, it is certainly not mission impossible for advertisers to display a personalised ad to the right person at the right time.

Challenge 2: Regulation

The General Data Protection Regulation (GDPR) comes into effect next year and is calling for companies to change how they gather and use data. These new laws won’t just impact European businesses. Any brand that operates in the EU or uses EU data will need to comply. This poses new challenges for marketers and will force companies across the globe to transform how they collect and utilise first-party data.

As such, advertisers will have to do more than just hire a data privacy expert. Brands will need to shift their corporate cultures, putting respect for consumers’ privacy at the heart of the business, if they don’t already. Don’t forget that this is the foundation of building respectful and personalised relationships with consumers. Remember: data-activated, one-to-one marketing is not only expected by today’s customers, it is also the key to transforming transactions into enduring relationships.

Challenge 3: Scale

While some lucky companies have access to huge amounts of consumer data, most can collect only modest amounts, making it difficult for them to scale up marketing efforts. Brands can get around this limitation with the help of lookalike modelling, which means using the data they have, to identify and target similar-looking audiences.

Bear in mind, however, that it is no longer sufficient to think only in terms of, ‘People who bought this, also bought that.’ Data-activated marketing is based on a person’s myriad real-time needs, interests, and behaviours and in most business cases, it cannot be done without the help of technology.

Challenge 4: Multi-touchpoint customer journeys

As we all know, consumers move rapidly across devices these days. Yet the set-up of many advertiser’s tech stacks today still leads to delays in building a holistic view of their activity. Fortunately, cross-device data activation solutions do exist and they can provide advertisers with real-time insight. To this end, data silos must be avoided to ensure these can have the greatest impact.

Challenge 5: Interoperability 

As mentioned above, brands need to transfer first-party data quickly and easily across a plethora of marketing and analytics platforms, including walled gardens, which are closed software systems controlled entirely by the service provider, such as Facebook. This can be a struggle and often leads to a playoff between accuracy and scale. To help with this, advertisers need to find a data activation solution that can provide strong matching abilities and an unbiased approach.

Despite these challenges, data activation and personalisation is the lifeblood of modern marketing and technology has advanced to the point where marketers can use real-time data in a way that is meaningful to customers and profitable for companies. 

Marketers that leverage sophisticated data management technologies will be the first to boost returns on their first-party data. Activation is a crucial layer of modern, data-driven marketing and, while a DMP can help you manage your data, brands must not stop there. They should be looking for a data activation platform that addresses the above key challenges. 

Data is like fuel in a car and data activation is the ignition. Until you start the engine, the car doesn’t do much. While a DMP is great for collecting data from various sources and creating audiences, this is where its true potential lies. While there are challenges along the way, businesses can unlock a wealth of new insights and potential revenue streams by following the right strategy for data activation.