Unless you happen to have the scale of a company like Amazon, first-party data is not enough to power audience buying at scale. Third-party data is required to capture a broader array of high value signals and generate scale throughout audience buying efforts. While this is not a new concept for marketers, most have not yet put in place systematic programs to fully harness the combination of third-party and first-party data.
Following are three strategies that will help you to expand on the proven success of retargeting and to create another acquisition channel based on third-party data that is equally distinguished by extraordinary returns.
Strategy 1: Call in the Experts
The proliferation of online data presents marketers with a bewildering array of options. Out of the thousands of segments available only a few dozen are appropriate for a given brand, so you literally need to find a needle in a haystack. To address this challenge, you need to create a data strategy tailored to your business. Marketers should engage proactively with data experts to select the right data sources, attributes and establish bespoke data sourcing relationships that drive competitive advantage. All of your competitors are investing heavily in standard segments available in programmatic platforms. You can drive revenue by identifying, new high-value market segments that your competitors missed.
Strategy 2: Always Build Models
Valuable audiences tend to be small – only so many consumers engage with your digital properties or leave traces of purchase intent across third-party data. Because there’s no such thing as enough of a good thing, you should always create and scale your high value data through lookalike models. This broad application of modeling is now possible because of advances in modeling technology. In selecting your modeling solution, look for a partner with a data set that includes both online and offline data specific to your vertical. Your modeling solution should also use signal-level data – i.e., data that’s more granular than standard segments – to maximize model performance. Robust modeling will help you to scale ROI across scarce, high-value audiences.
Strategy 3: Don’t Pay a CPM
While the CPM model may easily fit into a media plan, it also precludes broad and effective application of third-party data. Think back to the days when phone companies applied a per-minute charge for calls. Knowledge that every second cost money constrained phone use. That’s why phone companies have transitioned to fixed-price bundles that increasingly allow for unlimited calls. CPM pricing for data constrains the behavior of the media planner the same way that per-minute phone charges constrain the behavior of the consumer. The end result limits tactical application of third-party data and forgoes the opportunity to capture ROI. To overcome this limitation, marketers should engage with their data partners and establish subscription deals for data that’s of interest to them. This pricing model unlocks tremendous value that currently goes unrealized.
Data is at the core of any strong marketing program. These three strategies can serve as your guide to deeper engagement within the data ecosystem. Unlocking the full value of third-party data will provide you with another vehicle to drive ROI and do so at scale.