First-Party Marketing is the Future

Google Marketing Livestream 2021 confirms what we knew to be true

When the recent announcements about third-party cookie and IDFA deprecation shook the entire advertising landscape, we couldn’t help but wonder: What is the solution?

Earlier today, members of Google’s executive team shared their thoughts in the 2021 Google Marketing Livestream, and we liked a lot of what we heard as it aligns with our “first-party marketing” vision. But at DELVE, we think brands can do even more beyond Google’s own platforms.

Increasing privacy demands by consumers are forcing many of the large AdTech giants to rethink their strategy. During the livestream, Google cited that 81% of people believe the risks of data collection outweigh the benefits. Specifically, people are increasingly concerned about how they’re being tracked across the Internet. This led to Google to announce in 2020 that they would phase out third-party cookies after 2022, while at the same time seeking to preserve advertising revenues.

Earlier this year, Google began to release multiple product updates (including Beta programs) to address consumer and regulatory concerns, while balancing the needs of advertisers in the post-COVID era. Updates include:

• An insights page in Google Ads that helps brands identify trends in their market and understand their performance 
• Curbside pickup for local inventory ads to better and more safely connect local shoppers to the products they need
• Booking for local services ads to connect customers with trustworthy professionals in their neighborhood, all backed by the Google Guarantee (think Angie’s List)

Google also highlighted the current beta program for Performance Max Campaigns, which is positioned as a new way for all advertisers to buy Google Ads from a single campaign across search, display, YouTube, Gmail, and Max to complement search campaigns and maximize performance. The Performance Max beta is being expanded to thousands of advertisers with a full launch later in 2021. Google noted that brands should see several benefits, such as:

• Finding more converting customers across all ad inventory without managing multiple campaigns
• Obtaining the best performance from Google against business goals
• Gaining richer insights into automation, and greater transparency into how campaigns are working 

Keys to Marketing Success Without Third-Party Cookies

We were very happy to hear Google implore brands to start planning now for a world without third-party cookies by refocusing their efforts on building deep customer relations and obtaining first-party consent to deliver more personalized experiences.

Google laid out three imperatives for marketing success after 2022 that require brands to begin taking action now:

1. Build great relationships with customers in today’s privacy-safe world—and that means the advertising industry needs to use consented, first-party data.
2. Use automation and machine learning automation to identify key patterns and trends whenever they’re available. This will enable privacy-safe ad selection and measurement where data or signals are limited.
3. Adopt privacy technologies to preserve and protect consumer privacy to ensure continued engagement. An example is Google’s Privacy Sandbox and its associated APIs.

At DELVE, we recommend that brands go even further by augmenting first-party data with second-party data (from Google, Facebook, or Amazon) that is deterministic and has a strong and well-defined intent signal. 

What about attempts by third parties to create identity resolution tools to replace third-party cookies? Google believes that these attempts will not meet consumer expectations for privacy or the test of regulatory scrutiny. We believe that some forms of identity resolution may prove valuable, but in the meantime brands should pursue parallel paths to future-proof their marketing. 

Even Google acknowledges that when consumers opt out of cookie tracking (via Consent Mode) it will leave gaps in attribution reporting, so they’re trying to fill the gaps with a new conversion modeling tool. Google claims these models will recover 70% of the conversion journey lost to user consent choices—which means that, at best, advertisers will lose 30% of their conversion path data points. This is why we recommend a combination of MTA, MMM, and incrementality testing to truly understand cause and effect of media on conversions.

Planning for First-Party Data Collection and Integration

So you now know you need to get serious about collecting and integrating first-party data. Where do you start?

To achieve a more complete view of how your ads are performing on Google media, including improving conversion modeling across devices, today Google suggested that brands consider the following:

• First-party data foundations begin with sitewide tagging so you have the data you need to deliver privacy-safe measurement.
• Proper tagging enables more data collection from conversions and deeper insights about what drove those conversions.
• Use enhanced conversions which work by allowing your tags to use consented, hashed, first-party data (like email addresses) from wherever your conversions are recorded. 

Google believes that first-party data is the key to future-proofing your audiences by using tools like Customer Match, and so do we—except we go further by applying advanced data analytics to identify lookalikes of your highest value, highest converting audiences, and then hyper-target them to improve media buying efficiency and return on ad spend (ROAS). We’ve done this successfully with multiple brands.

Full-funnel marketers know that first-party collection and integration is valuable beyond just improving media performance, since all brand communications and marketing campaigns should be informed (and personalized where possible) using first-party data. Why? Because increased personalization leads to higher conversion rates—and revenue. 

McKinsey offers some statistics that are worth noting when it comes to why data-informed personalization at scale is worth pursuing:

• Lift of 1-2% in total sales for grocery companies and an even higher lift for other retailers, typically by driving up loyalty and share-of-wallet among already-loyal customers (for whom data are more abundant and response rates are higher)
• Reduction of around 10-20% in marketing and sales costs

McKinsey also cites the value of improving customer experience through personalization:

• 20% higher customer satisfaction rates
• 10-15% boost in sales-conversion rates
• 20-30% increase in employee engagement

Think about it: customers want personalized experiences based on their past behaviors (first-party data), not somebody else’s (third-party data).

Collecting and integrating first-party data requires expertise in both technology infrastructure (tech stack) and workflow processes that adhere to privacy policies and regulatory requirements. The use of a cloud-based data lake and/or customer data platform (whether licensed or custom-built) can help unify data to enable the machine learning and automation that Google recommends and we have put into practice.

Machine Learning and Automated Insights

At DELVE, we believe the future of media optimization and personalization will require that brands view data science and analytics as essential core competencies for optimizing marketing and media as they allow brands to extract and apply unique insights that their competitors can’t easily replicate. 

During the livestream, Google also emphasized the importance (and power) of ML and automation to unlock insights and spot new opportunities. While Google’s new insights page within Google Ads makes it easier to spot trends, we help brands go beyond out-of-the-box insights tools that competitors can easily copy. ML and automation are critical core competencies because they scale your internal marketing and analytics team resources by using technology for first-mover advantage, instead of more labor.

The Bottom Line

Today’s announcements from Google, focusing on first-party data marketing, advertising automation and increased privacy controls, align with DELVE’s view on the evolution of digital marketing and advertising. Our focus on “first-party marketing” is a reflection of that alignment.

At DELVE we strongly believe that first-party data, consent-based personalized experiences, and data science can deliver huge gains in media efficiency, revenue scaling, and ROAS/ROI—and we’re helping brands fast-track that path forward.