How Marketers are Using 1st and 3rd Party Data to Optimize Performance
Data has become one of the most valuable marketing resources. With the right data, brands can gain insights into consumers’ wants, preferences, prospective purchases and loyalty triggers. With so much data at hand these days, there is no excuse to not be data-driven and to capture and analyze a range of data to pinpoint acquisition and retention strategies.
In a recent report by Invoca, marketers expressed confidence in their data sources, collecting insights across both online and offline channels. According to the research,
Marketers are very confident or confident in sources of data including:
- Purchase history (90%)
- Company websites (86%)
- Mobile apps (84%)
Marketers stated the following as a top 3 source of first party data to inform digital marketing:
- Company website (56%)
- Mobile app (42%)
- Purchase history (38%)
When considering offline data sources, marketers plan to invest more heavily into gathering and utilizing these sources such as in-store interactions and phone calls.
However, one issue marketers are dealing with is less access to offline data sources of data compared to online sources. For example, 73% of respondents say they have access to company website data, however, only 56% say they have access to data about customer interactions from phone calls.
By combining online and offline sources, brands are able to gain a holistic view of the entire customer journey. In the simple example below, Lily’s journey to purchase covers both offline and online interactions and insights, and when combined, they provide rich detail into future journeys or other likely journeys from similar prospects.
In Lily’s case, the brand also added third party data to the mix to better understand demographics and life events such as moving. Online data was captured about Lily’s search behaviors and offline data was captured when Lily visited the store to make a purchase. Each piece of data is invaluable when evaluating marketing efforts across all channels.
In addition to offline and online first party data, marketers should also be using third party data to fill in missing gaps, correct wrong information and add additional insights into lifestyles and behaviors.
Third party is external data available for purchase by data providers who source and aggregate the data into applicable sets that can be applied to your first party data bases. This data is integral to deploying targeted marketing campaigns, because they provide hundreds of data elements that no consumer would fill out in a single form. With only a few first party data elements, third party data sets can be appended to correct and fill in missing elements such as email addresses, phone numbers, lifestyles, demographics, purchase indicators and more to strengthen your customer insights.
When sourcing third party data assets from a vendor, it’s imperative to pay attention and ask the right questions about data quality, how is the data sourced, how often is it updated, does it adhere to privacy regulations and so on. While there are many high-quality data vendors offering legitimate, ethically sourced data assets, there are just as many who compile outdated lists, bad information and who are not compliant with privacy laws.
Challenges to Data-Driven Marketing: Using Data to Optimize Ad Performance
Having enough data to use isn’t a problem for marketers but making sense of the data they have at hand can be a challenge. Data quality and accuracy and privacy concerns were sited as some of the biggest hurdles to overcome.
Marketers understand the importance of using data to optimize their marketing efforts, but they need access to the right marketing tools to integrate, clean and analyze data in order to apply it at scale. In addition to having the right tools, there is often a data skills gap. According to Invoca’s research, 73% of marketers say they’re confident in their ability to apply data when personalizing campaigns, only 67% say they’re confident analyzing data. One in four would like to have more skills to analyze data (26%).
One area marketers should be focusing on is using AI to make better informed, data-driven decisions. However, only about half of marketers are putting AI to use.
Many marketers understand the importance of being data-driven, however there are still gaps when it comes to successful execution. A study by Forbes showed that 64% of executives “strongly agree” that data-driven marketing provides a competitive edge in deciding on how to compete with other companies in the same field.
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