“Think like a media business”
While the industry is still anticipating the demise of the third-party cookie, we see and hear more and more people and organizations discussing first-party data as an integral part of the marketing strategies of today and tomorrow. But that’s easier said than done. Many organizations are still figuring out how to collect it, how to be privacy-first, and how to safely use it.
In the latest episode of our Identity Architects podcast, we’re heading Down under as InfoSum's General Manager ANZ, Richard Knott, sat down with Troy Townsend, Co-Founder and CEO at Zitcha, to discuss first-party data, retail media, data clean rooms, and more.
“I think a lot of brands are not doing a great job when it comes to collecting first-party data. Not only do I think that there's a long way to go in this space, but I think they're not really clear on how to do it. If I look at a brand that I think is doing a world-class job in collecting data it’s Red Bull. Just in how strong they are around their depth of content, the ability for them to really create a brand that people want to give their data to. And they're creating value in the space [...] they're a typical consumer brand, but they've done an amazing job of being able to connect the dots of what their customers want and what they like to see, how they like to interact outside of just the purchase journey.”
We couldn’t agree more, there’s a lot to consider when creating a first-party data strategy. In fact our VP, Corporate Marketing, Ben Cicchetti recently shared his thoughts on the blurring line between brand and media owner with Performance Marketing World.
“When I look at the plethora of brands that we work with, a lot of them are really trying to set the structure of what they do and how they do it. Number one is how are they actually collecting data [...], what are the critical steps of them actually being able to collect data on their side.
How are they adding value to that customer journey by being able to collect that data on their side. From that perspective, there's some really critical points around the things that they need to do. Content is for me a big one. Brands that can create really enticing and engaging content is a massive driver of value back to their own customers. Number two is, some brands get really focused on the collection piece but they actually don't know how to use that data properly and when you get into that depth of the value of that data and being able to use that for action and that action then drives incremental revenue I think is is the critical thing for brands to be focused.”
Absolutely. So much focus is on how to collect that data and also figuring out how to do it in a privacy-safe manner that people tend to forget they need to think even further and figure out how to use that data efficiently and effectively. How do you maintain that privacy, security, and consent but still have the utility? That's obviously a big challenge for people to get that balance.
“There's quite a lot of understanding that a marketer needs to have in order to comply with the privacy standards, to comply with all the structure of what's the stack that I need to use in order to be able to get that data and how do I make sure that data is compliant with everything that I do. It's a bit of a learning curve for a lot of marketers. Especially as the space is so dynamic as well. It's changing so much. [...] It’s having to learn the rules as the game goes on.”
In the past marketers usually had a single focus, getting the right message in front of the right people at the right time. Today they need a holistic understanding of technology, legal and privacy regulations. It's definitely a role that's getting broader. Especially in a fast-moving industry such as martech where new technologies are being developed and launched at a rapid pace.
“Clean rooms are such an amazing opportunity for brands to be able to add value on top of the data set that they're collecting from a retailer's perspective and I think we're starting to see this growth where a retailer not only wants to help a brand connect across the retailer's assets but also how does the data that the retailer has helped the brand connect across their assets. We're going to start to see a massive growth trajectory in. being able to run across a retailer but also run across the brand. So I think the use of clean rooms [...] to be honest I think it adds value on both sides.”
The collaboration is the key piece because that's where the real value is unlocked, and that's what data clean rooms enable. Not just the use of first-party data but second-party data as well. Where you can collaborate with like-minded businesses to understand more about the consumer journey, there's huge value to be unlocked - especially in the retail media space.
“I think we're going to start to see that connection get a hell of a lot deeper over the coming years where retailers are really getting specific on the golden goose that they're sitting on which is their data asset and how they can utilize that. And then obviously on the flip side for brands to be able to use that but also to your point around first- and second-party to be able to then get their data asset looking as strong as possible on their side as well. The value creation on both sides will drive much more granular targeting and much more granular expectations around how they can segment and get the value for each part of their audiences on each side.”
It’s great to see the retail media hype becoming a reality with all the potential and opportunities to explore. Not just seeing two organizations working together but truly seeing that network effect.
“As that size of networks grows you're going to start to see that aggregation will start to play a role in the space. As you start to see that aggregation start to hit where brands are going, I don't want to just buy through a single retailer I want to buy across all the retailers that I have, I think that's the point where we know that retail media has passed the inflection point it is in now into mainstream.”
So how do we get from where we are now to that point?
“Number one is understanding the opportunity. What have you got to sell as a retailer? [...] What's the change management, which is the second piece of the puzzle. [...] Then it's how am I going to move to be able to do that. What are the things internally that I need to do in order to realize that now typically that's a people that's a people internal people structure? So do I want to have a media division, does it sit within my merge teams, who owns it within the org? And then what's the stack that I need to deliver that? What are the things that I need in order to be able to make that a reality? [...] The third bucket is the stack and what you do. And then probably the last piece is the sales piece, who's going to sell it?”
And what does that look like?
“You're starting to see a lot of large retailers create their own media divisions that have their own sales teams or they're implementing sales teams from external vendors. That's another big critical piece to the success. It’s making sure that you think like a media business because you're becoming one. So the media sales component is another piece that you need to tick off with.”
So much is changing - the role of brands and retailers, as well as the role of the marketing function.
“It's going to be really exciting to see your traditional media platforms come into this space and help retailers and help brands really utilize the amount of data that's sitting on their site to be able to maximize the size and the opportunity that these retailers are sitting on top of.”
Thanks, Troy, for the chat!