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Chapter I: The Beginner's Guide to First-Party Data in Programmatic Advertising
As we move towards a privacy-first world, first-party data is set to become one of your most valuable assets. Whether you’re a publisher or an advertiser, here are the fundamentals of collecting – and activating – your first-party data in programmatic.
If you’re like most companies in today's digital world, you’re probably already collecting significant amounts of data from your customers or audience. But, if you’re not leveraging that first-party data to drive better outcomes – like improved ROAS, more conversions, or simply higher yield – you’re essentially leaving money on the table.
Let’s find out why there’s never been a better time to take control of your first-party data.
Table of contents
- What is first-party data?
- First-party data for advertisers
- First-party data for publishers
- First-party data in the cookieless world
- Looking to tap into the power of your first-party data?
What is first-party data?
Before we get into the specifics of how first-party data can be used in the context of programmatic advertising, let’s start with the basics: what is first-party data?
In a nutshell, first-party data is any information that you collect from either your customers, website visitors, or your audience. You have unique relationships with your users, and you can tap into these relationships to amplify and optimise your programmatic campaigns.
First-party data means something slightly different depending on whether you sit on the buy side or the sell side of the programmatic ecosystem:
- Advertiser first-party data could be information from your CRM system, website analytics, past purchases, and more. It can be activated within a DSP or a Media Curation Platform in order to target specific users and drive better campaign outcomes.
- Publisher first-party data generally refers to your visitors’ website activity, but can also include subscription data, social media activity, offline data (like print subscriptions or event attendees) and more. Publishers can leverage this data to segment audiences to satisfy specific advertiser campaign objectives and maximise yield.
So, no matter where you’re positioned, your first-party data is a huge asset that you should not ignore. Even better, it’s technically free.
For advertisers, it can help laser-focus your campaigns on a desirable audience to boost performance and improve ROI. For publishers, it can help you engage more directly with agencies and advertisers, giving them instant access to relevant, engaged audiences – and increasing the value of your inventory .
Naturally, all this talk of data raises the important question of privacy, consent, and identity.
With the advent of GDPR and CCPA regulations, users must now expressly give consent for their first-party data to be collected – and for how it’s used. For example, users might give their consent to have their activity tracked by an analytics system, but not for advertising purposes.
While it can be a complicated process, if you’re able to collect consent for the type of activity you’d like to carry out with your first-party data – programmatic retargeting, for example – it can become an incredibly valuable resource over time.
And when it comes to the cookieless world, you’ll probably wish you’d deployed your first-party strategy years ago.
But first things first.
First-party data for advertisers
We’ll be taking a deep dive into first-party data for advertisers in a later chapter of the playbook, so let’s first set the scene with an overview.
Whether you’re a direct advertiser or an agency working with multiple brands, there’s plenty of opportunity to collect and leverage first-party data. The most common sources of first-party data are:
- CRM systems (online and offline)
- Survey responses
- Newsletter or subscription sign-ups
- Website analytics and purchase history
As an advertiser, one of your biggest assets is the ability to create audience segments which can then be applied within your DSP or curation platform. Through the use of user syncing, also known as cookie matching, you’re able to target users on a 1:1 basis wherever they may be on the open web. This works by matching first-party data to third-party cookies. However, though, with the imminent shift to a cookieless future, the days of using this strategy are numbered – as we’ll discuss shortly.
Even if your first-party data is scattered across various databases, you can use services like LiveRamp to carry out data onboarding and make it available for audience segmentation and targeting via your DSP or curation platform. In fact, even offline data – such as names and postal addresses – can be onboarded, taking that real-world data and converting it into a cookie which you can then target via digital channels.
The final thing to note on the demand side is that, while first-party data is primarily a tool for retargeting an existing audience, it can also be used to carry out lookalike modelling, which involves taking an existing audience and matching their characteristics (location, browsing history, device type) against unknown users with similar attributes. In this way, first-party data can effectively amplify your prospecting results, too.
First-party data for publishers
Now that you’re familiar with the buy-side of first-party data, let’s consider publishers on the sell-side.
Again, we’ll be going much more in-depth on how publishers can leverage first-party data in a later chapter of this playbook, so for now, let’s look at the key points.
The true value of first-party data on the publisher side is that nobody knows your audience better than you.
The context of your niche or vertical gives insight into the likes (and potentially dislikes) of your users. Not only that, but you can use site behaviour and web analytics to further refine audiences towards specific subtopics. Have a specific set of users who visit your site every day for the latest golf news? There are plenty of sports equipment and sportswear advertisers who’d love to tap into such a specific audience.
So how do you unlock the power of this first-party data programmatically as a publisher?
Here are the headlines:
- Private Marketplaces (PMPs) are invite-only marketplaces that combine the efficiency of programmatic with the exclusivity of direct deals. Publishers can make their inventory available directly to select buyers, giving them first-refusal on premium inventory types, guaranteeing viewability levels, and/or overlaying their first-party audience segments.
- Curated Marketplaces are a way for publishers to offer blended audiences to their buyers at scale. Curated marketplaces are made up of various targeting criteria, including one or more PMPs, contextual signals, and even specific universal IDs (for the cookieless world). These blended audiences help buyers target niche segments at scale and give them much more control over their supply strategy.
- Programmatic Guaranteed is a lot like traditional direct deals with advertisers, giving you the chance to negotiate a specific price for a specific audience / inventory combination. Once again, it’s your knowledge of your audience – informed from first-party data – that makes this an appealing prospect to media buyers.
- Audience Extension is a boon for publishers and advertisers alike. It allows publishers to leverage advanced machine learning algorithms to create audiences based on their first-party data. They can then make these available to demand-side partners across the web, amplifying reach for buyers and opening the door to increased yield for themselves.
First-party data in the cookieless world
If you’re even tangentially connected to the ad tech world, you’ll already know that the days of the third-party cookie are numbered.
In addition to privacy-focused regulatory changes such as GDPR and CCPA, industry behemoth Google is also taking steps to boost user privacy across the web. With its Privacy Sandbox initiative and the deprecation of third-party cookies from the Chrome browser, 2023 is set to be the year when the privacy-first future really starts to kick in.
While the adtech world scrambles to develop solutions to resolve identity targeting, a first-party data strategy will remain a privacy-compliant option for the rest of the open web.
Outside of the walled gardens, advertisers and publishers on the open web will still have options for 1:1 targeting, provided they have first-party data, like user email addresses, to bring to bear. That’s why it’s so essential to develop and execute on a first-party data strategy now in preparation for the coming paradigm shift.
Where there’s consent, there’s a way.
Looking to tap into the power of your first-party data?
The next chapter of our First-Party Data Programmatic Playbook will be available soon and we’ll link it right here.
In the meantime, if you’d like to explore the true value of your first-party data with a member of the IPONWEB team, we’re here to help.
Just click the button below to get in touch today and discover exactly what your first-party data might be worth.