Data is the backbone of modern-day marketing. It provides businesses with invaluable insights into customer behavior, preferences, and demographics. However, with the growing concern for consumer privacy and the deprecation of third-party cookies, executing first-party data strategies that balance a value exchange with privacy is becoming more and more challenging. In this article, we take an in-depth look at Gartner’s latest CMO research, which provides valuable insights into the difficulties marketers face while executing first-party data strategies in 2021.
Difficulty in Executing First-Party Data Strategies Due to Privacy Concerns
According to a report by Gartner, 60% of surveyed marketers believe that executing first-party data strategies that balance a value exchange with privacy will be more difficult this year. One of the primary reasons for this is the deprecation of third-party cookies. With the disappearance of data sources, many marketers are scrambling to shore up their first-party data strategy. The report states that it is essential to strike a balance between obtaining valuable customer insights while maintaining their privacy.
Trust and privacy concerns are leading to cutting ties with agency partners. The importance of trust and privacy in marketing cannot be overstated. Nearly one-third of respondents to Gartner’s survey stated that they had cut ties with an agency or channel partner over the past year due to trust- or privacy-related concerns. This indicates that businesses are taking a greater interest in safeguarding customer data and are willing to sever ties with partners who do not prioritize this aspect.
The problem with focusing on a smaller number of channels
Conventional marketing wisdom suggests that focusing on a smaller number of channels makes it easier to pivot to first-party data. However, the report argues against this belief. According to Gartner, marketers should diversify their media mix to strengthen their data acquisition efforts. This is because first-party data strategies encompass several data channels that may not necessarily have the same level of data quality. Therefore, diversifying media mixes could provide additional customer insights across various data channels, ultimately leading to a more comprehensive data strategy.
Gartner’s latest CMO research draws on surveys of nearly 400 marketing professionals conducted in November and December of last year. The report provides essential insights into the current state of marketing and highlights the uphill battle that businesses face when implementing first-party data strategies.
Lack of Prioritization for First-Party Data
Only 36% of those surveyed by Gartner strongly agreed that they are prioritizing first-party data to create more immediate customer value. This indicates that while first-party data is becoming increasingly essential, businesses have yet to fully appreciate its full potential.
Progress in Personalization
Despite the challenges in implementing first-party data strategies, there are signs of progress. According to Gartner, 42% of respondents stated that they are now able to execute one-to-one personalization. This is an indication that businesses are mindful of the critical role that personalization plays in building long-term relationships with customers.
Formalizing Customer Data Management Policies
According to Gartner’s report, more businesses are placing greater importance on customer data management policies. This involves severing ties with marketing services providers that fail to meet their trust and safety standards. Formalizing customer data management policies is a crucial step towards creating a more transparent and secure environment for data.
Diversifying Media Mixes for Stronger Data Acquisition Efforts
Gartner suggests that diversifying media mixes could strengthen data acquisition efforts, going against conventional marketing wisdom. By leveraging a wider range of data channels, businesses can attain more accurate and actionable customer insights. Therefore, businesses should not limit their data acquisition to a few channels.
Most Valued Data Categories
The report highlights that behavioral data, interest intent, and demographic information remain the most valued data categories across all industries. This indicates that businesses must prioritize data points that provide the most significant insights into customer behavior and preferences.
In conclusion, executing first-party data strategies that balance a value exchange with privacy is becoming increasingly challenging. The deprecation of third-party cookies has caused sources of data to disappear, leading businesses to scramble to shore up their first-party data strategy. However, by diversifying their media mix, formalizing customer data management policies, and prioritizing the most valued data categories, businesses can attain more accurate and actionable customer insights. Ultimately, this can lead to better customer relationships, increased revenue, and sustainable growth.