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Digital Opinion South Africa

Retail marketing: The demise of the third-party cookie, the rise of first-party data

When it comes to the retail sector, first-party data stands as a cornerstone of understanding customer behaviours, preferences, and patterns.
Source: © 123rf  First-party data stands as a cornerstone of understanding customer behaviours, preferences, and patterns says Gil Sperling and Dan Levy of Flow
Source: © 123rf 123rf First-party data stands as a cornerstone of understanding customer behaviours, preferences, and patterns says Gil Sperling and Dan Levy of Flow

Unlike third-party data, which can often be less reliable and less directly relevant, first-party data is collected directly from customers and it holds immense value for retailers as it offers authentic insights into customer demographics, purchase history, browsing behaviour, and engagement levels.

Demise of the third-party cookie

First-party data is one of the most significant trends emerging and it's driving both a shift in marketing spend as well as innovation in the sector.

Under the spotlight because of regulatory changes, data sourcing, usage and protection are becoming increasingly important.

Alongside the demise of the third-party cookie, Artificial intelligence (AI), machine learning, and the rise of data have also reimagined contextual messaging, creativity, and campaigns at scale.

Volume increase

Over the past year, the deal volume among adtech and martech companies saw an increase of 82% year-on-year despite concerns that the sector wouldn’t cope with the changes in third-party cookies and the introduction of privacy-focused targeting solutions.

This is largely due to the industry’s ability to embrace emergent technologies as well as its access to and understanding of data, says Gil Sperling, co-founder and CEO of data-driven adtech company, Flow.

Powerful opportunity to thrive

However, for companies embracing this change, there is also a powerful opportunity to thrive.

Companies with a first-party data strategy can also easily embed data privacy into their approaches and strategies to ensure sustainability and translate complexity into innovation.

“It’s an exciting time because of this massive paradigm shift,” continues Sperling. “We’re living on the edge of change and it’s healthy.

“Truly innovative companies aren’t stagnant, and those that are not stagnant, are creating a new narrative.

“If companies respect this change and interrogate how they can work with the data – especially with regards to keeping it clean, private and secure – then the future is better for everyone.”

It is, he says, the maturation of adtech, particularly in light of the demise of third-party cookies and the irresponsible collection of data.

Consumer consent and privacy have become extremely important in the Information Era and adtech companies need tailored, contextual audiences, enhanced first-party data collection, and finding novel ways of using these touchpoints to discover new ways of connecting with markets and customers.

Aligned with the shift in retail spend

Dan Levy, co-founder and CEO of Flow says the trend towards a cleaner internet, and cleaner sourcing of data, is aligned with the shift in retail spend.

“Retail media is a great example of how first party data can be used and is, to use a great analogy, eating into Meta’s lunch in 2024,” he continues.

“Budgets are moving away from Meta towards companies that have access to large quantities of first-party data, such as retailers.

Media can be bought from anyone

“What’s also important to note is agencies and other media buyers aren’t under threat, as evidenced by the growth statistics, they’re still purchasing media, but the publishers have changed.

“Media can now be bought from anyone with first-party data, it could now be from an insurer, from a retail giant – the market is open.”

This trend is reflected in the automotive and property industries that have access to vast quantities of user data across key metrics such as user behaviours and preferences.

Highly targeted advertising options

This data offers highly targeted advertising options to real estate agents, developers, vehicle manufacturers and retailers within the motoring sector - all of which can be used to enhance decision-making and planning.

Using AI for targeting isn’t new

Of course, the data trend doesn’t stand in isolation.

Artificial intelligence (AI) and machine learning are the gold standard in trends redefining the scale and scope of adtech today and in the future.

AI, particularly generative AI (GenAI) has seeped into every industry and the change its introducing is as significant as the mobile phone – the ways in which adtech and marketing organisations leverage data and technology is about to fundamentally change, if it hasn’t already.

“As much as AI and machine learning are massive trends, these technologies have been at the core of Facebook targeting, and Google data analysis and learning for years,” Sperling explains.

“These companies already have more data than anyone and can train their models better than most other companies can. Using AI for targeting isn’t new.

GenAI is new

“What is new is GenAI and how this is used within your organisation to create content that’s personalised at scale.

“ This technology is not only transforming how ads are created and served, but also making them more effective by tailoring them to specific audiences.”

However, as Levy points out, the technology is only as good as the foundation it’s built on.

“It’s the blend of skills, expertise, and technology that is creating the next generation of adtech,” concludes Sperling. “This is the best way to stay ahead of, and benefit from, the changing shape of the industry.”

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