First-party data: A strategic asset that powers business growth
In a tight economy beset with load shedding and still recovering from the pandemic, companies need to push every lever at their disposal to grow revenues, profits and market share. CEOs are looking towards marketing directors to help deliver their growth agendas. Yet at a time when budgets are under pressure, marketing teams need to be both efficient and effective in acquiring and retaining customers.
This is nothing new—marketing and advertising budgets have been under scrutiny for years. Many marketers have responded by turning to digital as a cost-effective, measurable and accountable way to reach customers. According to Statista, total South African digital advertising spend is projected to reachUS$510.90m this year (a growth of 9.6%). It is also forecasted that 88% of digital advertising revenue will be generated through programmatic advertising in 2027.
A changing data privacy landscape means that marketers will need to rethink how they use digital channels to drive growth. Regulators and legislators worldwide are taking a tougher stance on data privacy, while bigtech companies have introduced or plan to implement new restrictions on how advertisers can use third-party cookies and mobile identifiers to deliver and track ads.
This shift in the market means that it is becoming increasingly difficult for companies to leverage third-party cookies to identify potential audiences and target them with personalised messaging. Organisations are scrambling to sharpen their data analytics capabilities and their ability to gather, collate and leverage first-party customer data at scale.
Marketing gets a seat at the data strategy table
Leading companies are thus changing how they think about and value their data. No longer is data an IT storage problem. It is instead a company asset to be commercialised. The marketing function now has a seat at the table where data strategy is set and is treated as a vital stakeholder in organisations that have grasped just how important first-party data is to their growth agenda.
As companies set their data strategy, one of the first steps is defining the critical use cases. Few use cases are more important these days than understanding the customer. Marketing leaders are working closely with IT to create data strategies that enable them to glean better customer insights and develop targeted campaigns using those insights.
Artificial intelligence (AI) is playing a rapidly expanding role in enabling marketing to get deeper insights into customers’ needs and behaviours and predict the customer’s future buying patterns. The better marketing teams get at using data to fully understand the customer, the more customer engagement avenues and revenue opportunities open up for the business.
The key to success is identifying triggers based on customer behaviour to predict their buying patterns before they start looking. For example, when someone applies for vehicle finance, that is the ideal time to target them with an insurance ad. They will not yet have started looking for insurance, but when they do, the brand wants to be at the top of their minds.
Sophisticated marketing departments already automate the flow of data into the AI models used on platforms like Facebook and Google. This provides near-real time updates of the ideal customer and increases the chances of customer acquisition.
They use internal data, and are increasingly looking to augment this with external data from research companies to target wider audiences or new markets.
Visualise the customer journey
Data analytics can help marketers visualise the customer journey, including lifetime spend and product evolution. Data not only provides insight into creating new revenue opportunities, but also insights about protecting revenue by reducing churn.
Highlighting customers with a high likelihood to churn empowers the marketing team to develop retention campaigns.
Companies today can use a range of sophisticated tools to report on and interrogate customer data. Marketers can track marketing key performance indicators (KPIs)—including budgets down to the costs per lead—to make decisions in almost real time. The next step is to bring this level of measurement to offline conversions.
There are powerful solutions for tracking online to offline conversions and feeding that data back via a customer relationship management system into the ad platforms for cross sell and upsell opportunities. This can be done by adding unique identifier fields on lead forms. If that person then buys something through the call centre, they can be matched to the lead form and the original source.
Organisations should treat their data as a valuable resource. Data teams need to ensure people in the business can access the data they need, but only that data. Managing customer data in particular comes with higher internal and legislative responsibilities. Data governance and security should always be top of mind for any team working directly with customer identifiable data.
Marketing departments have been moving into the digital space for many years, but few to date have managed to fully use the data that the organisation has to drive better marketing value. At +OneX we have focused digital marketing, data and AI departments that work together to help our clients achieve more with their marketing spend.