Illustration by Sarah Kim / Shutterstock / The Current

How first-party data is transforming the open internet

January 5, 20234 minute read

Illustration by Sarah Kim / Shutterstock / The Current

It’s been three years since Google first announced its plan to kill off third-party cookies, an announcement that — at the time — posed a threat to digital advertisers that had long relied on the data pixels to target their audiences across the internet. Well, it’s 2023 and cookies are still with us. Thanks in part to an uncertain timeline, proactive digital marketers have sought a more resilient identity solution.

As we noted at the end of the year, almost every company with large consumer data touchpoints is launching some sort of advertising or media capability. In 2023, it seems the new gold rush is for first-party data, and that is transforming the open internet, according to Samantha Jacobson, chief strategy officer at The Trade Desk.

“It’s less about replacing the cookie and more about having an accurate sense of identity across ecosystems,” says Jacobson. “Through the pandemic, consumer behavior shifted so drastically, from consumption of television content to the way consumers shop. Their time is now spent across multiple devices — in-app or out-of-app streaming and browsing. And so having a sense of identity that can help connect all those touchpoints for a consistent message and consistent understanding of the consumer is critical, especially when looking at optimizing marketing outcomes.”

At a time when many brands are facing tightening consumer spending and flat — or negative — growth of marketing budgets, it’s more important than ever for brands and agencies to optimize their data across all platforms, Jeff Roach, the chief strategy officer at indie agency SCS, tells The Current. “It will be critical in 2023 to do more with less. Performance efficiency will have to come from operationalizing data insights, so ensuring [that] real-time data inputs are driving marketing actions is going to be critical to performance in an environment where every working dollar matters,” says Roach.

In this context, The Trade Desk just announced Galileo, its suite of tools for advertisers to onboard and activate their first-party data and customer insights in more efficient ways across the internet, which includes the ability to match audiences using Unified ID 2.0 (UID2). This allows publishers and advertisers to use UID2 to connect their data, thus enriching their audience insights. The Galileo “toolkit,” as Jacobson calls it, will allow “audience matching across all publishers, platforms, devices, and channels — including connected TV, or CTV.”

Significantly, she says, Galileo can allow advertisers to get an objective view of how their data is performing, which allows for campaigns to pivot on the fly in this newly enhanced data-rich environment. Such information is less transparent and objective within walled gardens, she points out.

“Operating in environments where data can flow openly allows for brands to get a much clearer picture of consumer tendencies and behaviors and that additional clarity has obvious impacts across all aspects of media,” Blake Williams, director of data strategy at The Shipyard, tells The Current. “Having a clearer understanding of who is engaging with your media allows you to better understand the why — allowing learnings from open media environments to fuel creative, targeting, budget allocation, and overall strategies.”

Privacy
Another key factor in the changing ecosystem is the heightened awareness around consumer privacy, both from a legal and a personal perspective. For this reason, industry analysts stress the importance of managing customer identities responsibly, which can go a long way to building trust.

“Every touchpoint is part of the conversation between you and your client and an opportunity to increase trust and loyalty. Let clients experience value in exchange for their consent. Give them control over their own data. This will increase the amount of data you have, and with it the possibility to still create strategies at scale,” wrote Nathan Struik in an article entitled “First-party data is key in a new era for digital advertising,” published last year by Deloitte.

With privacy changes and the waning of sales-tracking capabilities (particularly Google’s and Meta’s), marketers are seeing the value of the open internet, says Roach. That means embracing streaming platforms and CTV, as well as re-looking at new open internet opportunities, which tactics like HD-video programmatic display can now provide. “This is an advantage for brands, as our first-party data surrounding our customers and consumers is increasingly becoming more important to drive targeting and reach and attention through clean data rooms as a partnership with streaming platforms and other publishers, versus relying entirely on the black box of targeting options that the walled gardens provided,” he adds.

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