COVID-19 has forced companies worldwide to get creative with their business strategies. In fact, it’s led many to create new revenue streams and business models to sustain growth.
One lucrative avenue explored by brands across industries — media and publishing, retail, and financial services, to name a few — is data monetization (a.k.a. audience monetization).
More specifically, turning valuable first-party data into a ‘data product’ — in addition to utilizing it in their own customer lifecycle orchestration and marketing efforts — is how leading organizations are gaining a (sizable) competitive advantage today.
(Especially during difficult and uncertain economic periods like 2020.)
In his 2019 report on retail business growth strategies, eMarketer Principal Analyst Andrew Lipsman noted the common traits found in brands that successfully monetize their data:
“Companies best positioned to monetize their customer base through advertising will have both quantity and quality of first-party customer data, heavy online traffic volume, an advertising tech stack and an organizational commitment to the business.”
The first step to monetizing data? Building a robust, relevant data set with the right tech.
With detailed, real-time information and insights on all your prospects and customers, you can not only improve your own marketing efforts and accelerate business growth, but you can also capitalize on that first-party data by sharing it with partner companies.
First-party data monetization: A growing trend — and a proven revenue driver
“Many organizations do not manage customer data as a corporate asset, and the monetary value of that data is often ignored,” Gartner noted in 2015 following its big data conference.
Fast forward to today, and this is still very much the case for countless businesses.
Numerous large-scale brands have (finally) prioritized first-party data collection to scale and streamline their marketing teams’ daily activities. (Especially in light of cookie deprecation).
Brands that leverage their first-party data effectively can provide more individualized, bespoke customer experiences via their cross-channel strategies — and use data from both online and offline sources to better understand customer and build segments.
But this is just the tip of the iceberg when it comes to how mid-sized and enterprise organizations can use their data to improve their bottom lines and navigate turbulent waters (see: the foreseeable future) as consumer data privacy increases in importance.
Just look at how two well-known brands in two popular industries have taken advantage of their first-party data through inventive and innovative data monetization strategies.
Advertisers are in a precarious position today: The end of third-party cookies is nigh.
The demise of the once-valuable marketing resource has led many brands have had to explore new options for targeting and retargeting prospects and customers in ads.
Interestingly, media companies were some of the first to monetize their audience data.
Take media conglomerate Conde Nast. The brand recognized it could help advertising partners shift their strategies by allowing them to capitalize on its wealth of first-party data.
Recently, the company created a new platform, Spire, that enables businesses who buy ad space on its web properties — often travel, retail, and beauty brands — to reach the right consumers (i.e., those who expressed interest in content related to their products and services) with the most relevant, personalized messaging across channels.
By gaining direct access to Conde Nast’s “high-value audiences,” the marketers at its partner organizations can ensure consistently strong ROI from their targeted advertising.
But you don’t have to be a Conde Nast to monetize your data and accelerate revenue.
In fact, a number of BlueConic customers utilize their first-party data asset built in our CDP to provide their advertising partners with highly targeted segments to increase their conversion rates and build better brand affinity. (But more on that later.)
Non-traditional industries like retail have also implemented data monetization programs.
Pharmacy chain CVS, for instance, set up a similar data monetization program that’s available to partner brands via its proprietary advertising network, Media Exchange.
According to AdExchanger, the purpose of the Media Exchange data product is to “help advertisers and suppliers reach CVS customers when they’re in the shopping mood.”
In short, advertising partners — like consumer packaged goods (CPG) brands — can target individuals across channels by leveraging CVS’s first-party data.
Roughly 70% of those residing in the U.S. live within three miles of one of CVS’s 10,000 brick-and-mortar locations, the company recently noted. Moreover, 4.5 million people across the country shop at or are served by CVS online or offline each day.
Suffice to say, CPG companies that stock merchandise at CVS locations nationwide have plenty of reason to want to utilize the chain’s considerable customer data set.
For instance, CPG partners can take advantage of the Media Exchange network by determining which shoppers to serve ads (video, search social, and banner) across the web, on the CVS website, and even in in-store placements at physical retail stores.
Thus, it’s evident these organizations can greatly enhance their CPG marketing efforts and ROI by tapping into their associate vendors’ consented, high-quality customer data.
Building second-party data relationships another option for monetizing data
If creating a first-party data product seems daunting (admittedly, it takes legwork and time to get one of the aforementioned platforms and programs up and running), there’s another data monetization alternative: building second-party data relationships.
A data exchange program with another reputable brand a) you know will ethically and legally use your first-party customer data and b) whose first-party data sets could prove highly valuable for your marketing program (i.e., finding companies with target audience overlap) is a premier way to improve your marketing ROI.
Second-party data you secure from a partner business could also augment your existing profiles for shared customers. This means you can gain more information regarding prospects, buyers, and subscribers that can enhance your existing segments.
You can also share first-party data with trusted partners so they can reap the same rewards.
With BlueConic, you can even manage consent and federate it across your tech ecosystem, meaning you can ensure you only share data a customer permits.
As Ad Age contributor Gary Walter explained, though, trust is vital in any data-sharing relationship — particularly second-party data partnerships between organizations:
“As second-party data relationships are coming back into fashion, marketers who take proactive steps to ensure privacy and ethical use … will reach the highest number of receptive customers.”
Translation: It’s crucial the companies you ultimately form longstanding second-party data partnerships properly (and legally) use your first-party data in their marketing efforts.
Just like you and your marketing team work hard to retain your own customers’ business in the long run, your best bet for a thriving data monetization strategy is to get partner businesses to invest in your ‘data product’ for a prolonged period.
And you can realize similar returns from your data product by building your data monetization plan — whether it’s one or both of the two approaches featured here or an entirely different avenue — around a pure-play customer data platform (CDP).
Devising your data monetization action plan with a customer data platform
“Every company operating today is a data company,” a quartet of data analytics pros noted for MIT Sloan Management Review on the various types of data monetization approaches.
The key to sustainable success as a ‘data company,’ though, is to form a streamlined data monetization framework.
That is, you need high-quality, first-party customer data you can conceivably share with or sell to other organizations is persistently stored, always accurate, and easy to package up (i.e., segment and activate across platforms) and provide to partners as required.
Enter the customer data platform, which checks these three important boxes.
BlueConic Director of Product Marketing indicated to Marketing Toolbox how — thanks to providing a single, complete view of every individual in a profile database— a CDP can enable various data monetization use cases for brands:
“Some brands, like media and publishing organizations, leverage their data assets to diversify their revenue. They can use a CDP to build interest or product-based audiences to share with relevant partners, including those who buy ad space.”
In other words? Dynamic segments of prospects and customers that update in real-time, account for all individuals consent preferences, and incorporate their latest behavioral and engagement data are your most valuable data monetization asset.
BlueConic is the technology that can provide you and your business this constantly ‘refreshed,’ persistently stored asset that can lead to data monetization success.
Take a number of publishing customers that use BlueConic’s CDP for data monetization.
Leveraging our Interest Ranker 2.0 feature to track the interests of its readership (i.e., browsing and buying habits) and storing that in unified customer profiles, our publisher customers can sell targeted ad space on their websites. What’s more, they compile those interests into custom segments and bundle them, so to speak, for advertisers.
News-Press & Gazette Company, for example, shows any individuals interested in “travel” a lightbox that showed pictures of “vacations” or “wildlife” on the homepage. This drove traffic to advertisers’ sponsored content and display ads on their travel landing page.
The brand also saw a much higher click-through-rate by tailoring lightboxes to distinct travel audiences. This ultimately drove more traffic and conversions to ad partners’ pages.
BlueConic can help media companies and retailers alike store their first-party data in an accessible, centralized database they can use to build premium ad products for partners. Or, they can use our BlueConic-to-BlueConic connection for second-party data sharing.
The point is this: The era of customer data monetization is a proven approach to both cope with the diminished value of third-party data and take advantage of the continual rise in value of first-party data.
All in all, monetizing customer data yields substantial return on investment for mid-sized and large-scale brands alike — so long as they have the right people, processes, and tech.
Learn how a customer data platform unlocks new revenue opportunities and enhances operational efficiency for enterprise brands in our on-demand webinar.