Blog February 01, 2023 |

Webinar Q&A: Why Second-Party Data is Becoming a Mainstay in the Privacy First-Era

Thank you to everyone who attended our recent webinar, “Why Second-Party Data is Becoming a Mainstay in the Privacy-First Era.” We received more questions than we had time to answer in the allotted time, so our hosts have answered them below in this Q&A-style blog post.

If you weren’t able to join the webinar live, don’t worry – you can watch it on-demand anytime. And when you’re ready to talk to us about how you can leverage second-party data as part of your data strategy, please don’t hesitate to reach out.

What are the different types of data clean rooms out there?

Data clean rooms are still a bit of the wild west, but three main flavors are beginning to emerge:

  • Data clean rooms that act like next-generation data management platforms (DMP) sans cookies: These clean rooms enable you to combine audience data together from multiple parties and then directly target the individuals that make up that combined audience with digital ads. However, questions are beginning to arise as to whether activation of an audience directly from a clean room violates the intent of data privacy regulations like GDPR. Even though PII data isn’t revealed or exchanged in the clean room, personal data is still being used as the basis for matching – a practice that may come under the scrutiny of regulatory bodies.

  • Data clean rooms designed for data scientists: These clean rooms tend to require a lot of dedicated resources with technical data sciences skills, who use them to run intense analytics projects on the combined datasets in the clean room. While these clean rooms offer valuable insight, they aren’t business-user friendly, particularly for marketing, customer experience, and other growth-focused teams who are on the front lines of customer engagement and need to be more agile in the actions they take from insights gained.

  • Data clean rooms deigned for the business user: These clean rooms are explicitly designed to help marketing, digital product, and other growth-focused teams get actionable insights quickly, so they can take informed actions on their campaigns and programs that are already in market or are soon to be in market. BlueConic’s data clean room solution falls into this category of clean room.

If third-party cookies are dead, will there eventually be no third-party data available to marketers?

Data generated by third-party cookies is only one type of third-party data. For instance, data that is aggregated from multiple sources and then sold to marketers and advertisers, such as retail sales data for CPG companies, is also considered third-party data. Nonetheless, there is an intentional shift away from all third-party data, not only because of consumer data privacy considerations, but also because it doesn't offer an advantage when all your competitors have access to the same third-party datasets. It’s for these reasons that more and more companies are shifting from third- to first-party data. First-party data not only accounts to consent, but it’s also unique to your business and offers consumers much greater transparency into how their data is being used.

As an organization, how do we know if we're ready to embark on a second party data relationship with a partner?

The answer depends on the relationship of the parties involved and the status of customer consent. For instance, if your organization has multiple brands and countries operating as distinct entities under one parent company and you already have permission to share PII data across brands and countries, then you’re probably in a good place to start. Similarly, if you have co-marketing relationships set up (e.g., between a consumer goods company and a retailer, a publisher and an advertiser, co-marketing brands), then you can start exploring what types of agreements you already have in place and what types of data those parties can bring to the table. In general, parties you already have existing relationships with is the best place to start when assessing your readiness for second-party data sharing.

For a CPG company to use first-party data from a retailer, do they need to match them in clean rooms?

Today, many CPG companies put pixels on their retail partners’ purchase thank-you pages as a proxy for tracking transactions. However, this approach doesn’t capture whether or not those purchases were fulfilled, whether the item(s) were returned, etc. Moreover, these pixels represent a type of third-party cookie that is not only deprecating, but is also coming under increased scrutiny from IT teams that consider these third-party pixels a risk to the business. As more and more retailers scrub their websites clean of third-party pixels, the gap in understanding audiences and advertising performance will only grow larger. Fortunately, clean rooms provide a privacy-compliant way to achieve a similar effect in terms of measuring the effect of your marketing campaigns and programs on sales that occur on the retail side.

How can we attribute a sale on a retailer site using their data? Do we need specific agreements with them?

We would encourage you to work with your legal teams on the agreements that makes sense for your business and that relationship. However, it’s important to note that the data a retailer provides doesn’t just have to involve sales. For instance, if they can provide SKU-level data or market basket value, then you can start to get a really interesting and nuanced understanding of how your consumers are shopping at that retailer. And if you do this with several retailers, then you can start to see how one persona purchases differently at one type of retailer versus another and get even smarter in how you market.

Is a broker community emerging to serve as a ‘matchmaker’ between brands whose data might work well together?

This is a concept that’s existed for quite a while, with DMPs and marketplaces playing the role of ‘matchmaker’ by pooling audience data together from several entities and then selling it to marketers and advertisers. The lack of explicit consent from the consumer side, and their lack of understanding about how their personal data is being used is the reason why we’re seeing increasing regulation around consumer privacy. The companies that are prioritizing the transparent and ethical collection and use of consumer data are the ones that are going to set themselves apart in terms of customer loyalty and trust, and ultimately emerge as the leaders in their category.

I get the concept of the data clean room, but what sort of platform do you need to actually execute a clean room?

At BlueConic, we offer a data clean room option as an extension of your CDP environment. This approach enables business users to get to value from the clean room more quickly because they’re extending the value of the work they’ve already done to establish a first-party data asset. Additionally, the business user friendly interface of our clean room enables marketers and other business teams to uncover and act on insights without requiring ongoing involvement from technical and data science resources.

Are the mobile marketing platforms affected by cookie deprecation?

Absolutely. Mobile IDs are suffering the same fate as third-party cookies and will ultimately be phased out.

How will clean rooms impact the publisher-advertiser relationship?

While the publisher/advertiser use case is quite different from the consumer goods/retailer dynamic, they share the same overall concept of building upon first-party data assets. After many years of outsourcing revenue and audience monetization to third parties and walled gardens, the deprecation of third-party cookies is forcing publishers to reconsider how to take back control and that lost revenue. With a data clean room, publishers can create and offer new privacy-compliant ad products to their advertisers without an intermediary in between.

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