5 Core Elements of a Sound First-Party Data Strategy

Google’s surprising decision to delay deprecating third-party cookies in Chrome has only sharpened the urgency for players across the programmatic ecosystem. Regardless of any delays or perceived reduced urgency, the “looming threat” of identity deprecation has become a reality for all programmatic marketers.

So, what’s an ambitious marketer looking to maintain performance, budgets — and possibly their job — to do?

Many of them know the answer: lean on first-party data. It’s a tired trope at this point, but it’s also true. First-party data will be the most valuable asset for every marketing team once cookies disappear.

But developing a first-party data strategy can be overwhelming — particularly for those without data science resources and significant AdTech budgets. First, you have to capture and organize your first-party data (for some of the basic strategies you can deploy today, check out my previous post). Then, you have to figure out how to actually extract value from that data in your existing growth channels. 

It can be tempting to put off your data strategy until next year or the year after and hope legacy cookie-based optimization tactics will somehow keep working. But the longer you put it off, the quicker you’ll fall behind and put your business at risk.

In this post, I’m giving you a headstart by outlining five straightforward ways to derive value from your first-party data. Let’s dive right in.

How to Jumpstart Your First-Party Data Strategy

1. Segment and Target Customers by Lifetime Value (“LTV”)

First things first, isolate your most valuable customers. The simplest way to calculate their value is to multiply total customer value by the average customer lifespan:

‍Customer Lifetime Value (LTV) = Total Customer Value ($) x Customer Lifespan (years)

Apply that formula across your customer base and begin grouping your customers into low, medium, and high LTV buckets. Then, consider the following ways to handle each group:

• High LTV: These are your rockstars, and you want to find more users like them, so they are the group you should use to build lookalike audiences. Just make sure that you are suppressing these users from any campaign using the lookalike audience. Otherwise, ad platforms will spam and annoy your most valuable users with irrelevant ads.

• Medium LTV: These customers have shown some intent and interest but need a nudge to buy more or different products. This customer group is a great candidate for cross-sell, promotional, or remarketing campaigns. Just make sure you are removing them from other campaigns, such as top-of-funnel branding or awareness campaigns.

• Low LTV: These customers have limited potential value to your brand. This group is the ideal “existing customers” group for audience suppression. They’re not likely to be influenced by additional ad spend, and the cost to squeeze a few more dollars out of them isn’t worth it — even if you can get them to convert. Removing these users from all ad campaigns allows you to focus your ad dollars on higher LTV customers or on acquiring net new customers.

2. Create Lookalike Audiences from Your Highest LTV Customers

Once you know who your best customers are and what they respond to, it’s time to find other prospects with a similar profile and market to them. There are plenty of vectors to do this across the open internet, such as The Trade Desk’s Galileo, and in walled gardens, from Facebook audiences to Google’s optimized targeting to Amazon’s overlapping audiences.

These lookalike audiences won’t be perfect off the bat. But as your first-party dataset expands and you run more experiments, you’ll start rooting out the most significant shared behaviors and attributes across your customer base.

For example, perhaps the blogs customers read impact performance more than the stores they shop at or their preferred airline. Knowing the relative weight of these factors will help you refine your lookalike and bidding strategy.

However, when building lookalikes from your high LTV customers segment, you must ALWAYS remember to exclude that same segment from all campaigns targeting the lookalike audience. If you don’t, the ad platforms are likely to target a significant number of your most loyal and valuable customers with ads that don’t apply to them. This wastes your ad budget and, worse still, alienates your most valuable customer segment.

3. Enrich Your Data

Once you’ve identified your high-value customers, you need to figure out two things: (1) how to make them continue buying and (2) how to acquire more customers like them. But this can be tough to do with the data you have. So you’ll need to enrich it.

One way is to leverage privacy-conscious identifiers, such as UID 2.0. These identifiers are built off of email address or phone number and can be safely used across various apps, websites — even connected TVs, to match with other datasets.

For example, you might approach a third-party data provider like Experian, TransUnion, or LiveRamp. Because of the UID 2.0 linkage, you’ll be able to see that most of your high-value customers belong to certain demographic groups or have specific spending behaviors.

You can also leverage identifiers when working with publishers. If you both work from the same identifier, such as UID 2.0, , you can buy the most relevant impressions that tie back to your audiences. As signal deprecation worsens, identifiers will become the way to hone your user targeting strategy, so long as you have enough high-quality first-party data.

4. Personalize Ads Based on First-Party User Data

A more detailed understanding of your best customers allows you to tailor ads to each segment of your audience and the buying stage they’re in. I’m seeing this a lot in B2B. Companies are personalizing LinkedIn ad copy based on a prospect’s industry, role, and title. Sometimes, the ads even address me by name!

In the consumer space, Rivian is a great example. I was recently in the market for an electric car and researched their site, including their list of local dealerships. Shortly thereafter, I started seeing ads based on some of the features I looked at on their website and received an email invite to their next prospective owner event — at the dealership closest to my address.

At the event, I saw all the vehicles up close and learned more about their unique characteristics, which really made me want to buy one. Then, I was hit with more customized ads that continued to tempt me. You need this level of agility to meet customers exactly where they are.

5. Retarget Your Best Leads

Any time a great lead takes an action showing intent — visiting a pricing page, signing up for texts, registering for an event — is an opportunity to retarget them. 

But you don’t want to show warm leads ads that are irrelevant to their stage of the buying journey, such as general awareness ads. Instead, a video of your product in action or social proof will be likelier to push them toward conversion.

That also means you’ll need a sound, real-time suppression strategy to make sure that when you are retargeting engaged leads with relevant ads, you are also removing them from irrelevant ad campaigns.