First-Party Data Fueling Brands’ Programmatic Strategies

First-Party Data Fueling Brands' Programmatic Strategies

Programmatic advertising is on track to become the most dominant form of digital advertising, evolving from a way for brands to unload excess inventory to an effective brand-building and lead-generation strategy.

The numbers bear it out. Close to two-thirds (62%) of all money spent on advertising in digital media in 2019 will go toward programmatic, according to Zenith’s Programmatic Marketing Forecast. Advertisers are on track to spend roughly $70 billion on programmatic this year and are predicted to spend a total of $98 billion programmatically in 2020, representing 68% of their expenditure on digital media advertising.

Fueling programmatic is, of course, data. Marketers who spoke at AdExchanger’s Programmatic I/O conference, in New York in mid-October, said they are experimenting with ways to retain or take greater control of their data. A focus on first-party data has become a huge priority for brands.

Nutranext is one example. In October, the direct-to-consumer (DTC) vitamin supplement brand, which was acquired by The Clorox Co. in 2018, launched a new pure-play e-commerce brand called Objective for which first-party audience data has been a crucial component of its strategy, said Vivian Chang, VP of growth, Nutranext DTC, during her Programmatic I/O session.

“We built the technology stack from the ground up,” she told attendees. “We knew data would be foundational.”

Nutranext uses quantitative and qualitative information about its customers to inform targeted solutions and foster close relationships with them, Chang explained.

“We use the attributes we know about a group of people and give them a different site experience vs. another [group],” she said. “The key is really getting that data, in both the analytics of how users are engaging with the website and with media, but also … qualitative feedback through customer surveys and through customer care as [we’re] talking to different consumers.”

First-party transactional data provides Nutranext with closed-loop reporting that serves as a powerful guide not only for its business, but with lessons that can also inform strategy around Clorox’s well-known retail products in the future, Chang added.

Future-Proofing The Data Strategy

In her session on data strategy, Judith Hammerman, head of Americas for Adobe Experience Platform and Adobe Audience Manager, echoed the need for foundational data.

Companies need to start with a “true system of record” that stores and manages data from all sources and teams in a unified infrastructure with governance and identity management throughout, Hammerman said.

“If the data isn’t right at the very foundation level, it won’t operate for you in real time with governance and intelligence,” she said.

NBC Universal, for one, is seeking a way to attain its own true system of record. The broadcaster came out with the industry’s first cross-platform, unified ad currency metric that captures all advertising exposures across all screens and all platforms, according to Denise Colella, SVP of advanced advertising products and strategy for NBCU.

“We’re swimming in a pool of data,” Colella said at the conference, adding the ideal is “one enterprise system that integrates all that information.”

Contextual Targeting

Marketers and media outlets are also employing first-party data for ever more sophisticated contextual targeting.

Jarrod Dicker, VP, commercial strategy, technology, and development, at The Washington Post said first-party data fuels the paper’s approach. “Everything we do is tied to our contextual data and the products built from that,” Dicker said.

It also helps the media company better understand its audience’s consumption patterns, he added.

“The context of the consumer journey is very interesting for us and something that from a first-party data perspective we’ve been cataloging for about five to seven years,” he said. “[We gain an] understanding where consumers are coming from, what content they’re consuming, what content type they’re consuming, what sort of advertisements are most interesting, and building a wealth of data based on their journey.”

Contextual targeting isn’t “necessarily new,” Dicker said, but it has become a new approach for the Washington Post. “Products tied to contextual built on our data that is unique to what we do is a huge differentiator,” he said.