Why a data-first approach is essential for modern marketing success

Data has indelibly become the most valuable commodity for brands. For the marketers who’ve harnessed the power of data, there has been a visible progress in marketing efficiency, sales growth, and even customer satisfaction. 

With how digital is shaping up, CXOs and CEOs rely heavily on digital data to make decisions. The appeal is conceivable, given how previously unimagined marketing strategies have come into existence on account of proper data management. Between contextual marketing and performance analytics, data-driven strategies have been the best recourse for brands, of late. 

But there is still a lot to learn, and MMA India has come around with a how-to guide. 

The marketing trade association has unveiled a sneak preview of its soon to be launched ‘Winning with Data: The CXO’s Handbook’ report. The report sheds light on the best practices for data-driven marketing.

Moneka Khurana, country head, MMA India reveals to afaqs! that the trade association has previously had a dedicated taskforce that focused on data and martech. But now, the same council has been refreshed with newer members, who are now collectively working towards ensuring that enterprises invest into the right martech stacks and utilise them optimally.

The soon to be released report has also had key contributions from other members such as Google, Accenture, Unilever, Flipkart Ads and Vserv AudiencePro. With the effort, MMA is aiming to bring the entire ecosystem of data platforms together for a more holistic understanding of data science. 

There has been an ongoing discussion on the inevitable elimination of cookies (third party data). In fact, tech giants such as Apple (with its Safari), and Mozilla’s Firefox have already parted ways with the practice. Google will follow suit, tentatively by 2024. This has pushed marketers into investing in first-party data (FPD) acquisition. But just how necessary is FPD going to be in a cookie-less future?

Khurana answers, “First party data helps an organisation understand the consumers very deeply and allows them to personalize their products, and their communication far more effectively. So for instance, FPD will help brands differentiate between an interested customer versus intent driven customer.”

But first-party data is limited to what brands collect from their own portals and platforms. Which also means that the consumer insights they gather are only pertaining to their own products, and not beyond it. This is where second-party (2P) data comes in.

“2P data brings scale, where brands can now understand what customers are doing outside of their platforms. This includes their preferences and their purchasing habits, thereby helping brands create more targeted campaigns,” Khurana points out. 

Basically, at any given point in time, the right strategy for the brand is to do blended campaigns between first-party data, second-party data and third-party data. Khurana opines that it is inadequate for brands to invest on FPD marketing. 

The acquisition of 2P data is a little nuanced. Since brands have no collection of consumer insights beyond their own platforms, they rely on partnerships with other data platforms that serve as audience data marketplaces. 

But with more and more brands investing in building their own infrastructure for FPD, how does that impact the partnership with MarTech entities who have for so long provided brands with necessary data? Khurana believes that the shift has no implication on the 2P partnerships, and will only allow better utilisation of martech stacks.

Currently, as per a study done by FICCI in association with EY India, 44% of brands are already investing in martech stacks or outsourcing the same. The participation of brands in martech is expected to grow exponentially, according to the report, with digital spending likely to increase by 85% by 2025. 

With an increased demand for refined consumer data, there is also a looming risk of privacy breach. As per a study done by Accenture, 73% of Indian consumers are willing to share their personal data if they trust the company and their ability to respect data privacy. The report also reveals that 71% of consumers are likely to shop with companies that have strong data protection policies.

Commenting on what goes into the making of a privacy-proof data ecosystem, Khurana elaborates, “It is very important that there is a privacy-ready infrastructure in place. This helps the brands comply with the governance policies. It also helps marketers manage something called data clean rooms or DCRs, in a manner that helps them enrich data, get better insights, and produce better campaigns within that cohort.”

A data clean room provides brands with cumulative and anonymised consumer data to protect user privacy.

The right kind of partnership with MarTech firms could also yield rewards for brands in an overall more generous LTV from customers. The implications of 2P data within the space of customer experience management could translate into a very formidable base of loyal customers. This, according to Khurana also depends on the level of proficiency amongst marketers with regards to data science.

“Marketers are still navigating the journey around data-driven marketing, and are going through something called a data maturity curve. You have some marketers who are nascent versus those who are advanced (in their approach). There is a need for investing in the right skill sets to be able to do more justice to first party data.”

Khurana also suggests that brands need to invest into the right kind of collaborations to manage data more effectively. “It’s about researching and creating the right stack of collaborations. Brands must also continue to upgrade their martech and data stacks, as well as utilise them more efficiently. From our previous studies, we’ve learned that marketers might have all the tools and infrastructure, but it just sits there highly underutilised.”