The current state of marketing relies heavily on third-party data. This is the case even with the rise of stricter privacy regulations over the past couple of years. In fact, there was over $12 billion invested in third-party audience data in 2020. It’s understandable why marketing invested heavily in third-party data for all these years — doing so allowed marketing teams to cast a wider net and speak to a wider audience.
However, the landscape is shifting with a strong emphasis on protecting consumer privacy and giving customers greater control of their experiences with brands. Google’s upcoming third-party cookie ban reinforces this commitment. Given this significant change in priorities, it begs the question, should data-driven marketing efforts start prioritizing quality over quantity?
Why Marketing Data Quality Matters
Simply put, poor data quality has a real business impact. Gartner research found that organizations believe poor data quality to be responsible for an average of $15 million per year in losses. Poor data quality can also lead to more damaging consequences if teams utilize this data to optimize the digital experience. A 2017 survey by Accenture found that a lack of trust and poor personalization could be costing U.S. businesses as much as $756 billion in lost revenue every year.
It’s important to recognize that poor marketing data quality can have long-lasting impacts, including damage to a brand’s reputation, which is even more critical these days as brands compete for customer loyalty. Given the real business impact at stake, there is an opportunity for teams to rethink the foundation for their marketing strategy by shifting the focus towards marketing data quality over quantity. In other words, this is the time for brands to fuel their marketing efforts by leveraging high-quality customer data.
Aren’t We Already Using High Quality Data?
To answer this question, first it’s important to understand the differences between the different types of customer data your company may be collecting.
At Blast, we’ve been involved in numerous conversations with stakeholders where they respond “Yes” when asked about collecting and acting on first-party data. However, digging deeper, we tend to find that this is not the case; instead, their team relies on other types of data. Therefore, it’s worthwhile to take a deeper look at your data-driven marketing foundation to better understand what types of data are fueling your current strategy.
With the increased focus on protecting consumer privacy, it’s pretty widely agreed that the future of marketing should be built on quality first-party customer data. However, brands can take it a step further and create a true competitive advantage by leaning into zero-party data.
Zero-Party Data – Is that Even a Thing?
Yes, zero-party data does exist! As defined by Forrester Research, “zero party data is that which a customer intentionally and proactively shares with a brand. It can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize [them].”
The value here is that zero-party data eliminates the guesswork for brands because your customers tell you what they want. You can’t get better quality data to work with than the information your customers voluntarily tell you!
Creating a data-driven marketing strategy based on what the user is saying they want or are interested in enables teams to hyper-focus on delivering high-quality experiences rather than prioritizing efforts spent on targeting the biggest audience. A good comparison here is when teams are tasked to improve the on-site experience for lead generation.
One approach is to create a strategy focused on increasing overall lead completions, regardless of quality. Essentially this is playing a numbers game; the more leads you bring in, the more leads you hope to close. While it’s nice to increase overall lead volume, this can waste resources and costs incurred by having to go through and qualify/disqualify those leads. At the end of the day, greater overall lead volume doesn’t necessarily equal greater ROI.
Compare that to another data-driven marketing approach centered around strategic optimizations focused primarily on driving quality leads, although overall leads may decline. Such an approach is likely to reduce wasted resources since leads coming in are already more qualified. Efforts can then be spent on engaging and retaining such leads, ultimately leading to greater ROI in the long term. Similar to this approach, shifting the marketing mindset to focus on a first-party and zero-party data strategy will allow your team to engage with qualified users from the start and invest in their customer journeys, resulting in a more impactful relationship in the long run.
Increasing Focus on the Business Impact
At Blast, we are seeing that stakeholders are increasingly focused on understanding the true business impact of their data-driven marketing efforts. With third-party data cookies going away, now is the perfect time to evaluate the best approach for delivering this business impact. While establishing a first-party data foundation is a must, brands that layer in zero-party data as well will have a competitive advantage. Doing so will require a shift in mindset away from quantity and prioritizing quality instead.
There’s no question that marketing today is about the customer relationship and not just the immediate transaction. That’s why using high-quality data, such as zero-party data, is advantageous because brands can confidently deliver a highly relevant message based on information the customers knowingly provide and engage them in a meaningful way across their journey.