In an era where consumer privacy is paramount, leveraging first-party data has never been more critical for marketers and agencies. A recent joint report from Cint and Lotame, titled ‘The State of Data Collaboration: A Global Perspective’, paints a concerning picture of the hurdles marketers face in effectively utilizing this invaluable data source. With 70% of surveyed professionals recognizing the importance of first-party data, the challenges in its utilization reveal underlying issues that could hinder marketing effectiveness.
One of the most significant challenges identified in the report is the difficulty in finding quality data enrichment and collaboration partners. As businesses aim to create a comprehensive view of their customers, the need for high-quality, actionable data becomes essential. However, establishing partnerships to enhance first-party data can be a laborious process, often requiring significant time and resources. For instance, a retailer looking to augment its customer data with insights from a loyalty program may find that potential partners are reluctant or lack the necessary capabilities, creating a bottleneck in data efficacy.
Moreover, the limitations inherent in first-party data collection present another serious obstacle. Marketers often find that their own data, while valuable, does not paint a complete picture of customer behavior and preferences. A survey conducted revealed that over half of marketers (53%) and agencies (50%) are now turning to artificial intelligence (AI) to solve this problem. AI can analyze vast amounts of data quickly and effectively, identifying patterns and providing insights that may not be immediately apparent through traditional analysis. This growing reliance on AI tools signals a shift in strategy among marketers seeking to enhance their understanding of customer interactions and drive better campaigns.
In addition to these obstacles, a substantial reliance on third-party cookies for consumer identification persists. Nearly a third of marketers (32%) and over a fifth of agencies (21%) rely entirely on these cookies, indicating a serious dependence on technology that is becoming increasingly less reliable due to privacy regulations and changes in consumer behavior. In light of this, a mixed approach to identity solutions is emerging, with marketers and agencies utilizing an average of 2.6 and 2.9 different identity solutions, respectively. This disparity highlights the challenges businesses face in effectively identifying and reaching their target audiences in a landscape that is rapidly changing.
The report forecasts a decline in programmatic ad spending as well. With 55% of marketers and 45% of agencies expecting a decrease in this area, there may be significant shifts in how advertising budgets are allocated in the future. It is anticipated that spending will become evenly divided between closed platforms, commonly referred to as “walled gardens,” and the open web. This change underscores the need for marketers to rethink their strategies and look beyond traditional channels to connect with consumers.
Laura Manning, Senior Vice President of Measurement at Cint, remarks, “This research offers a deeper view of how marketers and agencies are navigating the current advertising challenges.” The obstacles identified in the study reflect a pressing need for better data orchestration and utilization. A staggering 98% of respondents reported facing barriers in these areas, suggesting that marketers may be spending more time managing their data than leveraging it for effective campaigns.
Despite these challenges, there is a strong inclination toward adopting new technologies. The research posits that 99% of respondents plan to invest in fresh marketing technologies, while 96% aim to scale new data technologies. This collective ambition speaks to a willingness within the industry to innovate and improve data capabilities.
Andy Monfried, CEO of Lotame, highlights this transitional period in marketing, noting that while significant obstacles exist, there is a shift in mindset. “Rather than becoming mini walled gardens, marketers and agencies are recognizing that a rising tide lifts all boats,” he states. This new perspective emphasizes the importance of collaboration, underscored by the rise of data collaboration platforms designed to facilitate this partnership and enhance data sharing.
The insights from ‘The State of Data Collaboration’ provide a crucial understanding of how marketers globally are addressing the current challenges in digital advertising without reliance on third-party cookies. With responses from over 1,200 industry professionals across major markets including the UK, Australia, Brazil, Mexico, Singapore, and North America, the research examines various aspects, from the state of data usage to advertising investment distribution and technological evolution.
As the marketing landscape shifts, the ability to properly leverage first-party data will determine the success of future campaigns. Marketers must navigate these hurdles effectively, embracing innovative technologies and collaborative strategies to create robust marketing ecosystems. Only through understanding and overcoming these challenges can they look to optimize their efforts and foster lasting customer relationships in a digital-first world.
