CMOs struggle to balance first-party data needs with value creation
The great migration by marketers to first-party data is encountering some bumps in the road, even as many have been careful in managing the transition from a privacy standpoint.
Chief among the issues is that consumers are growing more reticent to fork over sensitive personal information unless there’s a clear benefit to doing so on their end. That’s one of the biggest takeaways from Gartner’s latest CMO research, which draws on surveys of nearly 400 marketing professionals that were conducted in late 2022.
Just 36% of those surveyed by Gartner strongly agree that they are prioritizing first-party data to create more immediate customer value, while a little less than half (47%) somewhat agree with this statement. Still, there are signs of progress. For instance, 42% of respondents stated they are able to execute one-to-one personalization, a goal that was previously seen as a “holy grail.” More than three-fourths (78%) are also encouraging customers to manage their own data.
Of the surveyed marketers, 60% believe executing first-party data strategies that balance a value exchange with privacy will be more difficult this year. Privacy headaches persist even as 85% of leaders in the industry have now introduced a formal policy around customer data management. Nearly one-third of respondents to Gartner said they have cut ties with an agency or channel partner over the past year over trust- or privacy-related concerns. The trend follows not just growing consumer wariness, but also an uptick in privacy laws and regulations that can mete out hefty fines for violations.
The report also argues against the belief that a focus on fewer channels makes pivoting to first-party data easier. Gartner asserts that the opposite is true and that many organizations with a broader channel mix have been more successful on this front. Close to half of marketers that manage 11 or more channels increased their first-party data collection, while just over a quarter of organizations that work with 10 channels or fewer did that same. Those overseeing a more diverse channel mix were able to drive growth through new experiences, while 24% were applying artificial intelligence to engage consumers.
Persistent challenges in balancing privacy with personalization come as organizations face the looming deprecation of third-party cookies and other forms of what’s termed “signal loss.” Google has set 2024 as the expiration date on cookies, though the tech giant has extended the deadline several times already. Regardless, it’s an expected policy change that has roiled the industry and set off a mad dash for alternatives, few of which have achieved scale or a consensus as a viable replacement.
“Third-party cookie depreciation is causing sources of data to disappear, and many marketers are still scrambling to shore up their first-party data strategy,” said Ant Duffin, senior director analyst at Gartner Marketing, in a statement. “As this data becomes more challenging to collect, marketers must adapt by leveraging new sources of data to fuel personalization and build deep customer relationships.”
Even as the benefits of first-party data are becoming clearer, many marketers have trouble weaning themselves off old mainstays. A Datonics survey revealed that more than half (53%) of digital marketing campaigns still use third-party data derived from a variety of sources. Behavioral data, interest intent and demographic information were among the most valued data categories.