Are You Getting the Most Out of Your First-Party Data?

Click here to read the full article.

In an era when third-party tracking cookies are being phased out amid increasing consumer privacy concerns and ensuing government regulations, marketers and brands are now tasked with leveraging first-party data—such as a customer’s purchase history, e-mail address and zip code—they collect on their own to enhance the shopping experience.

Since first-party data is collected directly by a retailer via its own channel(s), it is far more reliable and accurate, in that it gives more insight into what a shopper is purchasing at a given moment, according to Ashley Firmstone, senior vice president of customer success at Rokt.

Collecting the data is one thing, knowing what to do with it is another. Brands are using technology like Rokt to leverage their data in real-time, delivering relevant offers to customers on a 1:1 basis. As a double-sided marketplace, Rokt serves as an intermediary between e-commerce businesses and advertisers, delivering outcomes for both parties by ultimately serving the end customer.

“Focusing on downstream outcomes rather than an impression or an eCPM metric, which most display companies or programmatic advertising platforms focus on, gives an added layer of relevancy to the customer,” said Firmstone. Adding it allows Rokt to deliver tailored ad messages and offers they know will provide value to the end user.

As e-commerce accelerates and competition increases, brands have needed to shift their focus from growth at any cost to profitability, with marketers facing more pressure than ever to prove the value of their spend. The performance of Rokt Ads does not rely on cookies, instead, it is powered by first-party data from e-commerce websites. Through advanced machine learning and intent-based predictions, Rokt’s algorithm ensures advertisers reach highly qualified prospects or uncover incremental audiences. By using first-party data to deliver relevant offers marketers can accurately measure conversions, closing the loop without compromising on privacy.

“With cookies, attribution isn’t always accurate. Marketers are being asked to prove the value of their spend while creating relevant shopping experiences,” Firmstone said. “An example we see quite a bit is advertisers serving ads to a customer who had already purchased the item.”

Rokt was founded with the mission to help companies unleash the potential of every transaction through relevancy. Rokt’s clients, including Hello Fresh, Priceline, Peacock and FTD, leverage their own first-party data to reach new customers in the buying mindset by serving relevant offers on e-commerce websites. E-commerce websites, including Wayfair, Lands’ End and Poshmark, leverage their first-party data to deliver offers and delight customers without compromising on customer privacy.

Firmstone compared Rokt to a customer relationship management (CRM) system, in that users can plug in different data inputs to determine what is relevant for the consumer, in an effort to drive customer acquisition, cart conversion and engagement, as well as repeat customer satisfaction and purchase value.

For example, if a consumer values VIP treatment and special offers alongside a purchase, Rokt may promote the retailer’s loyalty program. Or if a shopper buys tickets to an event, they may get a personalized offer to book parking at a nearby lot.

“The data is not always just contextual. It’s also historical,” said Firmstone. “Have we seen this person before? What were their preferences last time? We combine that with our ability as a trusted intermediary to work with advertisers to drive meaningful downstream outcomes. We don’t work with them on an impression basis, but instead, we focus on conversion. When we are serving a third-party ad, it’s something that we know that the customer is not only going to engage with, but they’re going to purchase. They’re going to sign up for Hulu subscription and they’re going to be a strong lifetime value customer for Hulu.”

Complementing the rise of retail media

A retail media network is an advertising platform that operates within a retailer’s ecosystem, allowing brands to serve ads to shoppers before they make a purchase. Retailers are expanding their use of retail media networks, but these networks are often limited to contextual or endemic offers that are displayed to a customer before they make a purchase. With Rokt, e-commerce retailers can apply their first-party data to deliver personalized non-endemic offers to customers in-cart and on the confirmation page. This enables retailers to provide a relevant customer experience across a customer’s full transaction journey while unlocking additional incremental revenue opportunities outside of pre-purchase endemic offers.

The concept is expanding as merchants seek out better opportunities to gather more customer data, and ultimately improve their relationships with brands. In 2023, digital retail media ad spending is expected to grow 25.7 percent to $51.36 billion, up from $40.81 billion in 2022, according to eMarketer.

Despite global concerns about the economy, the growth of retail media presents a promising solution for e-commerce retailers who are struggling to sell off inventory and facing escalated costs across the industry.

“Creating more streams of revenue and bottom-line profit is critical for that industry right now, so it makes sense that a lot of companies are leaning into other ways to monetize traffic and drive value,” said Firmstone. “Acquisition costs are going up. How much you have to pay to acquire a customer today is much different than what it was two years ago. You offset that cost of acquiring customers by monetizing or adding to the average order value or repeat purchase rate of that consumer.”

Firmstone said Rokt plays well within this ecosystem, namely because retail media networks are designed to solve the upper funnel of the purchase journey, which is typically focused on endemic products.

On the other hand, by focusing largely on the cart after the larger purchase decision has been made, Rokt instead can concentrate on the moment of transaction—leveraging customer data to upsell or cross-sell relevant products, or even offer new payment options like co-branded credit cards.

“I think that there’s space for both tools in the journey—we can add different areas of value within them depending on how a retailer thinks about building or using a retail media network,” said Firmstone. “Where we can also help is cleaning up the customer journey of what that flow looks like and really help to maximize and understand what data in your first-party data set is relevant to a particular consumer and how you’re serving that.”

Click here to learn more about Rokt.