The fast-growing sharing economy continues to disrupt industries from ride sharing to fashion to farm equipment, and it doesn’t appear to be slowing down. The success of Airbnb and Uber is spawning a multitude of new options for optimizing the value of underutilized resources. And in 2016, marketers will be joining the collaborative economy as they seek ways to maximize one of their most valuable assets: first-party data.
How Businesses Share
Marketers have actually been on the front end of this trend for years, using co-operatives for enriching customer data and increasing efficiencies. For example, catalog retailers have long shared their mailing lists with other retailers to reach a wider audience. And financial companies have combatted fraud by pooling their data.
Now the concept of collaboration in data-driven marketing is becoming a must-have conversation for brands who want to not only recognize their customers at every point in the journey, but to also reach them at the right time in that journey with the most relevant and engaging messages.
How Data Sharing Helps Achieve People-Based Marketing
Advertisers want to be a part of that customer journey, targeting their actual customers, not just cookies or devices. In other words, they want to achieve true people-based targeting.
This requires customer recognition, whether on desktops, smartphones, or tablets. It starts with leveraging first-party data from CRM and POS systems, which provide a wealth of historic customer information necessary for targeting. Then, to solve cross-channel identity, that offline data must be matched with online data and then activated for people-based targeting, measurement and personalization. This is the point, however, where many advertisers are faced with a lack of scale in their data.
To date, walled gardens such as Facebook and Google have been the answer to solving this cross-channel identity due to their enormous pool of cross-device consumer log-in data. But advertisers are beginning to recognize the limitations of depending on these platforms, as they put in their data to reach customers but do not get it back to build their own customer profiles and create a true universal view of the customer journey.
That’s why there’s so much industry buzz about second-party data right now. Second-party data is another company’s first-party data that is strategically shared with your brand, in exchange, most likely, for some of your own first-party data. This is how smart advertisers are achieving more scale for addressable advertising without losing sight of the whole customer journey in the process.
New technology, like that offered by Signal, is allowing brands to securely share anonymized data with trusted marketing partners to reach this scale and ultimately market to real people across all channels. This exchange is privacy-compliant and uses deterministic matching methods to fill in the gaps and become more informed about each customer and her journey.
This means that advertisers:
- Do not need to make assumptions about who they are targeting through third-party data or probabilistic matching because it uses actual customer identifiers across channels
- Can target actual customers, not cookies or devices, to create people-based marketing experiences that are more personalized and engaging
- Can break their dependency on walled gardens and create a true universal view of their customers
Sharing Requires Trust
In the new sharing ecosystem, participation in a collaborative data network doesn’t mean that your data is available for just anyone to use. Networks of complementary brands with overlapping audiences can create private trust groups. A network may include a publisher and its advertisers, an automaker and its dealerships, a retailer and its co-op advertisers, publishers within a premium ad exchange, or sub-brands within a larger retail organization.
The bottom line is that each member of the co-op will control with whom they share this data and what they share — while staying focused on the mutual goals of extending their audience reach and bringing the customer into focus.
As we’ve seen on the consumer-side with home and car sharing, the key to success in the sharing economy is offering a trust model that makes participants feel that their data is safe and secure:
- Before exchanging their hard-earned customer data, marketers will demand security and privacy compliance
- All stakeholders will expect transparency and fair value in exchange for shared data
Working together, advertisers can maintain control of their valuable data while accelerating their ability to recognize and target known customers across channels.
As it’s already done in other industries, the sharing economy will soon disrupt digital marketing, and data sharing will become a mainstream way of successfully targeting customers at scale. It will change how advertisers think about their data, and how they use it, scale it and share it, in order to achieve true people-based targeting and deliver more relevant customer experiences.