As the world becomes increasingly digital, businesses are facing unprecedented challenges in balancing privacy and personalization. The great migration to first-party data has encountered some bumps in the road, as consumers are becoming more reluctant to share sensitive personal information unless they see a clear benefit in return. This was the main takeaway from a recent Gartner CMO research, which surveyed nearly 400 marketing professionals in November and December of last year.
The report found that 60% of marketers believe executing first-party data strategies that balance a value exchange with privacy will be more difficult this year. This is despite the fact that 85% of industry leaders have now introduced a formal policy around customer data management. Additionally, nearly one-third of respondents said they have cut ties with an agency or channel partner over the past year over trust- or privacy-related concerns.
One of the biggest challenges facing businesses is the looming deprecation of third-party cookies, which has caused sources of data to disappear. Google has set 2024 as the expiration date on cookies, but this deadline has already been extended several times. 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.
According to Ant Duffin, senior director analyst at Gartner Marketing, “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. 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.”
Despite these challenges, there are signs of progress. For instance, 42% of respondents to Gartner 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.
Marketers are making moves to help streamline the first-party data shift, such as formalizing their customer data management policies and cutting ties with marketing services providers that do not meet their trust and safety standards. At the same time, Gartner indicated that diversifying media mixes could strengthen data acquisition efforts, an insight the researcher claims goes against conventional marketing wisdom. Close to half of marketers that managed 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.
As the benefits of first-party data become clearer, many marketers still struggle to wean themselves off old mainstays. A recent 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.
In conclusion, the challenges facing marketers in balancing privacy and personalization are significant, but there are signs of progress. Marketers must adapt by leveraging new sources of data to fuel personalization and build deep customer relationships, while also formalizing their customer data management policies and cutting ties with marketing services providers that do not meet their trust and safety standards. By doing so, they can successfully navigate the great migration to first-party data and drive growth through new experiences.
