The Identity Refocus: Brands Leading User-Centric Advertising with First Party Data
This article first appeared in Little Black Book.
In today's landscape, where consumers wield more power and discernment than ever, the advertising industry faces the responsibility of shaping a future centered on the individual. As we navigate this transformative phase of media, the concept of user identity is in flux. With the imminent demise of third-party cookies, a critical question arises: Are brands and media platforms ready not only to engage but to deeply connect with their audience? The growing public demand for transparent, meaningful interactions underscores the pivotal role of user identity.
Dentsu's latest Trend report, titled "The Pace of Progress" offers expert insights into what we call "the Identity Refocus."
Innovating the New Data Landscape with User Identity
For years, third-party cookies quietly orchestrated digital advertising, enabling brands to track their audience's online activities. However, increasing privacy concerns and emerging regulations signal their decline.
The challenge for advertisers is to reimagine their approach while restoring consumer confidence. Leading global media platforms and brands are at the forefront of innovation in this evolving data landscape. Our 2024 Trends report highlights the enthusiasm of global platforms to better understand their users. For example, Netflix's efforts to map user accounts enhance content recommendations and boost platform monetization through tailored advertising. Amazon is following a similar trajectoryfor its Prime Video platform.
However, it's not all about data profit. Procter & Gamble, for instance, promotes first-party data collection for Pampers with unique tools like the "Due Date Calculator." This creates genuine value and engagement for expectant parents. Prioritizing first-party data can refine advertising efficiency and create more personalized consumer experiences.
By fostering transparent relationships with users and collecting first-party data, brands can balance engagement with privacy.
Authentic Verification: The New Gold Standard
The disappearance of third-party cookies has led to a demand for reliable user verification. Email checks, phone validations, and connections through social media are now essential tools to confirm users’ identity. Brands that incorporate these into their strategies not only enhance data accuracy but also set the stage for meaningful interactions.
Recent announcements from Meta, Snapchat, and X demonstrate users' willingness to pay for extra privacy protection and personalized features, opening opportunities for clean rooms and Super Apps to thrive. These ecosystems offer challenges and opportunities for brands to rethink brand cultivation and advertising through integrated consumer journey designs.
In today's digital age, trust is currency, and brands must earn it. Brands must not only ensure data accuracy but also demonstrate the value of sharing personal details while safeguarding user privacy at every touchpoint.
A New Age for First-Party Data: Blueprint for Genuine Interactions
First-party data emerges as a beacon in the ever-changing digital world, offering brands unparalleled insights into user preferences. However, there's a delicate balance between personalization and privacy.
Brands must walk the tightrope between personalization and privacy, as consumers are increasingly wary of where their online data goes. Brands need to show the value of sharing, be upfront, obtain genuine consent, and guarantee data protection.
Simply accumulating first-party data is insufficient. Brands should invest in understanding these insights, heralding an era of genuine, reciprocal conversations with consumers. With the help of Generative AI and first-party data, brands can create highly personalized experiences.
Recent cases from Mondelez, Nestlé, and Virgin Voyages only scratch the surface of this intriguing area to watch. Many brands are curating experiences that deeply resonate on a personal level, departing from generic communications to engage in true dialogue.
Building Bridges in a Data-Driven World
In our era marked by data breaches and privacy concerns, brands face the daunting task of rebuilding trust. Modern consumers demand a voice in how their data is curated and used. Trust has become a priority for brands like Amazon, Dove, and Visa, which are among the 10 most trusted brands in 2023 due to their transparency, creativity, and innovation.
This is especially important for consumers who grew up in the age of the Internet and have been exposed to misinformation, economic uncertainty, societal shifts, and branding overload. They seek tangible benefits and value exchange from data sharing.
For brands, the perceived value of data, increasing data literacy, and technological advancements are redefining what it means to be "data driven." By the 2030s, leveraging data in advertising will be the norm, with brands emphasizing mutual benefits taking the lead.
Charting the Course for Digital Identity's Tomorrow
At this crossroads, we are pioneering a new era where data and respect converge. Brands not only exist but empower. This vast challenge also presents limitless opportunities, calling upon brands to ascend, innovate, and resonate with authenticity. The story is about innovating and envisioning a world where consumer trust forms the foundation, and data becomes a tool for genuine human connection. Our rallying cry is to reinvent brand-building, advocate transparency, and establish mutual respect and growth.
To find out more about the future of advertising, read dentsu’s 2024 Media Trends report “The Pace of Progress’’