In an ideal world, effective ad targeting would be easy: get some accurate and complete profile data, put it into segments, and use it across channels and devices to reach the right person at the right time with relevant, personalized ads. Most marketers would agree that the concept is simple enough, but knowing the theory behind data-powered ad targeting versus effectively putting it into practice can mean two very different things.

As big data gets bigger and increasingly commoditized, more confusion clouds the market about what constitutes “accurate” consumer data. Where should it come from? What are acceptable ways to collect and use it? How do we define accuracy? The line between quality and quantity, first-party and third-party, becomes murkier by the day, and the integrity of first-party data is jeopardized in the process.

For the sake of targeted ad campaigns everywhere, it’s time to clear the air about first-party data and what it is, what it isn’t, why it’s so hard to come by, and—most importantly—why it’s worth it.

We’re exploring these questions in a two-part series here on the blog, so stay tuned as the rest of the conversation unfolds next week!

Cracking the Code to Better Data

No matter how you spin it, successful ad targeting is impossible without accurate information about your audience. To be true to its name, “accurate and complete profile data” can only come from one place: a company who is collecting that data directly from its consumers, typically through registration forms, purchase behaviors, and other activities performed within that organization’s owned and operated sites and apps. This type of information—called first-party data—is obtained via legitimate collection methods and is therefore authentic, clean, and true.

Everyone claims to have first-party data, but the current standard for “accurate” targeting methodology is often from the use of third-party data, information collected by a business entity (a “third-party”) that does not have a direct relationship with the people whom the profiles are based upon. Third-party data ­­not thousands, of demographic and behavioral data points. Because it’s simple to access, third-party data is cheap and widely available—everybody is using it. If you’re Ford and you’re buying third-party data, you’re just doing everything that all the other automotive companies are already doing. It’s not unique. But it’s easy.

Cracking the code to first-party data, on the other hand, demands that CMOs and marketers adopt an entirely new way of thinking. Planning an ad campaign around known customer data blurs the line between marketing and technology, requiring a people-based approach quite different from traditional retargeting or third-party data buying. Scaling that data into an impactful, ROI-boosting campaign is an entirely other hurdle, but it’s well worth the effort.

When companies take on the challenge of harnessing first-party data, the results are incredible. We’ve seen Facebook turn social media into the gold standard for ad products, Amazon become a retargeting powerhouse, and Twitter drastically scale its targeting capabilities. These companies collect, scrub, and map out their real consumer data, and they are confident that other companies will want to buy it—spend billions of dollars on it, in fact.

Turns out, they are right.

Check out next week’s post for a deeper dive on the Perks of First-Party Data.