Oracle recently announced that it’s shutting down its third-party ad business after the division’s revenue plummeted. This decision from a leading technology company indicates a broader industry trend that will soon culminate in the slow phaseout of cookies and the potential end of third-party data. 

Ultimately, this shift is a testament to changing attitudes toward data privacy and the growing importance of first-party data, which will serve as the foundation of the future of digital marketing. Let’s dig into how marketers can ride this wave to thrive in the face of the changing tide.

A new era – the shift from third-party to first-party data

Oracle’s decision to call it quits on third-party advertising signals a paradigm shift in the industry, especially since it’s not the first move of its kind. For instance, in 2020, Apple greatly reduced iOS tracking for advertisers (via IDFA tags, a technology similar to a cookie but for devices) by requiring users to opt-in at the system level. It remains the only way for advertisers to collect user data from iOS apps, but the shift has caused tracking rates to drop significantly. I’m sure other companies will soon follow suit, accelerating the decline of third-party data tracking.

The reasons behind this shift are layered and complex. One that I see as significant is an increase in stringent regulatory pressures ushered in by the GDPR and CCPA. Consumers today expect privacy, but they still want the level of personalization across channels that necessitates a strong data set. Of course, privacy matters, but a lack of tracking makes ads less relevant for consumers and advertising less effective. 

Also Read: A Cookie Crumbles: Digital Advertising’s Uncertain Leap

These concurrent factors reshape how businesses collect and use customer information, with leading companies taking a proactive approach to capture, unify, and activate their first-party data. Additionally, machine learning propensity models will play a larger role. This technology uses data to predict specific outcomes, and marketers can leverage limited pre-purchase data to more effectively target potential customers.

A challenging future – what marketers might face

Marketers reliant on third-party data won’t be able to simply flip a switch and adapt to the change. Imagine losing your glasses in a crowd. One second, every individual is clear and identifiable, and the next, everyone around you is one big blur. Marketers leveraging third-party data once had a clear vision of each audience member, allowing them to personalize campaigns. But without that third-party data, everyone looks the same, existing in broad pools of indistinguishable traffic.

Rather than flying blind, businesses must swiftly adapt to new data collection and activation methods to maintain effective marketing campaigns. The shift from third-party to first-party data, supplemented by propensity models, can’t be treated as a tactical adjustment but rather a strategic overhaul.

Unlocking potential – first-party data as the new gold standard

With major players moving away from third-party advertising, now is prime time for businesses to reimagine their data strategies. First-party data is collected directly from consumers – with consent – through interactions across channels, including websites, apps, and emails. This data is the bedrock of modern digital marketing, providing a goldmine of information about consumer preferences and behaviors and driving true personalization. Propensity models will fill in the gaps and help marketers reach an even wider potential audience.

However, this first-party data is only valuable if teams across the organization can access and use it. Unifying data in a single location – such as a cloud data warehouse – means marketers can access it for more personalized campaigns, and customer success teams can use it for tailored interactions. By embracing first-party data and prioritizing its unification, teams across a company can forge stronger customer relationships and improve business outcomes.

Also Read: Hyper-targeting: The Secret Weapon for Laser-Focused Marketing

First-party data in action

This might all seem daunting, but the good news is that many martech and adtech companies already provide tools that help marketers harness the power of first-party data. These solutions include composable customer data platforms (CDPs), cloud data warehouses, sophisticated analytics, and AI-driven insights. 

For example, cloud data warehouses (like Google BigQuery, Amazon Redshift, and Snowflake) and composable CDPs like GrowthLoop enable marketers to create unified audience segments and orchestrate cross-channel journeys with precision. These innovations and machine learning propensity models help marketers deliver personalized, engaging customer experiences on their terms and timelines.

We’ve helped drive tangible outcomes for brands across industries, including major sports teams like the Boston Red Sox. The organization leveraged Google BigQuery and GrowthLoop to create a unified view of its customer data, enabling it to launch personalized marketing campaigns in hours rather than weeks. This approach allowed the marketing team to target fans more effectively, enhance fan engagement, and significantly improve ticket sales and overall revenue. The Red Sox’s experience demonstrates the power of first-party data and advanced analytics in transforming marketing and sales functions, driving business growth, and boosting customer satisfaction.

Looking ahead – strategies for the first-party revolution

First-party data collection, data unification, AI applications, and the end of third-party data. It’s a complicated web of considerations; any marketer might feel overwhelmed with the choices ahead. Put simply, my advice is:

• Invest in technologies that facilitate the collection and analysis of first-party data.
• Break down existing silos between marketing and data teams, democratizing access to critical customer information.
• Foster transparent and ethical data practices to enhance customer trust.
• Leverage first-party data to create personalized and engaging customer experiences.
• Incorporate machine learning propensity models to better understand the entire customer landscape, driving more precise targeting.

While the transition may be challenging, these steps will ensure that shifting to first-party data will offer long-term advantages to marketing teams and the businesses they support. With these tools in their arsenal, marketers can achieve more effective targeting, higher ROI, and a competitive edge.

Also Read: Google Rethinks Cookie Apocalypse: A New Approach to Online Advertising

Oracle’s decision to shut down its third-party ad business marks a pivotal moment in the advertising industry. Now is the time for marketers to fully embrace first-party data – or be left behind. By leveraging advanced tech solutions like machine learning and adopting transparent, ethical data practices, businesses can thrive in this new era of advertising. The end of third-party data isn’t a setback but a prophecy of a more sustainable, customer-centric future.

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