First-party data refers to the information that retailers collect about their customers and their interactions with the retailer. This data can be used for a variety of purposes, including advertising and marketing. Retailers can use first-party data to create targeted ads that are more likely to be seen and clicked on by potential customers. Additionally, retailers can use first-party data to segment their customer base and create personalized marketing campaigns.
The digital age is shifting the winds in advertising as data becomes the new oil. Walmart, one of the largest global retailers with over 240 million weekly shoppers, reports that it earned $2.1 billion in advertising revenues last year. That is just one example of consumer-facing companies that are turning the tables to disrupt the advertising supply chain. Inspired by Amazon, who booked $31 billion in ad revenue in 2021, retailers are leveraging not just their presence and focus with consumers, but the first-party data that they generate, to command an advertising premium from major consumer brands.
The old adage that says half of your advertising dollars are wasted, you just don’t know which half, is fading away as retailers deliver data to consumer brands that was previous unobtainable without extensive research. Retailers now collect rich data on their customers, and can plot a consumer’s shopping path as they arrive at their purchase decision.
“Retail media networks are taking ‘adland’ by storm, because they’re finally able to give marketers the holy grail – insights and access to high quality, first-party data that tells them about how their customers are actually making decisions to buy a product or a service,” says Michael Kassan, founder and CEO, MediaLink, and expert on digital and advisor to marketers and media companies across the value chain. “At a time when more safeguards are put into place to protect consumers’ privacy within the walled gardens, retail media networks offer a rare opportunity for marketers to get a peek into the customer journey and provide messaging that’s both beneficial and unintrusive.”
Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group
