Digital advertising is fundamentally changing, making first-party data more important than ever. With the phasing out of third-party data used for targeting and buying ad space across digital media properties and the increased recognition of the value of first-party data, retailers are acutely aware of its potential. In this post, I will briefly explain what first-party data is, its importance for retailers, how they can leverage it and why it plays a key role in building retail media networks or similar company-owned media networks that can be used to market ad space to its partners and customers.

What is first-party data and why is it important for retailers?

First-party data is information that companies collect directly from their customers without intermediaries. It includes information on purchasing habits, browsing history and website interactions, as well as names, addresses, e-mail addresses, customer phone numbers, and other details. Unlike data obtained through third-party cookies or third-party providers, first-party data is collected directly from customers, either through the use of merchants’ online media or through online transactions, website registrations or other forms of digital interactions with online media users.

First-party data enables businesses to gain deeper insights into their customers’ behavior and preferences; optimize their marketing activities for maximum effectiveness; manage inventory more efficiently based on accurate data about customer demand; predict trends and adapt their marketing strategies in real time.

The hidden use value of first-party data in marketing

In practice, retailers are already reaping numerous benefits from collecting and using first-party data. They can use it to improve their digital communication and advertising while also adapting to the new rules of engagement in the digital media system. I will go over some of the key competitive advantages that I believe are necessary for maintaining a digital presence in the retail industry.

1. Improved personalization of communication: First-party data allows retailers to adapt their communications or advertising to meet the specific needs and preferences of each individual customer. As a result, customers receive more relevant offers, and businesses see higher conversion rates.
2. Protecting customer privacy: Amid rising consumer privacy concerns, first-party data ensures that companies meet these demands by obtaining explicit user consent to process first-party data. This approach still allows for a sufficiently personalized experience if the user has expressed an interest.
3. Independence from third-party cookies and targeted advertising: As third-party cookies will be phased out by 2025, first-party data provides a sustainable source of information for companies’ (first-party) marketing strategies and an excellent tool for targeted advertising, even amidst changing online dynamics.
4. Agile market research: First-party data allows retailers to conduct small-scale market research to gain fast and accurate insights into media consumption habits and responses to marketing campaigns. This provides retailers with first insights into the analysis of their marketing efforts at minimal cost and quickly adapt their strategies based on real data.

The role of first-party data in building proprietary media networks

Retail media networks allow retailers and other businesses to create their own programmatic advertising networks using their first-party data. They can then sell ad space to advertisers who want to reach their buyers, customers or specific buyer or customer segments.

First-party data serves as the cornerstone of a retail media advertising platform, paying a key role in audience targeting and segmentation, content and offer optimization, improving advertising effectiveness and ultimately monetizing such platform. One notable detail is that in 2024, advertisers intend to allocate one fifth of their digital advertising budgets in this form of advertising, which represents a new revenue stream for retailers and other companies handling first-party data.

Ljubljana Airport Fly is an example of how to monetize your media network successfully

The Ljubljana Airport Fly platform, which iPROM has integrated into Fraport Slovenija’s operations, serves as an excellent example of how leveraging first-party data can lead to marketing success. We used the Ljubljana Airport Fly platform to build an advertising network for Fraport Slovenija that enables programmatic buying of ad space in digital media using Ljubljana Airport’s first-party data.

This innovative approach empowers Fraport Slovenija to provide advertisers with precise audience targeting, particularly those with high purchase intent in the tourism services sector. As a result, Fraport Slovenija now oversees one of the largest tourism advertising platforms in the region. With the latest approaches that use artificial intelligence in the field of advertising technology solutions, Fraport’s advertising platform is being continuously improved and is capable of optimizing advertising strategies independently, which is key to optimizing investments in buying ad space or improving ROAS.

Ljubljana Airport Fly’s innovative features recognized by international industry experts

The multi-award-winning Ljubljana Airport Fly platform clinched the DIGGIT Grand Prize and the Websi Award. It also emerged as a finalist in the international Digital Communication Awards and garnered international acclaim from the jury of the prestigious Digiday Europe award. The project was a finalist in the Best First-Party Data Strategy and Best Use of Data categories.

These industry awards also serve as proof that this is one of the most innovative practices in the advertising technology industry. It sets new standards in the media industry and opens the door to the media market for new businesses that have not previously been able to generate revenue from selling advertising space.

First-party data is the foundation for marketing and advertising activities in the evolving media landscape and is becoming increasingly important. It enables advertisers to make their advertising strategies more targeted, more effective and tailored to the needs of today’s consumers.

It allows companies and organizations to build their own advertising platforms to effectively market their media capabilities and generate new revenue streams as a result. By leveraging their own first-party data, businesses can offer their customers or advertisers a superior Return on Investment (ROI) for their advertising campaigns compared to traditional online advertising channels and platforms. Please let me know if there is anything I can clarify for you or if you have any questions. Please contact me via email at milos.susa@iprom.si.