In Q4 of last year, Amazon’s advertising business grew at a higher rate than any other segment of its business, netting the tech giant $7.95 billion. The scale of Amazon’s media is staggering and one that many retailers may never reach. However, every company with first-party data can take a page from Amazon’s book in methodically laying the groundwork for becoming a media and data hub. After all, everyone has valuable digital real estate.
I was reminded of this recently when I bought coffee online from a small roaster in Brooklyn. When my purchase was complete, I saw below my order a row of images and links to direct-to-consumer startups that I’d never heard of. I can’t say whether this coffee brand has Amazon-like heights in mind, but it is possible. Just look at Starbucks.
Understanding whether or not your data and channels are of value to others takes time. Each step, however, is necessary to increase the value of your first-party data, build customer intelligence and eventually, kickstart a new revenue stream.
Begin with a first-party data audit
The lifecycle of building a retail media business, no matter the size and scale of your company, is fairly consistent. It starts with looking at your existing first-party data assets and answering some basic questions:
- Where does your data reside?
- What access do you have to your first-party data?
- Are there restrictions on how the data can be used?
- What is the level of segmentation you can offer?
From here, you can see what you have that’s unique, make strategic partnerships and investments to boost customer intelligence and start to imagine the market for your data.
If you build it, will they come?
Perhaps — having valuable data is just step one, though. Even if you have what you believe to be compelling, accurate data assets, there's much more to building a retail media business than having great data.
If your business to date has been purely selling clothing, for example, it’s not as simple as putting your existing sales and marketing team on the task of building and generating interest in your data. You need to bring in a team that’s familiar with media buying and can strategize how you might develop relationships with agencies, holding companies and others in your target audience who would potentially use their data to enrich their customer intelligence.
Find the right technology partner
The most critical component to get right when monetizing data and building an advertising business is finding a technology partner that both understands the intricacies of consumer data and that privacy is not one-size-fits all. At a foundational level, any partner you speak to should be able to engage with your IT, infosec and legal teams to explain how their technology protects consumer privacy while preserving data utility, and allow for configurable privacy controls so you can tailor access based on trust.
A recent Winterberry Group Research report titled Collaborative Data Solutions: The Evolution of Identity in a Privacy-First, Post-Cookie World, surveyed marketing executives across the US and UK underlined trust as a key factor in evaluating data collaboration solutions. Beyond your conversations with technology partners, expect trust to be front and center in your sales calls as well. With heightened awareness of consumer privacy concerns, savvy brands know that transparency and choice in consumer data collection and use is a new way to create differentiation and value with the emerging and highly valuable cohort dubbed “privacy actives.”
Spring cleaning your data is a good thing
No matter where your organization is on the journey to building an advertising business, the discoveries you’ll make along the way are worth uncovering. If you find gaps in your data assets that don’t make them attractive to others just yet, you can start enriching your first-party data to better understand your own audiences. If you systematically improve access to customer intelligence, you’ll safeguard your abilities to understand your target audience and build direct relationships with them.
With time, you’ll see that you’ve not only laid the foundation for a new revenue stream, but also fundamentally improved how you approach your core business.
via https://www.aiupnow.com
Alice Stratton, Khareem Sudlow
