In the early days of programmatic, the words “offline data” carried a negative connotation.
Anything that wasn’t derived from online sources and therefore had to be onboarded before it was then matched to cookies was met with dismissal.
The conventional wisdom was, if you were buying digital media programmatically you needed real time, intent data collected online at the cookie level, not offline data that was perceived as stale and dated.
Recent shifts in browser policy have made that line of thinking unsustainable – if cookies can’t be used to collect data, then where are marketers going to get the best signals for targeting?
Data derived from actions taken in the real world–purchase, mover, auto buyer, location, ownership, surveys, and first-party customer data—has suddenly become that much more appealing.
Some of the “offline” data available in the early days was junk, built on top of weak signals. But that’s changed dramatically with improvements in collection, ID graphs, data science and vastly improved onboarding capabilities.
Advertisers that still think of this real-world data as inconvenient or ineffective are about to find that they need offline data more than ever before.
Decisions by Chrome, Safari and Firefox to make cookies less effective is pushing advertisers to look for data sources that aren’t cookie dependent, which should rapidly lead online advertisers to an increased dependency on offline data.
In many ways, the industry is now hamstrung from an over reliance on cookie-based data.
In the early days, it was labor intensive to onboard offline data and then match it back to a targeting cookie in order to deliver an ad message.
In the process, advertisers would start with an offline data set that deterministically knew consumers and their behaviors, and then force it into a weaker probabilistic match so that it matched to a cookie-based audience with enough scale.
Essentially, advertisers would dilute the quality of the data in order to get a higher match rate with a cookie to achieve a reasonable sized audience. Quantity was prioritized over quality.
Now that advertisers are scrambling, it’s clear that the cookie wasn’t the best choice. After all, cookies were not designed for ad-tech, they were just the most convenient mechanism at the time.
The good news is that even though data derived from cookies will be in short supply, data sourced from real people, and how they behave offline, isn’t going to decrease.
The industry learned how to match this data to cookies, so it will find ways to match it to whatever kind of identifier replaces the cookie. There was always a need for an alternative to the cookie, and there are currently several promising solutions on the table.
The need to act is coming much sooner than many had planned.
This evolution should ultimately be a positive for marketers, because it will finally push them all away from outdated KPIs.
Another key reason that offline data wasn’t popular in the early days of programmatic was that it didn’t translate seamlessly to how advertising was measured, which was with click-through rate.
Advertisers valued data that would help them drive consumers to see an ad and click to another page.
As a result, browsing behavior became the most relied-upon data signal, because it could influence further browsing. Offline data, meanwhile, was often derived from actual purchase data, and wasn’t as useful for driving browsing via clicks.
As time has gone on, the industry has shifted, and most brands have moved away from CTR to measure their campaigns. Still many look at conversions for direct response campaigns or audience reach for branding, rather than digging in to understand if they reached audiences that purchased and have a high customer lifetime value.
To be clear, there is value in online cookie-based data. It’s fresh data, which is great for identifying in-market audiences. The other side of that is that it has a limited shelf life. Real world action data, however, has more long-term value, in that it can help identify future purchases and brand affinities.
Someone who recently moved might need home improvement products, major appliances, paint, furniture, and other items to fill a home.
A consumer who bought a Nike product may buy Nike again, look at products that are similar to Nike, or purchase additional apparel or products to go along with the new sneakers they just bought, even if they are not displaying in-market activity right now.
This data is incredibly valuable, and can be used to develop media plans and audience buying strategies that can be put into use for months to come, as opposed to quick-twitch campaigns built around browsing data, where consumers cycle in and out of audience pools rapidly.
It’s much easier to onboard offline data, as LiveRamp, Neustar and others offer the service. But as onboarding has improved, a funny thing has happened. The concept of a granular, targetable audiences is no longer confined to the internet.
Audience-first has become the dominant marketing strategy across channels, so marketers are evolving their thinking to a people-based, multichannel approach for branding and acquisition. Every media format is now data-driven, ranging from out-of-home to direct mail to addressable TV.
These formats, some of which have been in use for decades, aren’t strictly reliant on cookies, nor have they ever been. Advertisers can’t push cookie audiences to their CRM, or do direct mail with cookies, nor can they deliver targeted TV ads.
As brands shift their focus toward buying behavior and value-driven metrics, it only makes sense that they’d pursue data sources that can be used across multiple touchpoints in this era of multi-channel marketing.
As advertisers continue to find the path forward in a world without cookies, many will come to see that they’ve been ignoring valuable offline data signals for years, partly out of convenience, and partly out of ignorance.
Data that powered the ad industry throughout the pre-programmatic years is going to come back into vogue, especially for those that see the value of emphasizing buying behavior over browsing.
Chris Morse, is director of digital partnerships at Alliant, the audience data company, and is regularly advising brands of all kinds how to best approach audience strategies and think about changes in the data market to better get in touch with their target customers.
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