The foundations of the new first-party data currency

The solution? A robust first-party data graph. This isn't just a technical overhaul—it's a shift in mindset aimed at nurturing direct relationships with your audience and leveraging the data they willingly provide.

What is a First-Party Data Graph?

 A first-party data graph is a rich user profile constructed from data directly collected from your audience. Unlike third-party data, which you acquire from external sources, first-party data gives you more control, ensuring precision in audience targeting.

Key elements: 

• Privacy Compliance: With regulations like GDPR and CCPA, it’s crucial to have a compliant data collection method.
• Quality: The data is more accurate and relevant, as it comes directly from the source.
• Control: A first-party graph allows you to be in control of your data and your destiny. Your graph will help you create hyper-personalized experiences, better targeting, and create new revenue streams from this data without paying tolls or taxes to third parties.

 Steps to Build a First-Party Data Graph

1. Define Objectives and Metrics. Start by understanding what you want to achieve. Are you looking to improve user engagement? Drive subscriptions? Understand your audience better for advertising? Improve ad yield? The objectives will guide the KPIs you’ll track.
2. Select Data Points Wisely. Identify which data points are crucial for your business objectives. Less is more here—collect only what is necessary.
3. User Consent. Be transparent with your users. Use opt-in prompts to collect data and ensure your sites comply with privacy laws.
4. Data Collection. Use tools and platforms that align with your data strategy, ensuring seamless collection and storage. 
5. Data Normalization. Before feeding the data into your graph, it must be normalized to ensure consistency.
6. Management and Analysis. Analyze data regularly to derive insights. Make data-driven adjustments to your strategies accordingly.
7. The New Monetization. With the shift to first-party data, there are new revenue opportunities. A rich first-party data graph allows for better ad targeting, subscription models, and direct partnerships. This graph can also be leveraged to drive new streams of revenue you haven’t thought of today.

These seven steps above are essential; however, they fail to mention the HOW. With publishers primarily focused on developing great content and building a relationship with their readers, only some have the technical expertise, capital, and scale to do this alone. 

What resources are needed for a first-party data graph?

Technology Systems

• Consent Management–to ensure privacy compliance
• DMP or CDP - to organize and store your data
• Integration with up to twenty-five different Universal ID companies
• Integration with SSPs to absorb 1P data
• Reporting/analytics/data visualization

Each of these requires some level of expertise and other technical resources. For most publishers, there is a combination of outsourced products, services & tools combined with key technologies that are entirely under the publisher’s control.  

More and more existing adtech companies offer some or all of these tools with varying pricing models, capabilities, and expertise. The primary types of companies providing these services are DMPs, SSPs, and Header Bidding management companies.  

Here are some examples:

• DMPs (Permutive, Audigent, Lotame)
• SSPs (Magnite/Carbon, Pubmatic–Identity Hub, Open Audience (OpenX))
• Header Bidding/Monetization Partners,(AdApex, Assertive Yield, Freestar, Hashtag Labs, Playwire)

All these companies are entering this space to make money, but they come at the problem from very different perspectives.

DMPs 

DMPs have traditionally made money by tracking users across millions of page visits and placing users into contextual segments (e.g., SUV intenders, music enthusiasts, in-market boots, etc.). DMPs are deploying new tools for minting and reading their UIDs. Some, like Audigent, use their expertise to build, sell, and deliver PMPs across all their publishers. Others, like Lotame, are creating their segments utilizing their Panorama ID instead of the third-party cookie. 

SSPs

SSPs are moving in a variety of different directions. Many have their own Header Bidder Wrapper available to publishers. They tend to be the lowest-cost providers of these monetization activities but make money by leveraging their position on the page to win more auctions, thereby generating more money. Others, like OpenX and Xandr, are aggressively pursuing leveraging their IDs and traffic to build custom PMPs and other targeting capabilities.  Finally, others, like Pubmatic’s Identity Hub, are offering to help deliver UIDs to all SSPs in exchange for improving their relationship with publishers. In order for a publisher to start this process, they first must choose whether they’re going to run or outsource the core technology.

Monetization Partners

These companies traditionally focussed on providing a robust prebid solution, and their technologies are layered on top to help publishers optimize their impression value. The essential “header bidding management” has become relatively commoditized, and this sector is expanding its offering to publishers. Some companies (e.g., Assertive Yield, HashTag Labs, Audigent, etc.) are offering a self-serve option vs. the traditionally managed service offering (e.g., Freestar, Raptive, AdApex, etc.).  However, all are enhancing their technology capabilities.  Some of these partners have begun to offer tools and services to help publishers build their first-party graphs and leverage the associated data. 

As the industry pivots from the use of privacy leaking third-party data to publisher-owned first-party data, smart publishers and the vendors that serve them know that first-party data graphs are table stakes. And these data graphs aren't just a tech upgrade; they're a strategic move to better understand and serve your audience directly while protecting yourself from the deprecation of the third-party cookie. In the next post, we will get into the details of how to build the asset and work with partners to accelerate the asset’s value. Stay tuned