By Brett Schnittlich, President, Lucid
Research is rooted in science. Science is rooted in observation. And observation is the root of understanding consumers. When we can observe behaviors and patterns, we can market to and resonate with just about anyone.
However, the market research industry is not about selling products; it’s about providing insight and value. As businesses start to think deeper into what the post-pandemic era will look like, more marketers are relying on data analysis to understand how best to reach and relate to today’s preoccupied consumers.
With the death of third-party cookies and new data regulation laws popping into the picture, marketers understand that they need to rely increasingly on first-party data for truly valuable insights. So, how can brands best respond to these fluctuating or nuanced consumer behaviors? First, let’s take a step back and look at the big picture.
Why has first-party data been critical to the research industry for so long?
By looking at the textbook definition of first-party data, you’d see a clear connection with market research. First-party data is data sourced directly from customers. It is collected and owned by the company, through a process that typically takes in a number of different market research tactics in order to aggregate and analyze the data.
First-party data has been critical to the market research industry because it’s coming straight from the source. It allows for accurate, qualitative and relevant insights, which are essential to understanding audiences. In today’s always-on environment, it’s important for us to gauge sentiment straight from the consumers’ mouths (or fingertips).
How can today’s marketers best uncover meaningful insights?
There are two essential elements that must be considered for first-party data to be a success: scale and granularity.
Anyone who has a basic understanding of market research knows that utilizing a large pool of insights is more beneficial than a smaller group. However, it takes a lot of resources to scale first-party data to be a legitimate source. The market research industry relies on various methods of collecting and generating large pools of data, whether through potential consumer interactions or creating and investing in new technology to optimize results. The inevitable fact is, scaling first-party data to be meaningful is an uphill battle that market research knows too well.
Yet, while ratings by large research studies are wide-reaching, they aren’t very granular – and right now granularity is essential. Brands must have a thorough understanding of what their consumers are interested in, what actions they take on a daily basis and other identifying factors that provide more personal insights. Without those identifiers, brands lose the opportunity to connect with consumers in authentic and meaningful ways.
Why do we need both of these elements simultaneously? Because authentic consumer sentiment is more important than ever. Take a look at Amazon; they know what their customers buy and when. Amazon then uses that first-party information to suggest additional purchases and serve ads to those same users on both Amazon-owned properties and the Internet at large. Gated publishers use their first-party information for similar purposes — to serve users relevant content and advertising that will resonate, in theory, allowing for a more “personalized” experience.
How can marketers utilize analytics to improve their bottom line?
The market research industry has evolved in the last few years, and a lot of that is due to the increased usage of first-party data. Collecting real-time data to make real-time decisions is going to make or break marketing plans in the future. If marketers correctly leverage those insights, they can accomplish a multitude of things:
- Optimize media targeting and placements. With consumer sentiment changing as often as every day, purchase behavior will need to be tailored based on those shifts.
- Understand niche buying behaviors across verticals. Are consumers still dying to get their hands on Lysol wipes and toilet paper? Are they finally feeling comfortable enough to fly again and need new luggage?
- Analyze fast-changing consumption patterns. Take a look at industry conversations and then at your data. Is it matching up?
As brands evaluate direct consumer sentiment and closely consider how major happenings in the world are impacting them, it’s important to recognize the similarities and differences between consumer groups. When enacting brand analytics, brands must integrate and aggregate a diverse set of information that will uncover responses that show the diversity of the consumer base.
For instance, McKinsey & Company ran a global study in 12 core countries, from India to Italy, South Africa to the U.S., outlining consumer sentiment facing the “new normal’ in regards to COVID-19. While those 12 countries are diverse across their populations, first-party data and market research helped boil down behaviors to key commonalities. This not only guides brands in their marketing decisions to consumers in those geographies but provides insights across industries for future planning.
Brands cannot wait for the new normal to settle in –– if it ever does –– to effectively reach our consumers. We must reconsider the way we approach first-party data and use it to understand consumers in the moment. It’s the start of a new decade, and it’s time to adopt a new perspective on targeting our consumers in a meaningful way.