‘We’re still in the infancy of it’: How first-party data is shoring up for marketers as third-party cookie deprecation starts

“Because of the privacy laws and everything that’s going on with AI, we believe that brands will operate as ecosystems — their own walled gardens, if you will — and take the control back from the Google and Meta duopoly, and take that control with first-party data into their own ecosystems,” said Pat Goggin, partner and CEO, Morning Walk marketing agency. 

At this point, data is one of the most valuable assets a client can own, Goggin added, and some marketers are looking to cash in, fueling the retail media arms race between retailers like Walmart, Target and most recently, Wawa convenience store. This year, retail media is expected to make up one-fifth of digital ad spend worldwide, according to eMarketer.

For example, Morning Walk is currently working with Boss Snowplow, a snowplow and ice control company, on a digital data transformation, starting conversations with the agency about how customer insights can be leveraged not just in its own ecosystem but potentially sold to interested brands or advertisers. Boss hasn’t inked any deals officially, per the agency.

As more conversations around data sharing happen, brands and their agency partners need to be mindful of compliance. Morning Walk is also in early talks with clients about clean rooms, how brands and other data partners can be privacy compliant in sharing and co-opting first-party data. It’s a place they’re keeping an eye on, but nothing is active yet, per the agency.

The data race

Meanwhile, other brands are working to hoover up as much data as they can, to create a big enough database to make up for the impending signal loss.

Josh Cellars wine is “actively trying to explode our first-party data collection,” said Dan Kleinman, chief brand officer of Deutsch Family Wine & Spirits, which owns Josh Cellars wine brand, in response to a question about Google’s crumbling third-party cookie. 

At present, the company is spending “in the seven-figure range” on consumer insight and understanding, he added without offering a specific dollar amount. The wine brand is leveraging its mailing list, collecting first-party data at brand initiatives and generation campaigns on Meta. As the third-party cookie comes to an end, there are plays to marry that first-party data with third-party data for better targeting, per Kleinman. 

“This is something we plan to do eventually, layering in [first-party] data, [third-party] data, interest/demographics targeting across platforms and lookalike audiences for media targeting,” he said in an email. 

Online baby registry company Babylist launched its own in-house content studio The Push in 2022, recently building out media and retail business to offer content, like email or TikTok videos, and paid placements on the Babylist website to both endemic and non-endemic advertisers. The company’s media revenue grew almost 50% year-over-year in 2023 and is beating its predictions for 2024, said Lee Anne Grant, chief growth officer of Babylist. Notably, that growth comes at a time when advertisers are looking for alternative performance channels. She did not disclose specific dollar amounts. 

“That is partly due to Babylist’s growth, but partly due to advertisers realizing, ‘If I want to target this audience, I need to go directly to a platform that has that audience’,” Grant said. While other retailers look to scale their customer insights to vacuum up more ad dollars, Babylist is not. It’s what Grant calls a “purposefully closed ecosystem” focused less on soliciting to advertisers and more on using that data internally to prove the value of its ecosystem to interested brands and advertisers.

Does retail media win out?

There’s a growing grievance among agency executives that the growth of retail media is causing an increasingly fragmented marketplace, where they’re tasked with divvying up client ad dollars and tracking KPIs across various retail media networks.

Google and Meta’s dominance in the digital ad marketplace “made it affordable for advertisers to come in and use their walled gardens, and rent their audiences,” said Goggin. Now, agency execs are tasked with reconsidering that investment. 

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“What’s happening now is we need to take that money that was invested there and invest it in the brand to build emotional connections and trust. And then to invest in performance, to drive conversions,” he said. “But a lot of that is going to be within our own ecosystems versus renting the ecosystems of these major duopolies that essentially took over 60 to 70% of all advertising.”

While Google’s cookie deprecation timeline has been constantly changing for the last few years, agencies and their brand clients have spent that time building up their own datasets and working with ad-tech partners to fill the gap.

“Google is going to be the biggest dent in this. But so far, things have been fine with the deprecation piece when it comes to tech solutions putting together their cookieless things,” said Steven Wroblewski, vp of analytics and CRM (customer relationship management), at Morning Walk, “but we’re still in the infancy of it.”