Dive Brief:

• Forty-one percent of marketers say digital media activation will be the area most impacted due to the rise of privacy-related data restrictions, per Merkle's 2021 Customer Engagement Report that was emailed to Marketing Dive. In addition, web analytics (39%), digital media measurement (35%) and direct marketing activation (35%), among other areas, are expected to be impacted.
• With that in mind, 52% of respondents said their organizations have prioritized digital experiences and/or strategies with the goal of collecting more first-party data. Overall, collecting and storing first-party data over the next six to 12 months is a high (58%) or even the highest priority (30%) among marketers.
• While first-party data is at the top of the agenda for marketers in 2021, the report also points to the need for marketers to increase the acquisition of zero-party data, which is "intentionally and proactively" shared by consumers with a company, and second-party data, which is shared by partner companies, alliances and consortiums.

Dive Insight:

Merkle's 2021 Customer Engagement Report is the latest study to suggest that the collection of first-party data will be a high priority for marketers in 2021 as privacy-related data restrictions continue to expand. These restrictions include the end of third-party cookies, changes to identifiers like Apple's Identifier for Advertisers (IDFA), and regulations including the EU's Global Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA) and California's Prop 24 that passed last year.

While much attention has been placed on first-party data amid the deprecation of third-party cookies, zero-party data — including "transaction intentions, preference data, personal context, and what the customer thinks about the company" — will also become increasingly important, according to Merkle.

"Marketers don't have to infer customer preferences or behavior through secondary behavior but are instead explicitly told, straight from the source. The best zero-party data is when the customers trust the brand and are willing to volunteer their data with the understanding that it will improve their experience," per the report.

Also on the rise is second-party data, which includes data shared via non-competitive partnerships, like a Buick tie-up with Amazon that sought to promote both the car brand and Amazon's Alexa. Second-party data is also shared via retail media networks, which continue to proliferate among retailers, including Walmart, Best Buy, CVS Pharmacy, Kroger, Target and Walgreens. These networks help marketers tap the data that retailers collect about consumers when they are close to making a purchase.

The report also finds that more than half of marketers are utilizing digital experiences and strategies to collect first-party data, ahead of tech solutions like identity resolution (36%) and omnichannel orchestration tech like a customer data platform (26%). This has been the case for CPG marketers, which are attempting a variety of experiments to collect first-party data, like Mtn Dew's recent "direct-to-gamer" offering.

Merkle's report suggests walled gardens like Facebook and Google will become even more important for marketers but also expects a growing role for a variety of addressable marketplaces and partners, including some new options that are likely to emerge.

Contextual targeting is another area that could see a surge in interest, despite its reputation as a less reliable method of targeting. The report points to Google's privacy sandbox program as one example of interest-based advertising.

While more than half of marketers (59%) have a clear understanding of the specific challenges the changing data privacy landscape presents, a previous study by the IAB found that 41% of ad buyers didn't know if their stakeholders understand the ramifications of third-party cookies' demise and the changes to identifiers, suggesting that the road ahead could be a bumpy one.