Introduction
In an era where data privacy has grown into a critical concern, the ability for marketers to effectively leverage third-party data has significantly diminished. This, coupled with the obsolescence of third-party cookies, has prompted a change in the marketing landscape, leading marketers to explore data partnership opportunities with retailers and other potential allies.
Retailers, for their part, have been aggressively fortifying their data offerings, hoping to capitalise on the expanding retail media space. Robust customer data, amassed through initiatives such as the Tesco Clubcard and other aggressive loyalty schemes, are now up for offer to brands.
The Opportunity
Data partnerships provide brands with a more profound understanding of their audiences, elucidating the individuals who buy their products or those of their competitors. This vital information can power targeting efforts, leading to more effective marketing campaigns. More importantly, data partnerships can yield measurable results, helping brands understand the influence of their marketing investment on driving incremental sales. This insight is particularly invaluable for brands that do not have direct relationships with their end customers or do not own point of sale data.
The Challenge
Despite the obvious benefits, forming data partnerships can be resource-intensive and time-consuming. It requires extensive collaboration across multiple functions from both parties, aiming to forge relationships that are commercially beneficial, and that align with consumer expectation and experience. Given the high demand for such partnerships, building a competitive advantage can be both a necessity and a risk to resource allocation. Moreover, partners may be at different stages of their own maturity and may require additional support to seize opportunities, further draining resources.
A Framework For Assessing Opportunities
At LEAD Consulting, we advise clients to evaluate partnership opportunities through three core dimensions to comprehend both the opportunity and understand the resource commitment needed to seize these opportunities.
- Capability: This dimension is about understanding the partner’s abilities in fostering data partnerships. Brands must delve into the people, processes, and technology that potential partners have at their disposal. They must review case studies, proof points, and clearly define the roadmap for enhancing these capabilities.
- Appetite: This dimension is designed to gauge how committed a partner is to building a data partnership. Brands should examine existing relationships and consider whether forming strategic partnerships to advance data capabilities is a viable option. They should also understand who else potential partners are working with and where they stand in the priority queue.
- Scale: This last dimension can help brands ascertain the magnitude of the opportunities at hand. Brands should consider the size of the potential partner’s audience and assess the volume and sophistication of their existing data capabilities.
These dimensions can help brands not only evaluate partnership opportunities but also identify the appropriate value exchange they can strike with partners. For some, this could be a remuneration for data, while for others, it could be establishing joint business partnerships to evolve capabilities in a strategic partnership.
Embracing these guidelines and forming strategic data partnerships can propel brands to new heights, helping them to understand and engage their audiences more effectively than ever before.
