How retail membership programs harness first-party data for advertisers

With third-party cookies on the way out, marketers are leaning more heavily on first-party data to help power their digital advertising strategies. Retailers that want to increase their share of ad dollars should leverage customer data to help advertisers enhance campaign performance via measurement and attribution capabilities.

Here are five charts that highlight the importance of first-party data in digital advertising and how retailers can use membership programs to build out their first-party data collection.

1. First-party data is critical to marketers

Advertisers’ reliance on first-party data will only increase as third-party cookies deprecate and advertisers require privacy-compliant ways to collect and validate customer insights, create more relevant campaigns, segment audiences, and measure campaign effectiveness.

Over three-quarters (77.0%) of US marketing and advertising professionals use first-party data as a cookieless solution, according to November 2023 data from Basis Technologies. Another 14.7% say they plan to begin using first-party data to supplement third-party cookie loss within the next 12 months.

2. Membership programs provide data, revenues for retailers

Because membership programs require customers to opt-in, they may be more comfortable sharing data beyond purchase history, like communication or product preferences.

Over half (57%) of US adults are members of Amazon Prime, according to our April 2024 survey conducted by Bizrate Insights. About a quarter (24%) of adults belong to Walmart+, followed by Costco Wholesale’s membership program (23%) and Sam’s Club (21%.)

Over a fifth (21%) of consumers don’t belong to any of the membership programs listed, suggesting there’s lots of room for growth.

3. Retail media networks can use data to enhance campaign measurement and attribution

Half of marketing professionals worldwide say that measurement and attribution capabilities are most critical to them, according to November 2023 data from Mediaocean. Without access to the right data and analytics solutions, this can be difficult to achieve, especially when it comes to connecting online and offline sales.

Retail media networks have an opportunity to leverage the massive amounts of customer data they possess to help advertisers better understand campaign performance across digital and physical channels.

4. Data helps retail media move up the funnel

As the retail media channel evolves, advertisers have begun to explore off-site channels like connected TV (CTV), which will garner $4.19 billion in retail media ad spend in 2024, up 86.6% YoY, per a March 2024 EMARKETER forecast.

Through CTV partnerships, retail media networks enable advertisers to expand their reach and boost brand awareness. First-party data is key here, too, providing more accurate ways to target and measure across off-site channels.

5. Access to customers’ data hinges on keeping them engaged

To ensure first-party data stays fresh, retailers need to keep customers engaged in membership programs by identifying which features or services are most valuable.

As prices for goods and services increased from 2022 to 2023, so did the percentage of US adults that cited discounts as the leading reason they participated in a loyalty or reward program, according to February 2024 data from Merkle. However, the percentage of customers who wanted free products decreased, as did those who wanted access to exclusive rewards.