First-party data is data that your company has collected directly from your audience — made up of data you collect from your websites, applications, social media platforms, CRM, surveys, product reviews, and more (Bernazzani, 2021).
First-party data includes:
- Basic information: name, email, address
- Demographic information: age, gender, income, employment
- Tracked information: content downloads, comments, visited websites
- Email marketing lists, Loyalty program data, Newsletter subscriber data.
- eCommerce data such as sales and customer behavior.
First-party data is the most relevant and precise data. A close connection between the company and the accurate data source dramatically reduces the possibility of errors. Asking your customers for consent and informing them how you intend to use it can help forge stronger relationships. By collecting your first-party data, you control the quality and accuracy of the information that comes your way.
Data Collection: First vs.Third
First-party data is used for audience retargeting via advertisements, nurturing, and sales. It has been used to learn more about what an ideal or best-fit customer looks like, how to reach out to new audiences, and how to close those sites or social media visitors familiar with your brand who might become future customers.
First-party data is collected by adding a pixel to your website, product, or social media profiles to collect information about behaviors and actions and record it within your CRM or CDP. The business can collect that data whenever a visitor lands on or clicks your website, looks at your products, engages with a social media post, or fills out a survey.
Third-party data is often collected, aggregated, and sold to companies to help them build effective advertising and retargeting strategies. Using your time and resources to collect first-party data about your customers and site visitors is better to help inform your strategy and get better results.
Third-party data is collected and distributed in the same format as first and second-party data. Independent researchers use surveys, interviews, and feedback forms to gather information about a large audience. Then, like second-party data, organizations can purchase this information.
However, the difference is that most third-party research is conducted on random sample sizes. Unlike first-party data, where the information is derived from your customers, third-party data surveys anybody willing to fill out the form. Third-party data should be used as a complement to your first-party data. Collecting first-party data does not require a go-between, so you do not need to purchase it from other parties. It is the least expensive and accurate data option compared to second and third-party data because you gather it directly from your customers (Bernazzani, 2021).
The Cookie Clock
Consumer privacy regulations are shifting. Soon brands and advertisers will have lost access to the cookies they have traditionally relied upon to shape their marketing campaigns. Third-party cookies are rapidly dying, driven by Chrome’s decision to end support, and new privacy laws’ consent requirements continue to change. The California Privacy Rights Act (CPRA or CCPA) was passed, joining the existing General Data Protection Regulation (GDPR) in the European Union. As a result, consumer targeting methods are evolving.
When asked what kind of customer data their marketing strategy currently relies upon, 81% of companies said that at least half of their data was third-party. Meanwhile, 85% of consumers want brands to use only first-party data when delivering the kind of personalized experiences they now expect (O’Connor, 2022).
Companies need to prepare quickly for these upcoming changes.
The deprecation of cookies will cause even more difficulty for brands that rely on such cookies to identify and track visitors to their websites. More than half (55%) of companies say they are not fully prepared for a cookieless world, and 42% of companies predict that the impending changes will lead to a lower return on investment on their marketing spending (O’Connor, 2022).
With the demise of third-party cookies and re-evaluating customer habits post-pandemic, this is the perfect opportunity to close gaps in consumer insights and understand how to build a data strategy to deliver meaningful experiences.
While marketers technically have time until third-cookies disappear, those who are proactive in seizing the opportunity of first-party data will get a head start on shifting strategies and tackling challenges.
Shifting to First-Party
In 2022, marketers cannot stop adjusting, and brands must adapt to the new conditions to acquire customer data.
- Shifting your focus from third-party to first-party data acquisition
- Personalizing your acquisition tactics based on the traffic source
- Differentiating your offers based on customer behavior
- Expanding your list of engaged email and SMS subscribers
Organizations will need to again rely more heavily on first-party data for their measurement solutions. They will also need to adapt their measurement strategies to look at data differently as the signals marketing can accurately track and measure changes (Hansen, 2022).
When it comes to privacy and personalization, consumers want to have their cake and eat it too. To serve the needs and wants of their customers, brands must evolve with the help of modern technology that can rapidly adapt to the market.
By connecting all marketing touchpoints using a variety of methodologies and sources, we continue to provide the most accurate and comprehensive path to conversion.
What do we do?
Personalization has emerged as one of the most critical aspects of delivering a competitive brand experience to attract customers and brand loyalty. The consequences of not providing personalized experiences to customers can be severe, with nearly two-thirds of consumers saying they will stop using a brand if it does not personalize their experience (Twillo, 2022).
For instance, most companies (88%) surveyed believe personalization is critical to their customer engagement strategy. Nevertheless, 75% of companies claim to provide good or excellent personalization to customers, and consumers (52%) disagree, reporting bad, poor, or average personalization (Twillo, 2022).
We need to continue to invest in deepening those relationships and building loyalty with customers. We are starting to see a shift in bringing marketing and the customer directly together with the adoption of social media. It is time to focus on improving the customer’s experience and building relationships.
We can make the customer experience more personable by adequately utilizing and studying the available data. Gathering and understanding customer data is an essential step in the marketing process. Marketers must fully understand our customers to put the right message in front of the right customer at the right time to influence action.
Using First-Party Data
First-party data comes from various systems, including CRM, website analytics, product usage, and the company’s knowledge database. One attribute these data sources have is enabling brands to know their customers better. By utilizing the insight from all data points combined, brands can build a comprehensive 360-degree view of the customer.
As the primary source to build and deliver personalized experiences to consumers, first-party data is a powerful tool that can drive contextual personalization by capturing the context of the shopper’s current intent. The on-site shopper journey can be insightful and a glimpse into a customer’s psyche, from what they clicked on and added to their basket to how long their mouse stayed on certain products (Ryzha, 2022).
By establishing an approach for sourcing and analyzing first-party data, marketers will have the insights needed to deliver more relevant and influential communications to consumers, effectively increasing their interest in the brand and securing their business for the time to come.
Implementing a first-party data strategy offers a unique opportunity: By collecting and processing reliable customer data, you can attain the necessary information and attract the right prospects.
Disclaimer: The ideas and opinions expressed in this blog post are solely my own and are not representative of any current or previous employer. Any similarity to any actual company, organization, or individual is purely coincidental. This blog post is written to provide general information and does not intend to violate any non-disclosure agreement or confidentiality agreement.
Bernazzani, S. (2021, June 9). A basic definition of the first party, Second Party, & Third Party Data. HubSpot Blog. Retrieved September 26, 2022, from https://blog.hubspot.com/service/first-party-data
Hansen, J. (2022, April 6). New Privacy Changes Simplified: 3 actionable ways to respond. Salesforce.org. Retrieved September 26, 2022, from https://www.salesforce.org/blog/3-ways-respond-new-privacy-changes/
O’Connor, T. R. (2022, March 14). Why the death of the third-party cookie is good for brands and consumers. RIS News. Retrieved September 26, 2022, from https://risnews.com/why-death-third-party-cookie-good-brands-and-consumers
Ryzha, K. (2022, August 31). Eight benefits of first-party data strategy in 2022. CIENCE. Retrieved September 26, 2022, from https://www.cience.com/blog/first-party-data
Leave a Reply