Harnessing the Power of First-Party Data
First-Party Data has emerged as a game-changer. With recent data privacy changes and increased consumer awareness, we explore how to uncover its power.
In the ever-evolving landscape of digital marketing, the realm of data has witnessed significant transformations, and none more impactful than those occurring right now. However, as these changes happen, there are benefits to be gained.
The Changing Landscape of Data Privacy
It’s a scene those in marketing will likely be preparing for already - a cookie-less world. With Firefox and Safari already turning their backs on third-party cookies and Chrome phasing them out by the end of 2024, the digital data landscape will be changed forever.
READ MORE: Unmuddling the World of Cookies
But this isn’t a doomsday situation. This transformation is leading us towards a future of consent-based advertising, where greater transparency is key, and user privacy is championed. For two decades now, third-party cookies have dominated advertising, but when one door closes, another one opens.
The Rise of First-Party Data
What is First-Party Data?
First-party data refers to information that’s collected and owned by your brand, about your audience, through your channels.
It’s information about your customers and audience that you gain access to without the need for another party. It includes data such as audience demographics, customer purchase histories, website activity and engagement, social media engagement, referral information, and customer contact details. It can be sourced from places such as web and social analytics, customer purchase history and billing addresses.
An example of first-party data is an online retailer having a database of shipping information regarding customers who have ordered products from their store.
First-party data is brilliant as it’s reliable (you’ve collected the data, so you know it’s right), can be easily folded into the marketing mix, and is relevant to your customers and your audience. As you’re in control, you can also guarantee it complies properly with privacy regulations, ensuring your policy clearly defines how it will be used.
What is the Difference between First and Third-Party Data?
First-party data isn’t the only information you can come across; there is also second-party, third-party and zero-party data. Each has its own benefits when considered in the marketing mix.
Second-Party Data: Simply put, second-party data is someone else’s first-party data that you buy access to directly from the owner. It can give you alternative insights that are both fresh and relative to your audience. And, as it’s purchased from the collector and owner directly, it’s incredibly reliable and more likely to be accurate.
An example of second-party data is a new sports retailer getting information on the number of members of local sports teams to know what sports are most popular in the area.
Third-Party Data: Third-party data is bought and sold specifically for marketing and advertising purposes and often includes information taken from a range of sources. It can offer low-cost data in large quantities to help you learn more about consumer behaviour and marketing trends. However, as it’s not bought from the collector, it can be hard to determine its accuracy and freshness.
An example of third-party data is a retailer buying data that matches the social handles of people following their direct competitors to their name and location for more effective ad targeting.
Zero-Party Data: Finally, zero-party data is information that customers exchange for something of value. Unlike first-party data, zero-party data is consciously and pro-actively offered up by customers. Zero-party data differs from first-party data in that it’s directly offered in exchange for an improved experience.
An example of zero-party data is customers opting into a supermarket’s loyalty scheme in order to receive discounts on products when shopping in-store.
The Benefits of First-Party Data
There is a wealth of benefits to first-party data. Firstly, it’s something most companies will already have, even if they aren’t currently using it to its full potential. This means you have exclusive ownership of the data and complete control of it; first-party data is great because you know it’s something your competitors don’t have access to. What’s more, you’ll know it’s reliable, accurate and fresh.
First-party data will mean you can gain deeper insights into customer preferences, behaviour and buying patterns. These insights will allow for better personalisation and customisation – you’ll be able to deliver targeted messaging, create tailored experiences and drive customer loyalty.
The Challenges of First-Party Data
There are also some challenges when it comes to first-party data, however. When you are the collector and owner of the data, you need to ensure your privacy policy is clear regarding how the data will be used, and ensure that you keep up with industry changes and data privacy requirements. Then, once collected, you must manage and organise the data in a way that allows it to be used.
Helping Mitigate Those Challenges
Although those challenges are there, they are challenges, not limitations, and can be overcome with a proper first-party data strategy. We’re ready to partner with your brand to ensure you’re maximising the management and measurement of your first-party data.
We can work with you to ensure that your website is respecting user consent choices as well as deploying techniques that will help to mitigate any data loss experienced through unconsented users. We’ll also work with you to optimise the way in which your data is handled, organised and used to enhance your marketing effectiveness. Working with LOOP, our market-leading data visualisation system, you’ll have marketing information condensed into a simple-to-use interface.
READ MORE: LOOP: Market-leading analytics made simple
We’ll also be able to put your data into context. As a leading marketing agency, we’re able to enrich your data with additional datasets, allowing for further insights to be drawn and perspectives to be gained. By including additional datasets, you’ll be able to contextualise the information you have and see it as a part of a bigger picture.
READ MORE: The Importance of Data Strategy
Future Trends and Adaptation
There is no doubt that this is the start of a data revolution, and that first-party data is transitioning from a nice-to-have to a necessity. With this transition, it’s only natural that we’ll see adaption as the industry adjusts.
One such adaption is data clean rooms. Although they have been around now for some time, cookie and privacy changes are going to make them even more essential. With the ability to allow data to be shared and insights to be drawn whilst keeping information anonymous, data clean rooms are expected to be utilised more and more in order to adjust to ongoing data changes.
We’ll also see a strong push towards websites encouraging users to log in for a better experience. When logged in, a user can be associated with a first-party identifier that helps to join up their journey across multiple devices and sessions, allowing for greater insight into their engagement. In an age where users understand the value of their own data, it will become increasingly imperative to build a brand underpinned by ethical and trustworthy data.
Are you looking for help with your data strategy, or do you need support in making sure your privacy policy respects user choices? To learn more about what we can offer and how we can work together, contact us today.
Jordan Heighton
Our Digital Strategist, Jordan, enhances our team with a profound understanding of data, analysis, and digital practices, which he is incredibly passionate about.
