Digital marketers and advertisers have been espousing making data-driven campaigns for years. They have been vouching for the strategy’s effectiveness, but don’t really elaborate on what kind of data you need to grow your business. Now, they’re saying using first-party data is the way to go. But what is first-party data? Let us tell you.
What Is First-Party Data?
First-party data is simply information collected directly from audiences or customers. It includes data based on website visitors’ or app users’ behaviors, actions, or interests, information from customer relationship management (CRM) systems, and subscription and social data. It also includes nondigital information like completed surveys, customer feedback, and other client information from CRM databases.
First-, Second-, and Third-Party Data: What Is the Difference?
First-party data refers to your audience data collected directly from the source. Sometimes, however, the data source may lack scale.
Second-party data, meanwhile, is someone else’s first-party data that comes directly from the source and is sold in a marketplace (in other words, the seller collects that data straight from their audience.)
Finally, third-party data is collected from various sources (which are not the original collectors of that data), making it large-scale, that is bought and sold at a marketplace.
What Are the Benefits of Using First-Party Data?
While third-party data is more extensive in scale than first-party data, experts say the latter is more valuable because it comes directly from your customers. It is also available for free, making it the most cost-effective. It’s easy to collect and manage as well, especially if you use a data management platform. Using it also results in minimal privacy concerns because you know where it came from and you own it.
How Can You Use First-Party Data?
First-party data can help marketers in several ways, such as:
Predict Future Patterns
Since first-party data is accurate and relevant, you can predict future patterns like audience behavior confidently with its help. For example, if first-party data reveals that your audience does not pay attention to banner ads but watch video ads instead, then you may drop the banners and focus on making video ads.
Gain Customer Insights
First-party data gives insights even if the audience it is collected from is small. You can analyze the data for traits your customers share and build on that in the future to grow your business.
Personalize Content and Ads
First-party data is also useful in personalizing content or ads. It can give you an idea of your site visitors’ interests and needs so you can serve them personalized content and ads.
Comply with Strict Privacy Regulations
Since you own first-party data and are responsible for collecting all the necessary consent, you can ensure your company’s compliance with privacy regulations. That is especially useful for strict laws like the General Data Protection Regulation (GDPR).
Reach More People
Most browsers block third-party cookies, but all browsers accept first-party cookies. That means that advertisers can target segments created from their own data.
How Do You Gather First-Party Data?
Collecting first-party data is possible by enabling a pixel on your website. The tool gets visitor activity data. It can also obtain information from various sources like integrated data management platforms (DMPs).
First-party data can also be pulled from other databases like CRM systems. That should work if your clients give information upon signing up for your email list or buying something from your website. If you have a DMP, it can gather data from various sources into one place. When the information is complete, you can analyze it to gain a holistic understanding of your customers.
What Forms Can First-Party Data Take?
First-party data can include a customer’s
- visited websites and interactions
- purchase history
- time spent on your site.
Where Can You Get First-Party Data?
First-party data, such as visitors’ names, email addresses, behaviors, and transactions, can come from various sources, including a company website.
Mobile app users can be a brand’s most enthusiastic supporters. But to ensure useful data is extracted from an app, you need to define which events are meaningful then log and measure them.
Email marketing offers data like open, click, and bounce rates that can date back to when a brand gets off the ground. Short Message Service (SMS) data can get the same results since text messaging is an intimate communication form.
Other possible sources include point-of-sale (PoS) terminals, beacons, and call centers.
A marketing strategy no longer just requires third-party data, it needs all kinds of information from as many sources as possible to succeed. While keeping up with consumers is challenging, the right technology and customer intelligence strategy that uses first-party data takes you to the most direct route to them.