First Party Data: What Is It and Why Do You Need It

Third-party data is on the way out. Customers are starting to place a higher priority on privacy, and that means they’re opting out of (or outright blocking) data tracking applications on their apps and on the web.

Software companies are taking notice. Messaging apps that offer end-to-end encryption like Signal, Wire, and Telegram are growing in popularity. Apple recently made news by adding an opt-in feature for data tracking in all third-party applications, ruffling feathers in the advertising world. Most notably, Google Chrome followed Safari and Firefox by announcing that it would soon block all third-party cookies.

It seems likely that advertisers and marketers will soon lose most or all of their access to third-party data, bringing the importance of first-party data to the forefront. Here’s why you need to familiarize yourself with first-party data before it’s too late.

What Is First-Party Data?

First-party data is any data that an organization collects directly, rather than counting on a third party to collect it. First-party data generally comes from customers, site visitors, and social media followers, but doesn’t include data about strangers that have never interacted with your company.

First-party data also tends to be the most reliable and most valuable, since it’s collected directly and comes from the people that matter the most — your existing audience.

How to Collect First-Party Data

Typically, you’ll assemble first-party data from your site analytics and a pixel added to your website, product, and social profiles. That pixel will collect information about behaviors and actions and record it to your CRM to be collated and analyzed. A pixel can give you excellent anonymized data on a particular web visitor, but it can’t tie that data to a specific person. To collect individualized user data, you might use:

  • Registration: requiring or at least incentivizing registration is an excellent way to get some basic information out of your customers. Offer benefits to registration, like the ability to save shipping and payment information or personalized suggestions. If you can get a name and email address, you can tie that person’s identity to the behavioral data from the tracking pixel.
  • Expanded research: despite a recent push for privacy, many people still put a lot of personal information online. They might use the same email to register for your site as they do on LinkedIn, for example, allowing you to learn their company and job title.
    Technology is your friend — there are several utilities available that can help you collect publicly available information about people using social media profiles. The more data you can collect and integrate into your CRM, the better.
  • Behavior profiling: as you collect first-person data, you’ll start to notice patterns in people’s behavior. They might read the same blogs, download the same articles, or sign in at the same time of day. If you can find patterns in behavior and connect them to certain characteristics, you can make educated guesses about what future customers will be interested in.]

The Value of First-Party Data

First-party data isn’t just a necessary replacement for waning access to third-party data — it can have significant advantages of its own. First, as we mentioned earlier, it’s much more reliable than third-party data. When you use third-party information to target ads or build email lists, you have no idea how reliable or current the information is. You might target someone who no longer works in the right field or lives in the right state for your product.

With first-party data, you know the data is reliable because you gathered it yourself. More accurate data allows you to conduct better targeting, putting pertinent information in front of people who can benefit from it the most.

More accurate data will also lead to better marketing performance. In any campaign, a certain amount of money is wasted on people who aren’t interested in your product, but a more accurate picture of the desires and needs of your target market will cut down on that waste.

Finally, your measurement and attribution will improve significantly. By tracking individual visitors and customers across your site and social channels, you’ll gain valuable insights into how your customers conduct research and make decisions. The more you know about how strangers move down your purchase funnel to become customers, the more accurately you can help them along the journey.

Take Advantage of Technology

First-party data collection is going to be crucial for all brands moving forward — you can’t afford to ignore this shift in the way digital marketing is done. To fully take advantage of first-party data, you’ll need to find the right tools to collect, analyze, and take advantage of the data you need. Embrace the role of technology in data collection and your company will be prepared for this new shift in the online world.

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