The Importance of First-Party Data

First-party data is crucial for marketers everywhere. With privacy updates changing frequently, marketers are slowly losing access to the wild west of data we analyze to make informed marketing decisions.

So, what is first-party data?

First-party data is information you collect directly from your customers’ consent on your own channels. It can stem from customer purchases, support requests, form completions, and other website actions that require a user to opt-in or submit personal identifiers, such as the pop-up you have most likely just encountered on our website in the past few moments! 

It tells you things like:

  • Demographics 
  • Personal interests, actions, and behaviors
  • Purchase history
  • Subscription data
  • Social media data

The best part is that because first-party data comes straight from your audience or customers, it is free and beneficial for marketing purposes. You also own this data, so there are fewer privacy concerns associated with collecting, storing, and using it. With the depreciation of third-party cookies, first-party data is more valuable than ever.

What’s the difference between first, second, and third-party data?

Second-party data

Second-party data is acquired from a trusted partner. In most cases, you know the partner, which means you know the data quality and accuracy. You also know the data is relevant because it comes from a partner with whom you have a mutually beneficial relationship.

Your partner likely also complies with data privacy regulations like the GDPR and the CCPA, so you can be confident they collected the information with the permission of the consumers in the dataset.

You can also buy second-party data by connecting with partners through data marketplaces. When you acquire data this way, you can discuss the data with the partner and select only the information you want. If you decide to go this route, you must ensure the marketplace is trustworthy, the partners you are connected with are reliable, and their data is collected and managed correctly.

Second-party data can be identical to first-party data in that it’s collected in the same way, just by a partner. 

There are a few benefits to using second-party data:

  • It enables you to scale by connecting with new audiences that match your own audience data.
  • You can combine it with your first-party data to build improved predictive models. This is especially true when you don’t have a lot of customers from which to develop predictive models.
  • You can develop better audience insights by analyzing a more extensive audience group. Combining your first-party data with second-party data may help you find new ways to reach your audience or find new audiences to reach out to.

With second-party data, like first-party data, you need to store it securely and make it available through the same methods throughout your internal systems. You should also validate and “clean” your it the same way you do your first-party data to ensure it’s accurate and relevant.

Third-party data

Third-party data is data you acquire from a data aggregator. Data aggregators do not collect data directly but obtain it from other companies and compile it into a single dataset. As a result, the data can come from many different sources\ and there’s not always a clear definition of its source.

Most third-party data is purchased through a DSP (demand side platform) or a DMP (data management platform) for advertising. There are also many third-party data marketplaces, including Acxiom, Nielsen, Google, and OnAudience.

There are several reasons you might want to purchase third-party data:

  • It helps you reach a broad audience for your advertising programs.
  • When combined with your first-party data, it can help you improve targeting.
  • Third-party datasets are bought and sold programmatically and are usually very large.

The biggest concern with this data is that you do not know where it came from, so you can’t ensure its reliability or accuracy. You also can’t be sure it was collected according to privacy regulations. Therefore, when you select a third-party data provider, you must do your research and understand where and how the data was collected.

A Quick Distinction between Third-party Cookies and Third-party Data

Let’s make a clear distinction between third-party data versus third-party cookies – two terms that often get muddled up in the marketing world. A third-party cookie is basically a small data file that a website from a different domain drops into your web browser. This is what all the privacy fuss is about right now. More to come on this in an upcoming Granular webinar. A third-party cookie is there to remember your preferences and track your online journey through a number of websites and interests online, sometimes helping build a targeting profile on users. That’s what the EU has ruled shouldn’t be allowed.

Now, when we talk about third-party data, we’re referring to information that’s neither from the buyer or the seller. This data comes from an entirely different source – a third party. It’s a mixed bag, including things like demographic details, interests, and purchasing intentions. Remember, while they sound similar, third-party cookies and third-party data are different beasts in the digital marketing jungle.

Here’s a helpful cheat sheet that easily breaks each type of data down:

First-party data Second-party data Third-party data Zero-party data
Direct relationship with the customer Indirect customer relationship Indirect customer relationship Direct relationship with the customer
Collected with consent Collected with consent Unknown if it’s collected with consent (depends on the data provider) Collected with consent
Individual data Individual data Aggregate Data Individual data
High accuracy and reliability High accuracy and reliability Low accuracy and reliability High accuracy and reliability
Not shared Shared only with trusted partners Shared with many companies Not shared
– Customer email
– Phone number
– Purchase history
– Support history
– Loyalty program info
– Website activity
– Social media profiles
– Customer feedback
– Customer surveys
– Income
– Age
– Education
– Websites visited
– Survey responses
– Communication preferences
– Product preferences
– Customized account configurations

Why does first-party data matter for marketing?

First-party data has traditionally held significance in marketing and advertising. Its importance now, however, is reaching a critical level due to the actions of major internet browsers like Google Chrome, Safari, and Firefox, which have begun phasing out third-party cookie tracking to improve online user privacy – which will reduce some third-party data collection. 

Eventually, the collection, storage, and use of third-party cookies will become more restricted, leaving two ends of the targeting spectrum more standard than the 3rd party option being such an abundant targeting method currently.  On the extreme end of highly targeted data – companies will have to place increased reliance on their first-party data to engage with and target both existing and prospective customers. On the other end of the spectrum will be broader audience segments, large pools of behavioral data, and in general, a less targeted datasets to advertise towards. 

Fortunately, there exist several effective strategies to leverage first-party data and enhance marketing endeavors while strategically expanding your business.

1. Predictions

Because first-party data is extremely relevant, accurate, and reliable, you can use it to predict future patterns. Information collected such as behaviors, interests, and actions can be used to determine future actions of your audiences.

2. Personalization For Marketing

With first-party data you can personalize your marketing to engage with your customers creating content that is tailored specifically to them. You can speak directly to your target audience based on their behaviors across your website and social media platforms.

It’s proven consumers are more likely to engage with a brand when they provide some aspect of personalization in their marketing efforts. source: Adobe

3. Retargeting

First-party data can also be used for audience retargeting. Retargeting is a great way to reach potential customers who have shown an interest in your product or service.

You can use first-party data to target a lookalike audience or an audience that has similar behaviors and interests as your active customer base. 

When you browse a product online and then leave that website and visit another one, you may notice an advertisement from the previous website showing up. That is considered a retargeting advertising campaign that was made possible via first-party data. It is extremely effective and efficient in the digital marketing mix.

Implementing effective strategies for leveraging first-party data is a priority in today’s data-driven marketing landscape. By harnessing the power of your own customer insights, you can create more personalized and impactful campaigns, strengthen customer relationships, and ultimately drive sustainable growth for your business. As technology and consumer preferences continue to evolve, staying ahead of the curve with innovative data utilization methods will be the key to success. So, take the time to refine your approach, stay adaptable, and make the most of your first-party data assets to achieve lasting marketing success.


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