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In today’s digital landscape, new marketing buzzwords emerge and take the world by storm — and first-party data is no exception!
Through the use of the right technology, it’s so much easier for businesses to tailor their marketing campaigns using the data they’ve collected about their customers.
Are you looking to learn more about first-party data? If so, you’ve come to the right place!
I know this concept can be complex, especially when you’re looking to incorporate it into your business, so I’ve created this guide to help you understand first-party data and its role in modern marketing strategies.
However, that’s not all. I’ll also discuss:
- The importance of first-party data
- Where you can obtain first-party data
- Comparing different types of data, such as zero-party and third-party data
- Steps to use first-party data for your marketing needs.
- There are different types of data that are useful for marketing, such as first-party, zero-party, and third-party data.
- First-party data is one that you collect directly from your audience, customers, and prospects. It’s a valuable tool for gaining accurate insights that you can weave into more personalized marketing strategies.
- With the help of first-party data, you can make more informed decisions and use consumer insights to create targeted campaigns that drive growth.
- First-party data sources are all around you! Some popular options include websites, mobile apps, and even beacons.
- To maximize the benefits of first-party data, you must create a plan, choose data sources, find better ways for effective data use, and continually monitor how helpful your data collection strategies are.
What is First-Party Data?
Think back to the last time you visited a website and it asked you about cookies. If you accepted those cookies, then you’ve allowed the company to collect first-party data!
First-party data includes all the data and information you’ve directly collected from your customers.
There are many ways to obtain this, such as through opt-in forms, spending habits, and more. Still, whatever modes you choose, you’ll generally need to ask for your customer’s consent before collecting any information about them.
Once you’ve gained their consent, you now own that data — and if there’s anything that businesses want, I don’t think there’s much that’s better than information that will help drive marketing campaigns, revise business strategies, and maximize profits!
Why is first-party data is essential to marketers?
One simple reason: information!
First-party data is a treasure trove of reliable information that offers deep customer insights, allowing you to make personalized campaigns and improve engagement while minimizing costs.
Basically, it makes marketing a lot more efficient because you have information guiding you about what your customers respond to the best.
- Was the last sale scheduled on the holidays a lot more successful than others held that year?
- Did customers add one product to their wishlists more than other products?
- Is the recently announced launch creating a rise in website traffic?
These are the kinds of questions that first-party data can quickly answer!
Additionally, first-party data is something you own directly, so there’s less reliance on third-party entities (giving you more control).
And if nothing else, at least you can be sure that you’re collecting information that’s actually relevant to you – which is always a huge plus!
Sources of First-Party Data
Thanks to technology, first-party data is incredibly abundant. Chances are, you already have the infrastructure in place to start collecting them!
If you’re not sure where to look, though, here’s my top picks for first-party data:
Website. You likely already have a website (and you definitely should, given how important it is for visibility), so you’re already a step closer to collecting important information about your customer’s behavior and transactions.
This can include names and email addresses (remember newsletter sign-ups?), most viewed and bought products, and even just the time spent per webpage!
Mobile web. Almost everyone’s carrying their phones around, so why not take advantage of that? Mobile websites are also nifty tools for collecting data, especially if you create one that doesn’t rely too much on cookies
Mobile apps. In my books, mobile apps create a win-win environment for both you and the customer.
You can engineer brand loyalty through membership programs, offer enticing vouchers and discounts, and create an exclusive place for checking out your services — all through a platform that exposes you to your customers’ data
Email and SMS. Don’t sleep on trusty old email and SMS, either. These two offer crucial open, click, and bounce rate metrics, as well as provide you with a wider reach in just a fraction of the time
Point of sale and CRM. Who says first-party data can only be sourced through online tools? These offline modes also give you access to customers’ purchase histories, paving the way for more personalized targeting and measurement of sales trends!
Beacons. If cookies give you insights about customer behavior online, beacons are the in-store equivalent. These Bluetooth-powered devices allow you to check what products customers are browsing and even send customized notifications!
Call centers. Call centers are another rich trove of customer data, especially because they expose you to common customer concerns and provide analytical data for marketing strategies.
First-Party Data Examples
Here are some of the best examples of first-party data strategies employed by giant brands.
The cosmetics brand L’Oréal initiated a “Database Re-qualification Project” which saw them update and enhance customer data.
The results were outstanding: over 700 campaigns and 5.5 million engaged users who willingly shared their first-party data!
Another brand, Mr. Wonderful, used integrated interactive marketing with first-party data to nurture relationships with their two million-strong social media community.
This approach led to increased web traffic, substantial database growth, and higher email engagement!
First-Party Data Use Cases
You may already be plenty excited about collecting first-party data, but how can you utilize it optimally? Here are some of the best use cases!
Map the customer journey. First-party data provides you with a closer look at your customer’s behavior and allows you to identify common patterns throughout their journey to conversion.
If you know that a certain campaign is getting a lot of traction, you can employ similar strategies in the future!
Close the loop on attribution. How do you know if your marketing campaigns are actually influencing customers?
With first-party data, you know how customers respond to different marketing strategies, so you can optimize your resources and spend them in areas you know you’re performing well
Increase relevance. Increased personalization and improved customer experiences are some of the best ways to use first-party data!
This helps build a strong relationship with the customer — leaving them to think that you always have their needs and interests at heart
Create a single view of the customer. First-party data is so rich with information that you can create a comprehensive customer profile!
With a better understanding of customer motivations, you can spend resources more efficiently and generate higher ROIs with advertisements.
First-Party Data Challenges
As with anything else, using first-party data also has its challenges. If you remain aware of these, I’m sure you can effectively navigate through first-party data and integrate it easily into your business!
Taking action in real time. First-party data is like a waterfall — it’s appealing from afar, but can be quickly overwhelming when you’re standing right in front of it!
With so much data reaching your doorsteps, I know it’s a lot tougher to take action immediately.
Lack of a data strategy. What sorts of data do you want to collect, and how are you sure that these will help you improve marketing campaigns?
Having a solid data strategy allows you to pinpoint source identification and map data collection so you can quickly answer the 5W1Hs of first-party data!
Integrating data across platforms. If data is scattered across different platforms, it’s more of a headache than an advantage. Using purpose-built tools will help you integrate data and organize them in something meaningful
Resolving identity and building profiles. Customers often flit between different platforms (say, your mobile app and website), so building comprehensive profiles is one of the biggest challenges of first-party data.
Taking steps to unify all these data prevents wasting resources and helps you create a better, more targeted customer experience!
First-Party Data vs Third-Party Data: What’s The Difference?
If you’re looking into using data for your marketing needs, I’m sure you’ve also come across third-party data.
How is it different from the first-party data we’ve been talking about? Unlike first-party data, third-party data comes from a data provider that collects information from a variety of sources.
For example, a third-party provider can track a customer when they view bags online, book a flight, and search what movies to watch.
You can probably see why third-party data is also an appealing choice; it provides an insanely complete picture of a customer.
First-party data can run the risk of projecting customers in a vacuum, so you don’t really have any clue about why they’re doing what they’re doing.
If you notice that certain customers are looking at a specific type of product and you also have third-party data to rely on, you might notice a connection between your product and other activities.
Do you want to learn more about the difference? Check out this comparison table!
|Data is collected directly from users or customers
|Information is acquired from external sources, not owned
|You own and control the data you’ve collected
|Third-party entities own the data
|More accurate and reliable because of direct, more real-time collection
|Runs the risk of being less accurate or outdated
|Highly customizable for personalized marketing
|Only limited customization options
|Privacy and Compliance
|Easier to manage compliance
|More significant concerns of confidentiality
|Detailed customer targeting
|Delivers broader audience segments
|You have complete control over data use
|You have less control as third-party entities completely manage the data
|Directly collected and relevant data, so there’s a slower decay rate
|Faster decay due to various sources
Choosing between first-party data and third-party data
Because they have their respective strengths and advantages, choosing between first-party and third-party data is a struggle I know all too well!
When it comes to accuracy and reliability, first-party data has a huge edge over third-party data. It provides better contextual insights, so it’s very important for personalized marketing.
And if your customers are exposed to tailored strategies, they’ll have a better experience! On the other hand, third-party data allows you to expand your audience reach.
How? The wider information that third-party data entails provides you a more complete picture of potential customers and their demographics.
However, because there are potential privacy concerns and accuracies, it’s a good idea to not rely solely on third-party data.
Overall, I recommend going for a balanced approach between the two, but with more reliance on first-party data!
First Party Data vs. Zero Party Data: What’s The Difference?
There’s first-party data, and there’s third-party data – but have you heard of zero-party data? This term refers to the information users are willing to share directly with your brand.
The keyword here is “direct”. Zero-party data goes beyond traditional data collection methods and involves direct interactions with users.
You’ll have front-row seats when users provide their preferences, interests, and personal information!
Here’s how each type of data stack up against each other:
|Collected directly from your users or customers
|Voluntarily provided by users
|Obtained through user interactions
|Collected through explicit and direct user input
|Captured through user behavior
|Shared explicitly with the brand
|Includes observed behaviors and interactions
|Focuses on preferences, purpose, and personal data
|Allows personalization based on user history
|Enables hyper-personalization due to direct insights
|Aids in building customer
|It can involve both active and passive interactions
|Requires active engagement and trust
|Offers insights into preferences and behavior
|Provides precise insights for tailored strategies
|Complies with privacy regulations
|Requires explicit consent and transparent usage
Choosing between first-Party data and zero-party data
Not sure which type of data to use? Let’s break each one down.
First-party data is collected based on user interactions and behaviors, while zero-party data is explicitly provided by users.
While zero-party data gives a nice picture of a customer’s preferences (and helps to build a deeper relationship with your customers), it can also be more challenging and less sustainable than first-party data.
Are richer personalization, better targeting accuracy, and greater consent transparency your priorities?
If so, zero-party data is excellent! However, first-party data is still essential for monitoring user behaviors and understanding how they’re engaging with you.
If you have the resources, I recommend adding zero-party data to your marketing campaigns.
However, if you can only choose one or the other, I would prioritize first-party data over the zero-party variation.
How to Get Started
I bet you’re getting excited about using first-party data! Here are the steps you can take to get started:
1. Create a Roadmap. The journey of integrating first-party data begins with the first step, but you won’t know where to go if you don’t have a roadmap at the ready!
A plan is extremely important to help you define marketing objectives, tactics, and the analytics you need for marketing
2. Determine Data Sources. Your roadmap should inform you of what you need to look for – but where are you going to source your data?
It’s important to determine data sources and make sure they’re the best option for the metrics you’re looking for.
3. Enhanced Data Use. Even before you were consciously aware of it, I’m certain that you’ve already used first-party data. This time around, having a plan opens different pathways for your marketing, products, and services!
4. Monitor Progress. Any tool or information is only useful if you keep checking on it regularly.
For something as dynamic as first-party data, it’s best to continually evaluate first-party data capabilities, track metrics, and integrate insights you’ve gained each time!
Congratulations on getting through this comprehensive first-party data guide! After reading this article, you’re one step closer to modernizing your marketing strategy with the help of first-party data collection.
Of course, to guarantee your success, I recommend that you continue to learn more about data collection.
Who knows – you might just find more avenues for even greater marketing strategies!