– Written by Rosie Dath –
In the constantly evolving realm of digital marketing best practices, encompassing everything from the phasing out of second-party cookies to GDPR privacy compliance, the collection and utilisation of first-party data continues to be a fundamental aspect of successful digital marketing strategies within the industry.
For those seeking to gain a deeper understanding of first-party data, its significance in paid media campaigns and its effective use, we have highlighted the essential points in this article.
So, what exactly is first-party data and why does it hold significance?
In essence, first-party data refers to information that a business gathers directly from its customers, rather than acquiring it through external platforms or third-party providers.
Examples of first-party data include:
As this information is sourced directly from a brand’s audience, it is regarded as highly relevant and more valuable for marketing efforts compared to other data types. It allows for a clear understanding of your target audience’s behaviours, the channels they utilise and the factors that motivate their actions.
Additionally, first-party data is seen as more compliant, given that it is collected directly from users within a company’s privacy framework, provided that this framework is properly implemented.
However, it is important to consider that first-party data primarily represents your current audience and may be limited in offering insights into new audiences that have not yet been engaged.
First-party data can be gathered through various methods, such as employing Google Analytics to monitor website activity, using an in-platform lead form on a social media advertisement or collecting information when a customer makes an online purchase.
Examples of first-party data collection methods include:
First-party data is an immensely valuable asset for marketers. However, it is not the only type of data at their disposal. In this section, we examine other types of data and highlight how they differ from first-party data.
What is the difference between first-party data and second-party data?It is crucial to clarify that the distinction between first-party and second-party data lies not in the information itself, but in the method of collection concerning a particular brand or website.
For instance, the first-party data of one company becomes second-party data when it is sold or provided to another company. This exchange may occur through a collaborative agreement aimed at expanding data pools and audience segmentation.
One of the primary drawbacks of second-party data is the potential for integration issues with your own data management platforms.
Third-party data refers to information that can be purchased from a broker or company not directly involved in the data collection process. These brokers generally compile extensive datasets from multiple sources or websites to form audience segments, which can then be utilised by advertisers. Examples of third-party data providers include Acxiom, Experian, and Audience Q.
While third-party data can play a role in digital marketing strategies by aiding in the expansion of prospecting efforts, there are several drawbacks to consider. You often cannot gain insights into the means of data collection or the accuracy of the data provided. Additionally, as your competitors can also purchase the same datasets you’re using, it might not offer you a competitive edge.
This term is occasionally mentioned when discussing the various types of data, yet it is actually a subset of first-party data. In simple terms, zero-party data refers to information that a customer voluntarily shares with a website or brand, often in exchange for something.
Examples of zero-party data include information gathered from customer feedback forms, surveys or quizzes.
There are three fundamental reasons why first-party data is more crucial than ever for digital marketing initiatives.
Although Google has changed its stance several times on phasing out cookies, the long-term plan remains to eliminate them for marketing purposes, with Safari and Firefox already having done so. This change can, in some instances, affect cross-channel attribution and remarketing efforts.
First-party cookies and data collection, however, are not subject to the same risks. Therefore, adopting these types of data collection will help future-proof your digital marketing strategies.
When it comes to website analytics, users are increaingly mindful of cookie usage and their privacy choices. With an estimated average cookie acceptance rate of 31%, it is probable that brands are not gathering the majority of potentially available data. Although some analytics platforms are adapting to this situation through modelling, advertisers should strive to utilise all possible avenues for first-party data collection (such as subscriptions and call tracking) to further enhance their digital marketing strategies.
Improved data quality and value As noted earlier, first-party data holds greater value for digital marketing strategies because it is collected directly from the audience, making it more relevant and reliable for creating remarketing or lookalike lists across platforms. Leveraging this data to guide your marketing strategy will increase the personalisation and effectiveness of advertisements.
Consequently, brands should – whenever possible – focus on first-party data collection method to acquire more accurate and pertinent information about their audience.
Google’s original plans to phase out second-party cookies from Google Chrome have been postponed. While this delay provides brands with additional time to develop robust data capture methods and strenghten their marketing strategies, it does not diminish the importance of first-party data.
As previously mentioned, the advantages of high-quality information obtained through first-party data collection make it a crucial component of any digital marketing initiative. Google itself has indicated that first-party data will play a significant role in its future ad platform solutions following removal of third-party cookies.
By now the significance of a comprehensive first-party data strategy is evident, but how can brands go about creating one? In this section, we delve into the process of achieving this.
It is crucial to ensure that all methods of first-party data collection are operating efficiently and in compliance with GDPR privacy regulations to successfully leverage first-party data.
Website analytics tracking
Utilising Google Analytics or another website tracking platform falls under first-party data and provides invaluable insights into the online behaviours of your audience.
It’s crucial to ensure that your website complies with GDPR regulations when collecting data. If you’re using Google Tag Manager, implementing Google Consent Mode is essential to adhere to these regulations (learn more about Google Consent Mode and its importance).
Call tracking
Monitoring the source of your calls, whether they originate online or offline (such as through a call centre), is a crucial aspect of both first-party data collection and conversion optimisation. Additionally, consider SMS information, including open and response rates.
Companies like Infinity offer call tracking services that deliver detailed call information. Discover more about Infinity and why it is beneficial for your business.
Advertising platform pixels
Most social media advertising platforms offer a pixel or insights tag that can be integrated into a website to identify users across platforms and better attribute conversions. These are essential for building first-party data on social platforms and analysing campaign performance.
It is important to note that if you are using Google Tag Manager, each tag must be assigned a consent variable.
For those advertising with Google Ads, setting up Enhanced Conversion measurement is crucial for obtaining more accurate in-platform data.
Regularly checking for updates and new features of these pixels and insights tags can enhance the accuracy of the data collected through advertising platforms.
Forms
Utilising forms to request data from users is an effective method for collecting first-party data. Examples include:
CRM and email lists
Your email marketing software can gather a wealth of useful first-party data. Accurately segmenting your email lists into different categories is crucial for understanding your customers’ interests and the information they seek.
When done correctly, these categories can be utilised to inform your marketing platforms.
Mobile app usage
Monitoring your interactions within your mobile app can serve as an additional valuable source of first-party data, such as in-app purchase behaviour.
Offline data
Do not overlook your offline sources of data. These may include in-store purchases or surveys conducted with sales staff, all of which can contribute valuable insights into how you engage with your target audience.
There are numerous methods for utilising first-party data to enhance your digital marketing initiatives.
Understanding audiences and customer segmentation
By successfully establishing several channels for collecting first-party data, you can utilise this information to determine how to reach a larger audience of potential customers. This can provide insights into aspects such as:
Adapting your strategy in response to the data collected will ensure that your marketing approach evolves in tandem with the changing needs and expectations of your audience.
Remarketing lists throughout the funnel
A more advanced use of first-party data involves creating remarketing lists based on your customer segments. This strategy can be implemented at every stage of the sales funnel, such as:
Many platforms allow you to remarket to users who have performed specific actions within the platform itself or by leveraging uploaded customer data.
However, it is important to note that some platforms’ retargeting lists do not account for past actions when first created (as in the case of LinkedIn), so creating these lists only when the need arises may not be effective, as they will require time to build up. Therefore, it is advisable to prepare essential remarketing lists in advance, such as those for website visitors, completed purchases or social media profile visitors, to ensure they are readily available when needed.
Examples of remarketing lists based on uploaded customer data include:
Lookalike audiences for prospecting
Most advertising platforms provide a feature known as ‘lookalike audiences’ – this allows the platform to take a remarketing list and identify users who are similar to those in that list, based on audience signals. This approach helps to broaden the reach of prospecting campaigns while ensuring high relevance to the audience.
Lookalike audiences can be utilised at different stages of the sales funnel, depending on the seed audience selected. For instance, employing a lookalike audience formed from users who have made purchases online in the last 30 days is an effective method for enhancing the conversion stage. On the other hand, a lookalike audience based on individuals who have simply viewed one of your advertisements can greatly benefit an awareness campaign.
First-party data is an invaluable asset for any marketing effort, as it is sourced directly from your audience. Thus, it should be an integral component of your digital marketing strategy. If you require expert assistance, Passion is available to help you develop a data strategy to expand your business. Feel free to get in touch today!