Why Growing Your First-Party Data is Crucial

Think powerful targeting in ad platforms like Google and Meta, the building of lookalike audiences, ad personalisation, email lists and much more. 

However, not all data is created equally, and recent and upcoming changes in privacy laws and platforms means marketers have to understand the different types of data, and where they should be investing their time and money to stay ahead (and out of trouble) of these changes. 

Bottom line, data will continue to be a critical part of your marketing toolkit, but only if you adapt to the new reality.

First-party data refers to the information that a company collects directly from its own customers or users through interactions with its owned channels or touchpoints. It includes data such as website visits, purchase history, email interactions, and other customer-related information.

Second-party data refers to data that is obtained directly from another company or organisation. It is shared or exchanged between two trusted entities, typically through a strategic partnership or collaboration. This data provides insights into another company's customers or audience, allowing for enhanced targeting and personalisation efforts.

Third-party data refers to data that is collected by external entities that are separate from the company using the data. These entities gather data from various sources, such as websites, apps, social media platforms, or data aggregators. Third-party data providers compile and offer this data to marketers for targeting, audience segmentation, and insights. It can include demographic information, interests, browsing behaviour, and other attributes, providing a broader view of the target audience beyond a company's own data.

Recent (and upcoming) changes to privacy laws such as GDPR and CCPA, have imposed stricter consent requirements for collecting and using personal data. Companies and platforms are increasingly cautious about sharing user data and the end result has been a reduction in the quality and quantity of second and third-party data. 

There is no suggestion this move to greater privacy will ease up. If anything, the expectation is that second and third-party data will continue to be challenged.

On top of this are platform changes, such as Apple's App Tracking Transparency (ATT) framework and Google's phasing out of third-party cookies, which have (or will) reduce the accessibility and usability of third-party data. These changes aim to enhance user privacy by limiting tracking and data sharing across platforms, affecting the availability and reliability of third-party data.

First-party data has always been the most powerful data for marketers. It’s also often been the most expensive to collect and maintain, and the reality is that many marketers have failed to build this asset effectively and typically make use of it in only limited ways.

The data landscape is changing, and the incentives for building first-party data and getting the most out of it, is getting stronger and stronger. When it comes to third-party data, ad targeting is unlikely to return to the good old days of the fairly recent past. Sending bulk emails to unsuspecting databases of people who have never heard of you will continue to be a poor idea. Tracking users across devices and platforms is not something we’ll be able to rely on. And so it goes on. Using technology and third-party personal information at scale is going to continue to decline as will the results of marketers who rely on it.

This leaves marketers willing and able to deliver real value and build real relationships with their audience in a powerful position. In a world where brands who do not know us will struggle to target us with ads and content, those brands who have invested in a relationship with us will be in a powerful position, because they will have the ability to truly stand out.

At its simplest level, first-party marketing data is typically an email address and a name. It can, and should, be so much more than this. At its best, first-party data can power personalisation, segmentation and insights to truly transform marketing ROI. 

Here’s some examples of first-party data: 

• website interactions including specific pages/products of interest
• email engagement
• customer profiles including demographics, contact details and preferences
• purchase history
• customer feedback including surveys, reviews or feedback forms
• sales and customer service interactions
• preferences and interests
• location data
• wishlists and favourites
• abandoned cart data
• search queries
• subscription data
• device and browser information
• event attendance and preferences

How much of this information are you capturing and using as part of your marketing efforts?

It’s time to get creative when it comes to what you want to know about your audience for their, and your, benefit.

The true value of first-party data is in what a marketer chooses to do with it. Consider these options:

• Personalisation: Utilise first-party data to deliver personalised marketing messages and experiences based on individual customer preferences, behaviours, and purchase history. These can be emails, SMS and any other way you communicate directly with your audience.
• Audience segmentation: Segment your audience using first-party data to create targeted marketing campaigns for specific customer segments. This allows for tailored messaging and offers that resonate with each segment.
• Customer retention: Identify customers at risk of churn using first-party data and implement targeted retention strategies to reduce churn rates. Engage with customers based on their specific behaviours and preferences to encourage continued loyalty.
• Cross-selling and upselling: Leverage first-party data to identify cross-selling and upselling opportunities by understanding customers' previous purchases and preferences. Recommend relevant additional products or upgrades to increase sales.
• Customer journey optimisation: Map out the customer journey using first-party data to identify touchpoints where customers may face challenges or drop off. Optimise the customer journey to enhance the overall experience and increase conversions.
• Loyalty programs: Use first-party data to enhance loyalty programs by understanding customer behaviours, preferences, and engagement levels. Tailor rewards, incentives, and communication to increase participation and loyalty.
• Predictive analytics: Develop predictive models using first-party data to forecast customer behaviour, such as purchase likelihood, customer lifetime value, or churn probability. This helps in making data-driven decisions and optimising marketing strategies.
• Customer feedback analysis: Gather feedback and insights from customers through surveys, feedback forms, or social listening using first-party data. Analyse this data to understand customer sentiment, pain points, and preferences for improved product development and marketing strategies.

If the best time to have launched a first-party data strategy was 10 years ago, then the second best time is today. As emerging trends in digital marketing continue to change the way we engage and interact online, there is nothing but upside for those marketers who choose to take the collection, and the use, of first party data seriously.