30-second summary:
- Third-party data is being phased out by big tech, making first-party data indispensable
- First-party information is willingly provided by users, helping you build a consumer profile
- Internet users are cautious about providing their data but will do if rewarded
- Tracking pixels, CRM platforms, and surveys and encouraging interaction and registrations effectively capture first-party data.
- First-party data must be used responsibly, repaying consumers’ trust in a business.
Data is arguably the most significant currency of all when doing business online. An effective and bespoke marketing plan can be devised by obtaining reliable data about your target audience. This will convince customers that you understand their unique needs, desires, and pain points. Alas, not all data is created equal. As the influence of the internet grows and the fallout of the Cambridge Analytica scandal continues to reverberate, consumer privacy is more important than ever. Any online business needs to build a consumer profile ethically and reliably. This makes the collection of first-party data critical.
What is first-party data?
First-party data is consumer information collated directly by your business based on user behavior. This data can be used to build a profile of your target audience, tailoring your marketing and user experience accordingly.
What is the difference between first-party, second-party, and third-party data?
As discussed, first-party data is user information collated directly from your website. We will discuss how you can obtain first-party data shortly. However, let’s clarify the difference between this approach and second or third-party data. Second-party data is essentially the first-party data collated by another business. This may be shared between two websites for an agreed common good. However, second-party data remains private. It will not be made available to the public and cannot be purchased. Third-party data is that which you purchase, usually from a data management platform (DMP) or consumer data platform (CDP). These platforms harvest data from users based on their online habits. These are known as tracking cookies.
It is important-party data is slowly being phased out. Internet users are growingly increasingly security-conscious and are looking to shape online privacy policies. Google has announced that they will remove third-party cookies from 2022, while the Firefox and Safari browsers have already done so. With Google Chrome accounting for some 65 percent of global web browser traffic, the impact of this will be keenly felt. In essence, that is important to note that third-party data is not gained through any personal relationship with consumers. Third-party data is a dying art, and second-; second-partyely belongs to somebody else. This means that first-party data collation should be a priority for any online business, now and in the future.
How does first-party data help a business?
Think of this as market research straight from the horse’s mouth. As Intimated previously, first-party data is used to build a consumer profile. Th monitoring how users interact with your web presence, you can offer them more of what they want – and less of what will not interest or alienate them. After all, there is little to gain by marketing a steakhouse restaurant to somebody that exclusively shows interest in a vegan lifestyle.
Perhaps the most compelling example of marketing through first-party data is Amazon. We’ve likely all purchased something from Jeff Bezos’ empire at once or another. Even if a conversion was not completed, you might have browsed the products on offer. Amazon uses this data to build personalized recommendations on your next visit. It’s not just a tool for direct interaction on a website, though. First-party data is also invaluable for advertising. By learning about the habits of a user, tailored marketing can reach them on social media. This is a powerful form of inbound marketing that piques consumer interest.
Consumers who have previously been interested in red circles may be tempted to experiment with a blue triangle but are likelier to stick to type. By embracing first-party data, you can meet customer needs before they ask. This is a cornerstone of success, especially in the competitive world of online commerce. After all, 63 percent of customers now expect at least some measure of personalization from any service provider.
