What is First-Party Data? How Can Marketers Use It?

In the wake of new data privacy laws and device settings, marketers are getting a crash course in the importance of first-party data. If you’re reading this you’re likely a marketer asking questions like, “What is first-party data?” and, “How do I use it in my strategy?” This article will help you answer both of those questions.

What is First-Party Data?

First-party data is information you gather directly from your audience. This kind of information can be collected both online or offline, manually or automatically. Examples include:

• Customer profile data in your CRM
• Behavioral data from your website
• Data from social media profiles
• Survey data you collect
• Subscription data
• Purchase history

Why is First-Party Data Important?

New data privacy laws like CCPA set off a chain of events leading tech giants like Apple and Google to introduce new privacy settings on iPhone and Android devices. You may have seen Apple’s advertisement about their new App Tracking Transparency feature:

As more users take advantage of privacy features like this, it will make it harder for marketers to analyze audience behavior on ad platforms like Facebook and Google. This is due in part to new privacy settings, but also because third-party tracking pixels, or “cookies,” will eventually be blocked.

While blocking third-party cookies has been delayed by Google to 2023, it is still important for marketers to have a plan for addressing this shift to the advertising landscape. No longer having access to this kind of third-party data will make companies prioritize their own first-party data if they want to analyze audience demographics, personalize messages and target niche segments. 

What is the Difference Between First-, Second- and Third-Party Data?

The primary difference between first-, second- and third-party data is the source. Companies have historically relied on other sources to build out their datasets.

Second-Party Data

Second-party data is first-party data one company receives from another. For example, a hotel chain wants more information about its customer base, so it purchases customer data from an airline or local travel agency. Second-party data is still high-quality because it comes directly from consumers, and it can help you increase your dataset. 

Third-Party Data

With third-party data, there is no direct relationship between your company and the consumer. Third-party data is typically gathered via cookies on global platforms like Facebook and Google. These platforms then aggregated that data into audience segments, which they used to target ads and generate reports.

Zero-Party Data

Technically a type of first-party data, the term “zero-party data” is information volunteered by customers. For example, a prospect completes a contact form on your website with fields for name and email, plus a comment box. There they mention their business is located in Virginia. Since their geographic location was not explicitly asked for, the volunteered information is zero-party.

How Can Marketers Collect First-Party Data?

Consumers are waking up to the importance of their personal information. Marketers will need to examine the value of their content and promotions offered in exchange for personal identifiable information (PII) like names and email addresses. Here are examples of how companies can collect this kind of data from their audience:

• Make it easy for users to accept first-party cookies on your website
• Offer discount codes or coupons in exchange for email address
• Create quizzes or other game-like experiences for users
• Allow users to create an account profile on your website
• Offer rewards programs for repeat customers
• Offer high-value content behind a form
• Ask users to participate in a survey

How Can Marketers Activate Customer Data?

Marketers can use customer data to enhance their marketing funnels. Here are a few ways to activate customer data.

Email Marketing

Email has been a mainstay in marketing mixes for decades now, and it’s not going away. With fewer channels to target direct-response advertisements and offers, email will be more important for revenue conversions. It will be one of few channels marketers will be able to use to personalize messages and build niche audience segments based on demographic information.

Audience Building

You can use data in your CRM to inform machine learning on platforms like Facebook to build lookalike audiences. However, with more users filtered out from ad targeting due to privacy settings, marketers will need a higher volume of contacts for machine learning technology to match lists to cohorts of similar users. This means campaigns targeting highly niche audiences will likely become ineffective. Instead, campaigns may need to be consolidated to account for shrinking audience sizes available to target.

Dynamic Content

Depending on how robust your dataset is, your website can showcase dynamic content based on fields like geographic location, industry, or even specifics to the account. This is especially useful for B2B organizations with an account-based marketing (ABM) strategy. Imagine if a prospect at a target account visits your website and is served content showcasing relevant industry expertise or case stories of how your company helped a company like theirs. This would be a powerful way to leverage data to create a more personalized user experience.

How Can Marketers Build and Scale a Data Strategy?

There is no one-size-fits-all strategy for collecting and using first-party data. Each company is in a different phase of their growth and serves unique audiences. If you’re a marketer who wants to get serious about building and scaling a data strategy, there are a few ways Silverback Strategies can help:

• Download our eBook, “How to Build & Scale a First-Party Data Strategy” to learn more
• Request a First Party Data Strategy Consultation to speak with an expert

Or, if you have a specific question, fill out our contact form or send me a message directly on LinkedIn.