In the wake of data privacy laws and device settings, marketers are learning the importance of first-party data. It can be incredibly valuable when used properly, but many marketers do not have a cohesive strategy for collecting, organizing, and activating such a useful resource. What is first-party data? How do you use it? Let’s dive in.

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?

After marketers have identified digital marketing objectives and mapped their lead-to-sale journey, they are in a position to leverage the power of user data. When used right, first-party data can fuel digital marketing campaigns through lookalike audiences, analytical insights, email segmentation, and dynamic content. It can provide insights that influence creative elements like copy and imagery, making marketing messages more relevant and impactful.

However, the landscape is shifting. Marketers need to evolve their tech and systems to adapt to this change. The clock is ticking, thanks to regulators and big tech companies.

New data privacy laws like California Consumer Privacy Act (CCPA), General Data Protection Regulation (GDPR), and Canadian Anti-Spam Legislation (CASL) have 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.

With the deprecation of cookies, it has become even harder for Google, LinkedIn, and Facebook to understand who our target audiences are. With less information and data available, audiences suggested and offered by these platforms have become less dependable.

While blocking third-party cookies has been delayed by Google until 2024, it is still important for marketers to have a plan for addressing this shift in the advertising landscape. No longer having access to this kind of third-party data will force companies prioritize their own first-party data if they want to analyze audience demographics, personalize messages, and target niche segments. First-party data is data that is the most dependable, trustworthy source of information (especially coming from your CRM). Automation has taken a huge step in the world of digital marketing, and now is the time to understand that feeding automation with the correct signals will help you out in the long run. 

How To Build and Scale a First-Party Data Strategy

Here’s what you need to do to build a first-party data strategy.

Identify Available Data Sources

In what ways do you interact with your customers? How are you utilizing different marketing channels and social media platforms to capture user data?

Organize Your Data

Out of all of the data you have collected, how many have become leads? How many MQLs & SQLs?

Being able to differentiate between current customers and potential customers is crucial to understanding who you’re trying to capture with specific messaging and creatives. 

What is your Objective?

Why are you using your data? Is it to feed intent signals to Google to help AI understand who you’re trying to target and why?

Setting an objective for your data can be a clear and concise way to make sure your team understands why the data is being used and the potential outcome of using that data. 

First party data allows you to take advantage of Google’s smart bidding algorithms more effectively since Google will be able to determine similar features between all of the people who became customers and find additional people who have similar behavioral patterns and intent behaviors. 

Personalize the Customer Journey

Knowing your target audience from first-party data is a great way to improve your marketing.

One of the most crucial aspects of digital marketing is understanding how to reach that target audience. At what step of the funnel are they currently? What messaging works best for the people who are at this current step compared to others who are a step ahead? Asking yourself these questions will help your company personalize each customer’s journey to give them the best experience possible.

What’s 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.

The Best Sources for First-Party Data

The best first-party data is from your company’s CRM. This is where all potential lead & lead data is stored and organized. Some CRMs, such as Salesforce and HubSpot, have integrations with Google that allow you to feed data between each platform. Creating these conversion actions/audiences can help you at each level of the customer journey and supplement your creatives.

In order to feed your CRMs with relevant data, using Google – which is a higher-intent platform – can help identify those more likely to fill out a form.

On more passive channels, such as LinkedIn & Facebook, LGFs are a great way to identify prospects who are interested and could become potential customers.

Examples of Ways to Collect First-Party Data

  • Sign-Up forms that include exclusive content and relevant information in exchange for their email address
  • Customer Feedback
    • Collect feedback from customers on their experience with your business
    • Offer them a reward as a customer to increase the communication you receive
  • Monitor Social Media
    • Understand the preferences and behaviors of your target audience
    • Identify how customers engage with your brand

How To Activate Customer Data

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

Conduct Customer Research

If you know which users have engaged with your brand or have made purchases, you can reach out to conduct customer interviews. This is a way to activate customer data to uncover new information and insight.

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, an 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.

Paid Media Marketing

You can use data in your CRM to inform machine learning on paid media marketing 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 of 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.

Potential Challenges to Collecting and Using First-Party Data

Some challenges that come along with first-party data collection is making sure that your company has a clear and concise way of organizing the data. Make sure that each stage of the funnel is accounted for and that each audience is clearly defined.

Another problem a lot of companies run into is asking for too much at the wrong time. If a user has no idea what your company is and what they do, there’s a high chance that they will be unwilling to give up too much information. This emphasizes understanding the customer journey and meeting the potential customer where they are at.

Build and Scale Your Own First-Party 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 its 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:

Silverback Strategies

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