Successful marketing is data-driven.
It relies on a constant stream of fresh, reliable data to guide its every decision. And no data is more relevant to your success than first-party data.
In this article, you’ll learn what first-party data is and how it compares to other data types. You’ll also learn how it will shape marketing in the future.
Key Terms to Understand
First-party data exists in several related data types. Understanding its importance means understanding the terms surrounding it.
What is Audience Data?
Audience data is detailed information on how your target audience behaves online. It’s a combination of several sources coming together to form a complete picture.
Audience data includes information like:
- Hobbies and interests
- Demographics (age, location, etc.)
- Stage of the sales funnel
This information lets you create marketing campaigns tailored directly to your audience.
What is First-Party Data?
Marketing first-party data is information you get from your audience and clients. Understanding it usually takes some analysis.
- CRM data
- Subscription info
- Behavior data from your websites and apps
It’s the most popular form of data, with 87% of firms using it as their primary source.
What is Second-Party Data?
Second-party data comes from a credible partner. You work with them directly, so you know the data is accurate.
Examples of second-party data include social media analytics and info bought from data marketplaces. Combining this data with first-party allows you to build ultra-accurate predictive models—especially if you deal with a smaller clientele.
What is Third-Party Data?
Third-party data comes from data aggregators.
These aggregators don’t collect their data directly. Instead, they get it from other companies and compile it into a single report.
Most third-party data comes from advertising service demand-side platforms (DSPs). Certain marketplaces also vend third-party data, like Neilson and Acxiom.
Because they compile multiple datasets into a single report, the original demographics aren’t always clear. There’s also no guarantee aggregators collected it according to privacy regulations like GDPR.
That’s why third-party data is most effective when enhanced with first-party data. 46% of companies use both third-party and first-party data equally.
What is Zero-Party Data?
Zero-party data is information that customers intentionally and actively share with a brand.
It’s similar to first-party data, but the customer fully understands they’re sharing data. Compare this to first-party data collection methods like behavior data, where customers share info more passively.
In other words, zero-party data requires no analysis.
An example of zero-party data would be personal preferences entered through a form. For instance, a delivery app asks customers what kind of food they like when registering.
First vs. Second vs. Third vs. Zero-Party Data
Next, we’ll compare the differences between each data type.
How is it Collected?
- Passive observation of behavior on your websites and apps
- Cookies installed on visitors’ browsers
- Code installed on media assets
- Purchased from a reliable source. Quality, accuracy, and compliance with privacy laws are assured.
- Obtained from a data aggregator compiling data from several sources
- The aggregator may enhance this information with surveys, feedback forms, and interviews
- Customer feedback forms
- Email surveys
- Preference questions (ex. “What’s your favorite type of food?”)
- Communication preference questions
What Data is Collected?
- Estimated preferences
- Consumer research
- Social media behavior
- Internet activity
- Demographic info (age, location, education, etc.). The sample size is usually random
- Visited websites
- Product preferences
- Communication preferences
- Contact information
- Brand perception
How is it Mainly Used?
- Landing page optimization
- CX optimization
- Enhancing first-party data
- More accurate advertising
- A better understanding of the target audience
- Reaching a broad audience for advertising
- Enhancing first-party data for better targeting
- Content personalization (emails, user experience, etc.)
- Boosting engagement by understanding individual preferences
- Improving products and services
Evolution of Media Targeting Towards Privacy
In response to intrusive tracking by advertisers, we’ve seen a huge shift toward protecting user privacy. In a bid to protect consumers, companies like Google, Apple, and Amazon have made life increasingly difficult for marketers.
Many skeptics see this privacy shift as a disguised effort to restrict competition. But the bottom line is the same: your company needs to navigate these changes effectively.
Here are the biggest privacy-related issues marketers face this year:
The Demise of Third-Party Cookies
Modern advertising is hugely dependent on third-party cookies.
Marketers install them on users’ browsers to track their behavior after they leave their websites. That’s why—after browsing certain products—you’ll see related ads follow you around online.
For many, this represents a blatant violation of user privacy. Most consumers don’t understand what third-party cookies do, so they can’t fully consent to be tracked by them.
That’s why regulations, ad-blockers, and browser developers have increasingly restricted them.
Google plans to phase them out from Chrome in 2024, a move many see as the abolition of third-party cookies. Mozilla’s Firefox and Apple’s Safari have already done this.
This will change targeted advertising, but it won’t end it. Instead, targeting will shift to anonymized interest-based ad networks like Google’s FLoC.
First-party data will also become increasingly important. First-party—and zero by extension—requires consent.
Third-Party Data Restrictions
Some companies want to take user privacy further by banning all third-party tracking on their platforms.
The most notable example is Apple’s ban on third-party tracking without consent. App users must now explicitly agree to let companies track them, which only 20% do.
As iPhones make up 53% of all American smartphones, this is a major blow to marketers wanting data on mobile users. Marketers should expect policies like this to continue as consumers demand more privacy.
This will spell trouble for the 23% of companies still dependent on third-party data.
Future of Data Usage in Marketing
As third-party sources face increasing restrictions, first and zero-party data hold increasing importance. Data-driven marketing isn’t going anywhere, but it’s changing.
Sketchy, unethical tactics will find a stage exit in the future’s marketing. Meanwhile, consent will play a lead role.
Consumers will generally always understand how companies are using their data. Companies will ask to track users explicitly or collect it in such a way that requires consent.
For instance, consumer surveys will become increasingly common. Companies will use products like Nicereply to make informed data collection easier for consumers.
First-Party Data FAQs
Next, we’ll answer the most common questions we receive about first-party data.
How Does First-Party Data Differ From Zero-Party Data?
Zero-party data is similar enough to first-party that some marketers consider it unnecessary. But there’s a crucial difference between the two: necessary consent.
First-party data collection occurs without the user being aware of it. Companies use session recording, device analytics, and other analytics to collect data passively.
There’s no third-party involved. But users don’t realize the site or app is recording their behavior.
However, zero-party data requires consent. Feedback forms, email surveys, and preference questions imply that the receiving company will use that data in some way.
Do Companies Sell First-Party Data?
Companies can sell first-party data following local privacy laws. However, companies that value customer privacy won’t and only use it for their services.
Is First-Party Data Collected From Outside Sources?
By definition, you can only collect first-party data from your sources (websites, apps, etc.). Data obtained from outside sources is second or third-party.
Can You Retarget With First-Party Data?
Yes, you can retarget visitors with first-party data—something companies do often. This is why visiting a major brand’s website often results in their ads following you around.
First-Party Data is the Future
While second and third-party data sources face increasing uncertainty, first-party remains unthreatened. By collecting your own data, you’re safe from privacy laws and shifts in consumer behavior (like using ad blockers and privacy browsers).
If your marketing relies on third-party data, act fast before tracking bans cripple your advertising efforts. First-party data is higher quality, more accurate, and privacy-compliant.
While moving away from third-party dependency takes effort, it’s an investment in your business’s future.