First party data is crucial for marketing as it can help you learn about your audiences and hone your targeting, helping you reach the right people at the right time.
In this blog post, Tyler Kollenborn, Ignite Visibility’s VP of Data, Analytics, & Insights, will explore first-party data and how you can use it to elevate your marketing efforts.
What You’ll Learn:
- What Is Audience Data?
- Evolution of Media Targeting Towards Privacy
- The Current State of Third-Party Cookies and Privacy Concerns
- Future of Data Usage in Marketing
- Best Practices for Maximizing First-Party Data
- Why You Should Use Data-Driven Audience Personas
- First-Party Data FAQs
My Expert Opinion on First Party Data
As major platforms limit third-party cookies, it’s become increasingly important to utilize valuable first party data. While we likely won’t lose cookies for a while, particularly with Google, which has decided to hold onto third-party cookies to the relief of marketers everywhere, you should also know how to implement a strong first party data strategy to help you get the most from your campaigns.
I recommend using a combination of first-party, second-party, third-party, and zero-party data to connect with your target audiences. A comprehensive strategy employing each of these can help with everything from personalized messaging and advertising to lead capturing and conversion.
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.
There are 4 types of audience data: first-party, second-party, third-party, and zero-party. Each of these types of audience data is collected in different ways and serves different purposes.
Before we go any further, let’s define each type and explain how they’re collected.
What is First-Party Data?
What is first party data, exactly? First-party audience data is the information you receive directly from your audience. It includes demographic information, audience behavior, and estimated preferences. Some examples include CRM data, subscription information, and behavioral data from your websites and apps.
Third-party cookies might still be around, but first party data is just as important to collect when learning more about potential and existing customers. It’ll also be instrumental in replacing third-party data if it ever winds up entirely phased out.
It is collected through passive observation of behavior on your website, cookies installed on your visitors’ browsers, and code installed on media assets.
It is mainly used for advertising, landing page optimization, customer experience optimization, and retargeting. An estimated 87% of firms use first-party audience data as their primary source of information collection, making it the most popular of the 4 types of audience data.
Types of First-Party Data
There are a few main types of first-party data to consider. Let’s break them down:
- Transactional: Data including information about customer subscriptions, purchases, and offerings that appeal to audiences.
- Behavioral: Data about people’s behavior, such as how they interact with your website, social media channels, mobile apps, and other points of contact with your brand. For instance, you might measure metrics like clicks and comments to gauge audience behavior.
- Relational: Through a customer relationship management (CRM) platform, you can collect first party data around demographics, names, preferences, and other customer information to help you personalize the customer experience.
Using a variety of first-party data, you can maximize its effectiveness in a holistic marketing strategy.
What is Second-Party Data?
Second-party data comes from a credible partner.
Since you work directly with the data collectors, you can trust that the data is accurate. Second-party data normally consists of things like consumer research, social media behavior, and internet activity.
Examples of second-party data include social media analytics and info bought from data marketplaces. It is often used in tandem with first-party audience data, to achieve more accurate advertising, and to help brands get a better understanding of their target audience.
When second-party data is combined with first-party audience data, it 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.
It includes information such as demographic information and visited websites. Marketers use third-party audience data to help them reach a broader audience and narrow down their targeting efforts.
These aggregators don’t collect their data directly. Instead, they get it from other companies and compile it into a single report. They often get their information from customer surveys, feedback forms, and client interviews.
Most third-party data comes from advertising service demand-side platforms (DSPs). Certain marketplaces also sell 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. In fact, 46% of companies use both third-party and first-party audience 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 audience data. Compare this to first-party data collection methods like behavior data, where customers share info more passively.
Zero-party data is great because it requires no analysis. Your audience has provided you with the exact information you were looking for. This type of audience data includes things like customer feedback forms, email surveys, preference questions, and communication preference questions.
Examples of zero-party audience data include product preferences, communication preferences, communication information, and brand perception. It provides insight that can be used for content personalization, boosting engagement by understanding individual preferences, and 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 Current State of Third-Party Cookies and Privacy Concerns
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 you’ll see related ads following you around online after you’ve browsed for certain products or services.
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 audience data will also become increasingly important. Zero and first party audience data requires consent, and therefore, isn’t seen as a violation of privacy.
Ultimately, solutions like first party data in marketing will help overcome the various challenges that current restrictions bring, such as maximizing data accuracy, integrating data across systems, and keeping sensitive data secure.
As the future of data develops, we’re likely to see various changes in regulation due to advancements in artificial intelligence (AI), machine learning (ML), and other technologies that could compromise data. For instance, an AI Bill of Rights proposed in 2022 would require AI developers to “minimize” data and only use what they need for each context of data collection.
By using first party data, you’ll equip your marketing to maintain compliance with changing restrictions and regulations while effectively connecting with your customers.
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, especially the 23% of companies that are 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.
Best Practices for Maximizing First-Party Data
Don’t worry. When it comes to collecting reliable and relevant audience data, all hope is not lost. Here are three other strategies that you can use.
1. Gather Conversion Data from Around the Web
Your Google Analytics conversation data should be one of the first places to look for audience data. You can learn a lot when you look at your demographic, technology, different channel, and Google Analytics benchmark reports to learn more about what type of customer is converting from your website the most.
Once you know who is resonating with your product the most, you can use this audience data to refine who you’re targeting with ads.
2. Pay Attention to Platform Level Data
All of your social media platforms are going to give you some insight into your preferred audience and how they are consuming your content. If you post most of your content on Facebook, check out the Meta dashboard. Do you depend more on Instagram? Check out Instagram’s analytics.
Don’t forget to take a look at your followers, too. You can learn a lot about your audience by analyzing your followers and those who interact with your accounts the most.
A lot of website builders and hosts, like SquareSpace, also will provide you with platform-level data that you can use. If you’re a premium Google partner, they will give you access to geographic data, category data, and general information about your customer.
3. Utilize Google Trends & The Breakout Search Report
Google Trends is another great place to access quality audience data. Your Breakout Search Report, specifically, will show you all of the action around your top keywords. It’s also going to show you which keywords are going up and going down, which is great information to have for SEO purposes.
4. Use Tag Diagnostics and CMP Setup
To help make the most of first party data for marketing, Google is introducing two new tools, including Tag Diagnostics and Consent Management Platform (CMP).
Tag Diagnostics can indicate your account’s health and potential problems with data measurement, with some added guidance on how to resolve issues with Google Analytics, Google Ads, and Google Tag Manager.
Meanwhile, CMP can help with consent banner generation and the use of consent mode for Tag Manager, Google Ads, and Analytics. It also allows for integrations with Cookiebot and other consent management partners.
5. Segment Your Data
Based on the data you collect, you can segment it into different subtypes. For example, you might segment data according to certain demographics and behaviors. Doing so could help you group different audiences together in a first-party data strategy.
6. Personalize the Customer Experience
Based on the segmented data, you can then personalize your marketing materials to connect more effectively with each segment of your audience. This level of personalization can establish a stronger relationship with new and existing customers.
7. Engage in Ethical Data Usage
Only use the data you need to help optimize your marketing efforts with an ethical first party data strategy. In the process, you should inform users of the kind of data you intend to collect and how you’ll use it on your website and other platforms.
8. Maintain GDPR/CCPA Compliance
In remaining ethical with your data usage, you must comply with General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Learning more about these regulations will help you avoid potential legal issues associated with data collection.
Why You Should Use Data-Driven Audience Personas
The best use of all of this audience data that you’re collecting is to create data-driven audience personas. These personas will help your entire company – from your paid ads department to your copywriting team – understand who it is that you want to target.
Since these personas derive from actual audience data, you can rest assured that your marketing team is targeting the correct audience – people that will buy your product or service and engage with your content. Because what is the point of creating incredible content if the wrong people are reading it?
First-Party Data FAQs
Next, we’ll answer the most common questions we receive about first-party data.
1. 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.
2. 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.
3. 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.
4. Can You Retarget With First-Party Data?
Yes, you can retarget visitors with first-party data. In fact, many companies often do this. You’ll notice that often after visiting a major brand’s website, you’ll see their ads following you around.
5. Why Is First Party Data Important?
As more restrictions around data collection and third-party cookies arise, you’ll want to use more first-party data to help you collect and use meaningful data while remaining compliant with today’s tightening regulations.
Harness the Power of First-Party Data With Ignite Visibility
Want to successfully implement a first party data marketing strategy? Ignite Visibility can help with a comprehensive solution that works for you. From search engine optimization to email marketing, we’ll develop a strategy using this critical data.
With the help of our experts, you can:
- Use tools like Google Analytics to collect valuable behavioral data
- Collect transactional data from your website and other platforms
- Use a CRM platform to gather relational data
- Use the data collected to segment audiences
- Personalize your marketing materials using segmented data
- And more!
Reach out to us today to learn more about what we can do for your marketing efforts with first-party and other data.
