The First-Party Data Marketing Guide
The transformation took place seemingly overnight. One day, marketers were using third-party cookies to target prospects and customers; the next, regulators and advocates were championing data privacy and enacting legislation like the European Union’s General Data Protection Regulation.
Then, Big Tech companies like Alphabet (Google’s parent company) and Apple said they too would uphold consumer rights and end their support of third-party cookies. (Third-party cookies collect consumer data from various online sources and sell the data to companies that then use it for advertising.) Suddenly, articles lamenting our cookieless future began to proliferate, with many offering solace via zero- and first-party data.
It’s a solid recommendation. According to Boston Consulting Group, organizations that incorporate first-party data into key marketing functions see their revenue rise by up to 3x while also improving cost savings by 1.5x. Simply put, first-party data offers the highest return on investment (ROI) for all data types.
But what exactly is first-party data, and how might marketers best use it to their advantage? The following sections answer these important questions and more.
What is first-party data?
First-party data is information that an organization owns and collects from its audiences with their consent. Also known as 1P data, it’s gathered via software and systems that a company owns, such as its website or mobile app. Examples include:
- Call-center interactions
- Purchase history
- Profile information, such as name, email, and address
- Responses to surveys
- Newsletter subscriptions
Such customer data is important because it’s information about audiences that originates from their interactions with a brand across multiple touchpoints in real time and historically. Instead of working with lookalike audiences and behaviors logged weeks or months ago, organizations can make decisions based on current information from actual customers and prospects, allowing them to serve the right message at the right time to the right person.
How do you use first-party data in marketing?
Before answering how marketers can use first-party data, let’s recall why it’s now receiving so much attention: concerns over data privacy. So, before taking advantage of the many benefits that first-party data offers, be sure your organization complies with all regulations, and audiences have been given the opportunity to consent to your data collection efforts.
After all, a trust gap between consumers and brands still exists. Don’t trade brand equity, which can take years to earn, for ill-gotten data. Acquired responsibly, first-party data can nurture customer relationships, better retain existing customers, and improve numbers across various metrics — return on advertising spend (ROAS), web traffic, app downloads, items sold, and so on.
Let’s take a closer look at the ways first-party data can enhance your marketing.
Define your audience
Perhaps the greatest gift of first-party data is its ability to tell organizations exactly who their existing audiences are. Second guesses, gut feelings, anecdotal stories about who does business with your company — all of it can be checked against cold, hard data.
What’s more, the data is unique to your organization. Competitors can’t replicate it because they can’t access it. They don’t know who subscribed to your newsletter, how your audiences respond to online discounts, whether men or women make up the bulk of your customers — you get the picture. First-party data tells organizations who their audience is.
Sometimes the results are surprising, or they confirm the personas your marketing team had envisioned about the organization’s audiences. Whatever the results, first-party data offers a clear picture of who your audiences are, and it can inform subsequent business decisions, such as how to hone messaging so your products or services attract more of the types of people already drawn to your organization. Or, if the customers you do have aren’t who you were targeting, then maybe it’s time to rejigger your strategy to draw the customers you do want. Either way, the value of first-party data can’t be ignored.
Understand the customer journey
First-party data also sheds light on the customer journey.
Say a customer creates an online account to receive a discount on their first purchase. They then click multiple pages on the site but return to just two product pages repeatedly. Next, they download the company’s app and revisit the two items they viewed while on the company website. This behavior presents an opportunity for the company to send a welcome email that prominently features the two items that continue to catch the customer’s eye.
When organizations can track the path a customer took to conversion or where they stopped short of making a purchase, then businesses can revise their tactics and strategies to boost their conversion rate.
For instance, a retailer may discover that in-store events at a particular location attract fewer sign-ups — but sales there always outperform those of other locations for the same type of event. What is it about that one store that produces a high sales volume?
Or perhaps there’s a certain page in the checkout process that causes customers to consistently abandon their virtual carts. What gives? Is it the wording, the load time, or . . . ?
Again, by better understanding not just the customer but their journey towards conversion, organizations can investigate troublesome areas and tweak their approaches to achieve more desirable outcomes.
Customize your marketing
Knowing who your audience is and how their buying journey unfolds allows you to design more personalized customer and brand experiences. Unique identifiers, such as individual interests and purchase history, as well as behaviors like communication preferences or return history, help organizations mold their marketing to individuals, not generalized groups.
Indeed, consumers crave that personalization. According to the McKinsey Next in Personalization 2021 Report, 71% of consumers expect personalized interactions from brands. And a greater percentage — 76% — get frustrated when those expectations aren’t met.
Organizations are paying attention, because those that incorporate personalization into their efforts report a 10–15% lift in revenue. Companies that see that rise — McKinsey calls them “digital natives” — also say they notice better customer outcomes, like more sales from customers in loyalty programs.
CDP: the missing piece
The significance of first-party data may be skyrocketing, and organizations may be collecting more and more of it, but that doesn’t mean they’re able to take full advantage of it. Often, the data lives in disparate systems owned by different departments.
The sales team, for example, likely uses a CRM to add information about leads, while the finance team monitors returned purchases and churn through other software. Customer insights for each team are probably limited to a single channel or system. Instead of seeing the buyer journey holistically, the team understands just one part of it even as volumes and volumes of data stream in from an ever-growing list of sources.
Moving away from that data chaos requires powerful technology like a customer data platform. A CDP gathers all the customer data that teams companywide may hold across channels and systems and unifies it, giving organizations a single source of truth about their audiences. By analyzing zero- and first-party data, as well as third-party data for those who still use it for their marketing, CDPs build comprehensive 360° customer profiles that update in real time.
Some CDPs, like Acquia CDP, use a built-in identity resolution engine (IRE) to ensure these profiles result from “clean” data. Customer data that’s “dirty” will be outdated, inaccurate, incomplete, or contain duplicates. An IRE scrubs customer information of these deficiencies so marketing efforts are on target. There’s nothing more annoying than receiving three of the same email from a company because it failed to realize that Billie, Billie Jo, and BJ were one and the same — but it might have if it had a CDP that would have noted that all three names shared one email address.
Leave such marketing snafus behind and explore what a CDP can do for your organization and its first-party data. Download our free e-book today: The Evolution of Digital Experience in a Cookieless World