With the deprecation of third-party cookies fast approaching in 2023, marketers and advertisers are examining what’s next for their data strategies. Many are currently identifying the available opportunities to continue delivering targeted advertisements and crafting personalized experiences for users.
For several reasons, the leading opportunity for marketers and advertisers today lies with first-party data (1PD):
Read on to discover what first-party data is, why it’s important, and how it creates value for marketing, sales, product, and other business areas.
First-party data is the information a customer provides directly to a company. They may provide their data as part of a purchase, when subscribing to a service, or by joining a social media network – to name one of many possible use cases.
When the customer provides their consent at the collection point, the business becomes the owner of the first-party data.
First-party data helps businesses gain valuable insights from their customers. When matched with a well-thought-out data strategy, teams can activate 1PD downstream to create enhancements for customer-focused features and offerings.
For example, first-party data can equip teams with profound insights that help them develop:
Because data subjects willingly hand over their first-party data, experts consider it to be the highest quality of the three main data types.
Third-party data (3PD), including cookies, originates from sources with indirect relationships with the data subjects. Data aggregators acquire 3PD from thousands of businesses and other sources across the internet.
The advantages of third-party data include enabling your business to reach a broader audience for advertising campaigns. By matching 3PD with your existing database, you can also increase the scope of your audience targeting efforts across digital and CTV/OTT.
That said, the reliability of 3PD can be lower than other types because of how aggregators obtain it. It can be challenging to validate the quality and precision of 3PD, which is its primary disadvantage.
Second-party data (2PD) also comes from an indirect relationship with the data owners. However, it tends to be higher quality because 2PD originates exclusively with trusted partners.
Two or more companies that hold compliant data-sharing agreements will frequently share 2PD to support both partners’ bottom lines.
Businesses may also access 2PD from data marketplaces and match it with their existing database – a trusted strategy to extend the reach of existing 1PD.
Zero-Party Data – an Extension of First-Party Data
Zero-party data (0PD) is a newer term that describes the information a consumer proactively shares with a business. This may include:
You can consider zero-party and first-party data nearly synonymous – with minor differences. While the customer consents willingly and directly to sharing their data in both cases, 0PD is even more precise and detailed than 1PD.
As a result, collecting 0PD from your customer will be a key component of a successful data strategy, especially once cookies are gone for good.
Obtaining first-party data originates with customer trust. If they perceive you’re committed to protecting their data privacy and security, they’ll be more willing to provide it to you.
Earning first-party data also comes down to a value exchange. Customers are willing to provide you with their first-party data in exchange for access to something they need or want. Make your offers compelling, and use your 1PD to continue enhancing your products, services, experiences, and advertisements over time.
Follow these three steps to obtain and make full use of 1PD:
Third-party cookies will be gone by the end of 2023. As marketers and publishers navigate this new landscape and its challenges, our Cookieless World Toolkit can help you understand: