Each of these examples represents a piece of the first-party data puzzle. When brought together and analyzed as a whole, they provide a detailed, accurate, and multidimensional view of your audience. The key to unlocking the full potential of first-party data lies in understanding how to collect, analyze, and utilize this wealth of information to inform your marketing strategies, enhance customer experiences, and drive business growth. Now let’s take a look at different types of data, and what they mean to your digital strategy.
First-party data vs third-party data
As marketers strive to better understand their audience, the distinction between first-party and third-party data becomes increasingly important. These terms refer to the source of the data and can significantly impact its reliability, relevancy, and how it can be used in marketing strategies.
First-party data — as we've established — is data collected directly from your audience. This includes information gathered from your company’s website, apps, social media profiles, customer feedback, and other direct interactions between your business and its customers.
Because first-party data is sourced directly from your audience, it's considered the gold standard of data for several reasons:
Accuracy & relevance: Since it comes straight from the source, first-party data is highly accurate. It offers real, actionable insights about your audience's behaviors, preferences, and interactions with your brand.
Cost-effective: Collecting first-party data doesn't involve purchasing data from other companies. Thus, it is generally more cost-effective, allowing you to reallocate resources to other aspects of your marketing strategy.
Privacy compliance: With increasing privacy regulations and consumer awareness about data usage, first-party data provides a safer choice. It's collected with direct consumer consent, aligning with regulations like the GDPR and the CCPA.
On the other hand, third-party data is information collected by entities that do not have a direct relationship with the user. Third-party data is typically aggregated from various websites and platforms and sold to businesses.
While third-party data can give marketers access to a broader range of insights, it comes with its own set of challenges:
Accuracy & relevance: Third-party data can sometimes lack the accuracy and specificity of first-party data. As it's gathered from numerous, varied sources, it may not always align with your specific audience or business needs.
Cost: Third-party data is usually purchased from data brokers or aggregators, which can become a considerable expense.
Privacy concerns: The usage of third-party data is becoming increasingly scrutinized due to privacy regulations and changing industry standards, such as the phasing out of third-party cookies.
In comparing the two, it's evident that while third-party data can supplement your understanding of customers, first-party data should form the backbone of your data strategy due to its accuracy, relevancy, and compliance with privacy regulations.
We’re heading towards a cookieless world — as Google recently announced the move away from cookies for good at the end of 2024, making third-party data obsolete. This means companies have time to move away from their reliance on third-party data and establish a first-party data strategy that works for them.
What about second-party data?
Second-party data is seen as a more trusted version of data when compared to its third-party counterpart. While third-party data is generally from businesses with no affiliation to your customers, second-party data is seen as more reliable, as it comes from trusted partners and businesses that you have closer relationships with. For example, event organizers sharing audience insights with their sponsors is an example of a partnership that fosters second-party data.
Zero-party data vs first-party data
As the data privacy landscape evolves, new terms and concepts arise, redefining how marketers approach data collection and utilization. Zero-party data, a term coined by Forrester Research, is one such concept that has gained attention. However, to leverage it effectively, it's crucial to understand how it differs from first-party data.
Zero-Party Data refers to data that a customer willingly and proactively shares with a brand. This can include preferences, personal interests, and desires. Unlike first-party data, typically collected through observation of customer behaviors, zero-party data is self-reported by the customer themselves.
Examples of zero-party data can include customers’ responses to surveys or quizzes about their product preferences, their selections when using a 'build your own' feature on a website, or their stated interests when subscribing to a newsletter.
Here's why zero-party data is valuable:
Customer centricity: Zero-party data lets customers tell you exactly what they want, allowing you to cater to their specific needs and preferences.
Transparency and trust: Since customers willingly provide this data, its collection is inherently transparent, helping build trust with your audience.
Accuracy: Zero-party data is explicitly stated by the customer, which means it is incredibly accurate.
Although there's some overlap between first-party data and zero-party data, the key distinction between zero-party and first-party data lies in the method of collection. First-party data is collected indirectly from user interactions, whereas zero-party data is directly offered by the user.
Both zero-party and first-party data have their place in a comprehensive data strategy:
First-party data provides valuable insights into customer behavior based on their actions and interactions with your brand. This data is crucial for personalizing experiences and predicting future behaviors.
Zero-party data allows for an even deeper level of personalization by understanding customer preferences and intentions directly from them. This data can drive customer-centric decision-making and foster stronger relationships with your customers.
In essence, zero-party and first-party data complement each other. Together, they can provide a more holistic view of your customer, allowing for highly personalized, engaging, and effective marketing campaigns. As data privacy continues to take center stage, a strategy that leverages both types of data — collected transparently and responsibly — will be key to succeeding in the evolving digital landscape.
First-party data marketing
Leveraging first-party data in marketing, and more specifically, digital marketing, is about making the most of the rich, accurate, and customer-specific insights provided by this data. Making sure you have collection points at native areas along the customer journey and building customer profiles with this data are critical to using first-party data effectively in your overall marketing strategy. From refining audience segmentation and data management to enhancing personalization, first-party data can substantially elevate your marketing strategy.
First-party data collection
The first step to utilizing first-party data is effectively collecting it. How can you turn new audiences to your digital properties into new customers? Here's how:
|Website analytics||Customer relationship management (CRM) systems||Preference centers||Email marketing platforms||Surveys and feedback forms||Social media analytics|
|Tools like Google Analytics provide in-depth insights into user behavior on your website. This includes pages visited, time spent on site, bounce rates, and more.||A CRM can track interactions with customers across various touchpoints. This includes transaction data, customer service interactions, and engagement with marketing campaigns.||Preference centers provide an easy, natural collection point for customers and website visitors to input data that curates their experience on your site the way they prefer. Anything from dark mode vs. light mode to product preferences can help deliver a valuable experience.||These tools can provide insights into subscriber behavior, including open rates, click-through rates, and engagement with specific content. ||Directly asking customers for information is an effective way of gathering first-party data. Surveys can uncover customer preferences, while feedback forms can provide insights into their experiences.||Social media platforms offer robust analytics that reveal how customers engage with your content, providing valuable first-party data.|
By leveraging these data sources, you can build a rich reservoir of customer data sets. However, remember to be transparent and respect privacy regulations when collecting this personal data.
First-party data activation
Collecting first-party data is only the first step. The real value lies in activating this data, which involves applying the insights to your marketing strategies. Here are some ways to do it:
|Audience segmentation||Personalization||Predictive modeling||Cross-channel marketing||Customer retention|
|Use first-party data to segment your audience based on behaviors, preferences, or demographics. This allows for more targeted marketing efforts.||Use first-party data to deliver personalized experiences. This could include personalized product recommendations, content, or marketing messages.||Analyzing first-party data can help predict future customer behaviors, enabling you to anticipate needs and enhance customer experiences.|| By understanding a customer's behavior across different platforms, you can create seamless, integrated experiences that boost engagement and conversions.||By understanding what makes your customers tick, you can better cater to their needs, increasing customer satisfaction and loyalty (e.g. via loyalty programs)|
First-party data is a powerful tool in the marketer's toolkit. With a strategic approach to collection and activation, it can enable more effective, customer-centric marketing that drives engagement, conversions, and business growth. It's about using data not just to reach your audience, but to understand and serve them better.
Crafting a first-party data strategy
In a landscape where consumer privacy is paramount and personalized experiences are expected, an effective first-party data strategy is indispensable. Here, we’ll delve into the key steps for crafting a robust first-party data strategy that can drive your marketing efforts to new heights.
Step 1: Set clear objectives
Before diving into data collection, it’s vital to set some unambiguous objectives. What do you want to achieve with your first-party data? Common objectives might include improving customer personalization, optimizing ad targeting, or enhancing product development. By understanding your goals, you can focus your efforts on collecting the data that will have the most impact.
Step 2: Identify data sources
Identify the channels and touchpoints where you can collect first-party data. This might include your website, mobile apps, CRM, social media platforms, and customer surveys. Make a list of these sources and determine what types of data you can collect from each.
Step 3: Ensure compliance and transparency
In the current data privacy climate, it’s imperative to handle data with the utmost care. Ensure that you're compliant with data protection laws such as the GDPR, the CCPA, and any other relevant regulations. Be transparent with your customers about what data you're collecting and how it will be used. This can be accomplished through clear privacy policies and cookie consent banners.
Step 4: Implement data collection tools
Utilize tools and technologies that can help you effectively collect first-party data. Web analytics, customer interaction data, and user preferences are all data sets that your organization needs to collect in order to take advantage of first-party data.
Step 5: Data segmentation and analysis
Once you’ve collected your data, segment it into meaningful groups. This might be based on demographics, behavioral patterns, or customer preferences. Analyze these segments to glean insights that can inform your marketing strategies. Look for patterns and trends that can help you understand your audience on a deeper level.
Step 6: Activate your data
This is where the rubber meets the road. Apply the insights you’ve gathered to your marketing initiatives. This might mean personalizing email campaigns based on past purchase history, optimizing your website based on user behavior, or using customer feedback to inform product development. Ensure that your actions are aligned with the objectives you set at the outset.
Step 7: Monitor and optimize
A first-party data strategy is not a set-it-and-forget-it endeavor. Continuously monitor the performance of your initiatives and look for ways to optimize. Are your personalized emails driving engagement? Is your ad targeting resulting in higher conversion rates? Use KPIs and metrics to measure success and make data-driven optimizations.
Step 8: Maintain data hygiene
Regularly scrub and update your data to ensure it remains accurate and relevant. Stale or outdated data can lead to misguided decisions. Set a regular schedule for data maintenance and stick to it.
Crafting an effective first-party data strategy involves clear objectives, careful data collection, and the savvy application of insights. In an era where consumer expectations and privacy regulations are evolving, first-party data is a treasure trove of insights that can help marketers create meaningful, engaging, and compliant customer experiences.
Benefits of first-party data
As we've explored, first-party data is an invaluable resource for marketers. But to truly appreciate its significance, it's essential to look at the specific benefits it brings to your marketing efforts.
1. Improved personalization
First-party data provides detailed insights into your customers' behavior, preferences, and needs. This allows for high-level personalization, from tailored marketing messages to customized product recommendations. Personalization, in turn, can enhance customer experiences, engagement, and loyalty.
2. More accurate targeting
With first-party data, you can create precise audience segments based on actual customer behavior and attributes. This enables more accurate targeting and retargeting, allowing your marketing efforts to reach the right people with the right messages.
As first-party data is collected directly from your customers – it doesn’t involve the costs associated with purchasing data from third parties. This makes it a more cost-effective choice.
4. Greater customer loyalty
By using first-party data to understand and cater to your customers' needs, you can build stronger relationships with them. This can result in greater customer loyalty and, ultimately, a higher customer lifetime value.
5. Enhanced predictive capabilities
First-party data can be analyzed to predict future customer behavior and trends. This allows you to anticipate your customers' needs and preferences, enhancing your ability to offer timely targeted ads, relevant products, services, and content.
6. Better product development
Insights from first-party data can guide your product development process. Understanding what your customers value, their pain points, and their desires can help you create products that truly meet their needs.
7. Privacy compliance
First-party data is a safer choice in an era of increasing data privacy regulations and growing consumer awareness. It’s collected with the user's consent and is therefore more compliant with privacy laws and regulations.
In an increasingly data-driven world, first-party data isn't just a nice-to-have — it's a must-have.
How can OneTrust help?
OneTrust Consent & Preferences can help your organization start your first-party data journey with a holistic solution that provides your users with a privacy-first, value-added experience. From data collection, activation, and delivering personalized experiences, OneTrust powers your marketing organization throughout this journey.
Design tailored, interactive interfaces that guide customers throughout their engagement on your digital properties. Gradually collect user data to refine their profiles, which allows for the delivery of personalized content and encourages customer loyalty.
Set up personalized trust centers to empower customers with more access and understanding of their data. Pre-designed, professional templates enable dynamic content posting for an enhanced user experience.
Consolidate and align your customer's consent and preference information through the use of ready-made integrations. These integrations are compatible with both modern SaaS and older software systems, enabling seamless data synchronization across various third-party marketing technology tools.
Enhance your data gathering approach with instantaneous dashboards and analytical tools that align with your business KPIs. Continually update these tools for consistent refinement and improvement.
To learn more about how your organization can get started with a first-party data strategy, download our first-party data checklist today.