What Is First-Party Data?
First-party data is data that your company has collected directly from your audience, which includes existing customers and visitors to your site. The data itself might be drawn from sources such as customer feedback, surveys, or behaviors observed on your website. First-party data is considered extremely reliable because it’s coming straight from the source: your own audience.
Why Is First-Party Data So Important Now?
There are two reasons first-party data currently carries a lot of weight:
- For one, first-party data helps businesses create more personalized customer experiences. Consider what happens when you keep returning to Amazon to shop. Amazon uses the data it has collected about you to recommend similar products you might like. With so many people shopping online now, online commerce websites are feeling more pressure to stand apart from one another by personalizing their shopping experiences—and ensuring that the recommendations they make ring true. First-party data helps them do that.
- Google and Apple have been making sweeping changes that are pressuring marketers to put more focus on their first-party data. Google especially is making it harder for marketers to collect information about consumers via third-party data — that is, data drawn from sources outside a brand’s own website. How are they doing that? By eradicating third-party cookies, which businesses traditionally have used to collect third-party data informed by consumers’ browsing habits across the web. The sea of change began more than a year ago. In an effort to protect consumer privacy, Google went public with its intent to phase out third-party cookies from the Chrome browser. A year later, the tech behemoth upped the ante, stating that it would not build alternative tracking technologies — or use those developed by other companies — to replace the ousted third-party cookies. This forced shift away from reliance on third-party data, which has burnished the value first-party data brings to the table.
What Should Marketers Do?
How to proceed in this new environment? Learn from each other! Consider these examples of marketers reaching out to customers and maximizing the effectiveness of first-party data:
One way the company fosters this connection: through contact data people provide when they sign up for loyalty programs or newsletters. A “Ranchology” program for Clorox’s Hidden Valley Ranch food products, for example, shares recipe ideas with consumers in exchange for their email addresses. It’s not a new strategy, per se, but these efforts take on even greater importance now that third-party cookies are off the table.
- General Motors Co.’s Cadillac, meanwhile, is partnering with entities like our sister agency Merkle, and advertising technology company VideoAmp. Cadillac’s mandate for these tech vendors? To help the brand draw conclusions by matching first-party data with privacy-compliant resources like publicly available automotive purchase data.
- In yet another arena, skincare quizzes, distributed through online influencers, have helped beauty brand Bliss build relationships with its audience. Bliss has also created a community by establishing a presence on TikTok. Creating community is, in fact, key: as Tina Pozzi, the chief brand officer at Bliss notes, brands need to truly understand their audience before they can develop effective outreach in a cookie-less world. She says, “Ultimately this will be about understanding the consumer first and building that first-party data to augment our targeting strategy.”
- Finally, in a Bacardi campaign launched last October, the gin brand sent out promotional emails and Instagram ads offering perks such as drink recipes and early access to new products. The recipients of this largesse? Approximately 10,000 anonymized identities of individuals who had visited the brand’s website or distillery. The strategy paid off, with click-through rate coming in about 9 percent higher than the rate engendered by old-school targeting methods — such as using data from third-party sources.
Put Tools to Work — and Keep Learning
Finally, it’s important to:
- Stay abreast of tools that technology companies are developing to help businesses manage first-party data more effectively. For example, at the 2021 Adobe Summit, Adobe announced the industry’s first consumer data platform (CDP) built for first-party data. The Adobe Real-time CDP helps brands activate known and unknown customer data to manage the entire customer profile and journey in one system, without the need for third-party cookies.
- Stay up to speed on how the topic is evolving. There’s a wealth of thought leadership out there to help businesses understand how to capitalize on the value of first-party data. The recently published dentsu report The Cookieless World is one excellent example.
To ensure that your brand builds more personal experiences based on first-party data, contact Isobar.
This piece was originally published in Isobar's The Squeeze.