The end of third-party cookies has been one of the most significant internet disruptions of recent times. The progression of GDPR, Google’s decision to move away from third-party cookies, and the introduction of CCPA show that the focus on data is only becoming more intense as concerns over data privacy mount.
Organizations also need to pay attention to customer sentiment as almost 69% of customers are concerned about how personal data is used and collected. The rising 2aqconcerns about how data is being collected and used and government bodies stepping in to regulate the same are making first-party data more critical in the business priority list.
These events are compelling organizations to rethink their data collection strategies and demand the acceptance of the new reality – that the shift from third-party data to first-party data is now a business imperative.
The Importance of First-Party Data
Headlines like “use first-party data, or die” can sound dramatic and appear like the harbingers of doom. Marketing and customer engagement strategies have long relied heavily on third-party data for effective targeting. While it might not be a life or death situation, the use of first-party data can mean the difference between failure and success in the years ahead. First-party data is now positioned as the most valuable form of data since it is perhaps one of the most accurate and detailed forms.
Privacy concerns around first-party data are minimal since the user knowingly provides this data as a cognizant action. Third-party data, on the contrary, is purchased from or leveraged from an outside source and hence raises more data privacy concerns. While using third-party data for marketing has been the norm for a while, research points out that those using first-party data for crucial marketing initiatives witnessed a revenue increase of almost 2.9 times versus companies that didn’t. They also managed to save approximately 1.5 times in cost.
Developing the capabilities to collect quality first-party data can help organizations complement, enhance and reduce the need for other data types.
The focus on developing capabilities to collect and leverage first-party data also becomes essential since this proprietary form gives marketers granular insights into customer base demographics, overall interests, values, direct behavior, etc.
According to their profile, first-party data helps organizations drive better personalization based on customer actions. Collecting and analyzing first-party data can also help organizations improve marketing and advertising campaign relevance score, attain better match rates and strengthen their returning customer base.
Some examples of first-party data include audience demographics, user interests, time spent on site, location of users, number of visits, etc. While some of this data can be readily available from applications such as Google Analytics, businesses wanting to reach a wider audience can find it challenging to scale data strategies. So, what can organizations do to scale their first-party data strategies?
Tech leads the way
The shift from third-party to first-party data demands that organizations accelerate their data collection capability. While the value of direct engagements to collect first-party data will only increase, organizations need to proactively make the right technology investments that will help them connect multiple touchpoints that build meaningful customer connections.
Evaluating the existing technology capability to capture first-party data, identifying ways to maximize value from this data, and assessing how the data is stitched together to get a more profound and more comprehensive, 360-degree view of the customer becomes crucial capabilities to develop.
Integrate various online and offline data sources – advance omnichannel measurement
Integrating online and offline data sources becomes crucial for a robust first-party data ecosystem. A comprehensive data platform that allows organizations to integrate various online and offline data sources to provide a uniform, complete and 360-degree view of the customer becomes essential. With this capability in place, organizations can drive impactful programmatic advertising and align their marketing efforts to deliver more impactful interactions with the customer.
Integrating disparate data sources and connecting data from all channels also provides insights into improving omnichannel success measurement. With these insights, organizations can see, for example, how a customer moved from a web to an app and then progressed to complete the purchase in-store. A clear view of this process and the variants help organizations create better customer segmentation, optimize interactions, and guide behaviors that lead to conversion.
Enabling first-party data scalability
Driving opportunities in the cookie-less era also demands a disciplined and governance-driven approach to collecting first-party data and making it scalable. Since first-party data is not scalable on its own, this makes the use of the right technology and data platforms that seamlessly collect and merge multiple data streams to provide comprehensive insights to drive better marketing outcomes.
Enhancing technology capacities and developing the capabilities to bring data from first-party, second-party, and third-party sources and layer it with audiences’ content consumption patterns can help scale first-party data. The insights generated from this data can then be leveraged to create personalized and targeted campaigns to drive more excellent brand value.
First-party data helps organizations create more accurate intelligence to tailor messaging and define customer experience. The absence of a data-science-backed data platform can make building comprehensive data strategies, integrating data across platforms, identity resolution, and building profiles gargantuan tasks. As the value of data depletes fast, leveraging comprehensive data platforms that deliver insights swiftly to the relevant stakeholders and help organizations leverage opportunities before they cross becomes a critical capability to drive elevated outcomes.