With a cookie-less future looming, it’s natural for marketers and brands to prep themselves for alternate digital marketing strategies. We’re talking about activating brands’ first-party data. This valuable, high-quality information is collected directly from audiences or customers with explicit consent, thus, comes with little to no privacy concerns.
First-party data includes information from behaviors, actions, and interests demonstrated by your website visitors or app users. It also refers to the data in your CRM, subscriptions list, and data from social media platforms. First-party data can also include offline sources like surveys, customer feedback, and other means.
This is a precious resource for marketers and brands, as it could become the very foundation of their future digital marketing campaigns. This could help them reach out to the right people with desired information, relevant advertisements, targeted communications, and much more. That, in turn, will boost sales and generate better ROI on campaigns. But if done poorly, it can result in high expenses, low ROI, and irritated people who skip your ads. Thus, it’s essential to know how to use first-party data correctly to achieve the desired results. Let’s look at some pointers on what marketers can and can’t do with first-party data.
What You Can Do with First-Party Data
Gain Audience Insights
The primary use of first-party data is to gain insights into your audiences. Even if the audience is small, you can learn a lot about different facets. That includes the traits they have in common with each other. Then you can slowly grow different audiences by adding new parties who have the same interests and characteristics. Using the data, you can create different audiences based on complementary traits. That helps create separate groups for A/B testing, too. You’ll improve your insights overall.
Predict Future Patterns
First-party data is known for its validity and relevance. That allows marketers to use it to predict future patterns, especially audience behavior, accurately. For instance, let’s say your data reveals that a specific user has been visiting websites about buying owl jewelry. They’ve even placed a few pieces in their shopping cart. That information tells you this person may purchase owl jewelry in the future, too. If you have a jewelry business or sell accessories, this can be helpful for you.
Here’s another way you can assess your audience’s behavior. Your data can also reflect if an individual is avoiding video ads but clicking on banner ads. That hints that this person prefers banner ads. You should now send those kinds of ads their way to boost interaction. This will ensure you have better results in your marketing efforts.
Helps You Personalize Your Content
First-party data gives you improved insights into your audience’s interests and needs. You can determine what they’re into – fashion, sports, music, art, nature, science, health, and fitness. That helps you create more personalized communications and messaging. An example of this would be creating an inbound marketing strategy, where you want to send out newsletters about several topics related to your brand. By observing data about the content your audience had viewed in the past, you can guess their interests. Is this one brand conscious? Or are they more into sustainable products? Using this, you can send them the relevant newsletters.
What You Can’t Do with First-Party Data
It Doesn’t Give You the Whole Picture.
With all these great uses, marketers and brands must be wary of thinking that this is all the information they’ll need. This data doesn’t give the whole picture. Yes, information such as name, gender, age, location, and basic details can be collected. However, customers won’t mention other important information, such as the size of their family, what other products they purchase regularly, and which ones they aren’t happy with.
Even if a brand can gather all that information, there’s still the possibility of gaps in the data. What’s worse is that you won’t even be able to identify these gaps. That can lead to brands making incorrect assumptions about their customers.
For example, one agency worked with a particular brand selling certain products directly to their customers. They were also selling products in partner retail stores. They found that only when they’d added supplemental data could they get a clearer picture of their customers. The agency discovered that the customers who’d only made purchases during sales and discounts and actively wrote product reviews preferred buying their wares from physical stores to feel the product. The agency then used these insights to create an entirely different messaging in several of its campaigns. They reported an increase in sales after this.
Not Everyone Can Scale First-Party Data
CPG brands who sell their products primarily through physical retail outlets could find it tougher to scale their data. Their ability to collect customer data is limited, as they may not own the touch points. To add to this, many customers aren’t comfortable sharing their data unless they see a direct benefit. Otherwise, they fear being relentlessly inundated with irrelevant ads and messages. Therefore, even large brands struggle to collect sufficient first-party data to build accurate and robust customer personas.
Many companies will still rely on third-party data to build robust customer profiles. But it’s going to be harder to do unless they expend tremendous energy to stay thoroughly compliant with privacy laws. Marketers and brands need readily available privacy-compliant data points at their disposal. That will give them a birds eye view of their customers and help build strategic audiences to reach out to. By using a good combination of first-party and third-party data, agencies and brands will be able to reach the right people, in the right way, with the right message.
If you want to know more about first-party data and how the new privacy laws affect your brand, reach out to us.