First-party data: What, why and how?

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First-party data isn’t new, but more and more companies are looking at how they can use it as the marketing world moves towards a cookie-less future. Here, we look at what it is, why you should be using it, and how you can incorporate it into your marketing strategies.

What is first party data?

Put simply, first-party data is information a company collects from their own sources. This could come from both online and offline sources, including:

  • Your website and apps
  • Social media platforms
  • Your CRM data
  • Points of sale
  • Call centres
  • Subscription data
  • Surveys

Because first-party data comes directly from your audience and their behaviours and interactions with your company it is an invaluable source of information, not least because nobody else has access to it. But many businesses don’t know how to utilise it effectively in their marketing activity to help attract more like-minded customers, or why they should be using it at all.

Why should you use first-party data?

Put simply, because it’s your upper hand on your competitors. It gives you first-hand insight into what your customers need from you, what they want to see more or less of, and what they see as your strengths and weaknesses. If you can scale that feedback and apply the learnings, not only do you get a more satisfied existing customer base, but also higher potential for them to then refer you to similar prospective customers, act as your advocates, and help you connect with similar audiences.

As well as giving you the upper hand from a business and engagement perspective, you can use the information you gain from this kind of data to identify areas of your business you can push harder and those you need to invest more attention in, giving you both marketing and business application from one set.

How to collect first-party data.

Before we can start using first party data in marketing activity, we need to be able to collect it at scale and the easiest way to do that is to make sure you’ve got pixels on your website and social media profiles. These will collect information about the behaviours and actions of those who engage with you and then record it in your CRM or CDP.

The most common way to collect first-party data is through Google Analytics, but you can also have different pixels for platforms like Facebook and LinkedIn to gather data about your social media audiences.

How to use first-party data.

1. Gain audience insight.

First-party data can be used for a variety of applications, but the one of the most valuable is gaining insights about your audience and one of the biggest parts of this is building out a full audience profile.

With the data you can gain from your website visitors, surveys, and customer feedback you can begin to build a picture of who your audience actually is, rather than who you think it is. Once you have that you’ll have a better understanding of things like:

  • What they do on your website, what pages they visit and where they get “stuck”
  • What they want to see more of and less of
  • What products or services they are most and least interested in
  • How they like to be spoken to
  • Whether they are a “commercial” user or more “informational” – do they come to you to buy, or to learn?

2. Create personalised experiences.

More and more website visitors are expecting an experience that is tailored to their needs and the more you know about your audience the easier it is to build personalised experiences for them.

With first-party data, you can analyse your web traffic, create audiences and divide them into “segments” based on their behaviour. This means you can then start to personalise their experiences by:

  • Making their journey to preferred products/services smoother
  • Showcasing your latest informational content so they see it as they arrive
  • Removing “distractions” so they can more easily find what they’re looking for
  • Showcasing related products/services based on their previous browsing behaviour

3. Combine it with third-party data.

Many marketers opt to combine their first-party data with third-party data to build a much fuller picture of their audience as well as improving efficiencies in their activity. Using a combination of data types will allow you to:

  • Enhance your existing first-party data
  • Improve the precision of your targeting
  • Discover new audiences
  • Expand your audience focuses
  • Reach similar audiences to those most important to you

You can then use this information to apply back to your marketing strategies, focusing first-party data knowledge on the existing audience while utilising third-party knowledge to attract a new audience.

The importance here is working in a cycle; once third-party audiences become your users, you begin to gather first-party data from them, which you can plug back into a Data Management Platform (DMP) to gain further third-party data to then reach that new segment as well and then it repeats. Stopping the cycle at any point will impact the value and efficiency of your activity, so just as a machine always needs to be well oiled, your process always needs to be connected.

What’s the difference between first-party, second-party and third-party data?

Put simply, the differences between first-party, second-party and third-party data can be summarised as:

First-party dataSecond-party dataThird-party data
Collected by own companyAnother company’s first-party dataBought from other companies
Own websites, social media platforms, surveysShared for mutual benefit, e.g. flight & hotel booking packagesFill in the gaps in CRMs e.g. purchase intents, to assign attributes to large user groups

First-party data will always be the most valuable for your marketing activity, but enriching it with information from second-party and third-party sources can help you reach new audiences and improve efficiencies in your activity.

When it comes to second-party data, we always suggest taking it with a pinch of salt as you can never be certain of the accuracy of the data you are being provided. Where we’ve seen this work particularly well, however, is through mutual partnerships such as affiliate websites or software partners where each party can learn more about the behaviours on different websites and then tailor the experiences accordingly.

How can you manage different data types?

The simplest way to manage different data types and be able to blend, dissect, segment, and slice and dice as you see fit is through a Data Management Platform (DMP). These allow you to manage data from various sources and will organise the data in a way that allows you to filter and review it as you need to.