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First-Party Data – What It Is and Why You Need It

Updated: Feb 21, 2022

The concept of first-party data is relatively new to many organizations. A recent survey discovered that nearly 75 percent of marketers are not using first-party data sources, while an additional 19 percent had no idea what first-party data is.

What is first-party data?

First-party data is information that an organization gathers about its customers directly. For example, companies can collect information like customer email addresses, shopping histories, and payment details through various means, like analytics tools, surveys, and cookies.

First-party data is valuable because it represents a direct connection between the company and the consumer.

Marketers, content creators, and advertising teams always try to understand their audience and create content that resonates. However, they need a complete picture of both customers and non-customers who engage with their brand to do this effectively.

This is where data comes in. It offers valuable insights into the people who interact with your brand — and it's an essential part of building customer relationships.

Why is first-party data valuable to an organization?

First-party data is an organization's best friend. It can help you understand who your customers are, what they're doing, and what they want. Here are five reasons why first-party data is so valuable:

1. It's good data that's under your control

2. First-party data provides a 360-degree view of your customers

3. It enables you to build custom audiences

4. You can use it to personalize customer experiences

5. First-party data helps advertisers target audiences at scale

How can you go about collecting first-party data?

The first step to collecting first-party data is to define what information is essential to your business and why. To do this well requires an in-depth awareness of your target audience: what motivates them, where do they go for information, how do they make their purchasing decisions?

With that defined, create the proper channels for collecting customer data, such as website surveys or forms, email signups, phone calls, in-person meetings, or any other direct contact with customers. Then be sure to let your customers know how you plan on using their information and how they can opt-out at any point.

Remember that keeping customers informed about how you're using their data is just as important as collecting it in the first place.

Does first-party data allow for better targeting of customers?

Yes! One of the most powerful ways to use first-party data is to create audience segments based on user behavior. For example, say you're a B2B or B2C publisher. You might want to target visitors who have looked at content related to soccer and basketball pages with ads for each of these products. Or you could build a "frequent visitors" segment and show them recommended content based on the type of content consumed to encourage another visit.

Whether you are a publisher, retailer, or provide a niche service, first-party data is the key to effective communication and targeting your customers where they consume content.

What are some of the key take-aways of first-party data?

There are many reasons why you should generate first-party data in your business.

First of all, it will help you better understand your customers and how they interact with your brand, content, products, or services. Secondly, it can help you increase the relevance of communication between your brand and prospects or clients. Finally, it is a trustworthy source of information that you can use to boost revenue in your business.

The most relevant and impactful example to the everyday organization is the elimination of third-party cookies. Google is making a considerable change to its ad policy, affecting almost every digital marketer. Google has announced plans to phase out the third-party cookies that track consumers' online behavior across sites and devices. Without third-party cookies, brands will have to find new ways to reach target audiences. Again, this emphasizes the importance of implementing a first-party data strategy.

Many other examples relate to consumer privacy laws and the continuously evolving data privacy legislation. And while these topics are critically important, they are addressable through the proper implementation of a first-party data strategy.

In the end, first-party data is valuable because it provides much more insight than third-party data sources alone. For that reason, a first-party data strategy is a necessary tool in your arsenal when you want to optimize your digital marketing campaigns, regardless of whether you're running them on an enterprise-level or a small business level.

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