Have you ever experienced the sensation that somebody was observing you while you were on the internet? The shoes you recently investigated on Amazon now appear in advertisements on Facebook. It’s possible that you will begin to notice ads for a vacation spot that you were examining for a forthcoming excursion on YouTube.
The truth is, you are being watched. Marketers have been exploiting cookies to keep track of netizens for a while now, nevertheless that may be on the cusp of an adjustment. Google declared they are no longer utilizing third-party cookies. Consequently, many companies will need to utilize their own data for tasks such as advertisements targeting.
What does that mean for your marketing strategy? It might not be as bad as you think.
It’s important to be aware of the importance of first-party data, and how to employ it to craft targeted ads that you pay for.
Why all this talk about data?
Over the last few years, since the announcement of the end of third-party cookies, brands and media organisations have grown to understand the importance of harvesting first- and zero-party data. Back in 2017, The Economist already wrote:
“The world’s most valuable resource is no longer oil, but data.”
It is now evident that, since 2019, marketers have been required to have their own first-party data in order to have success as third-party cookies are fading away.
A recent survey conducted by Verizon Media and IPG revealed that the vast majority of consumers (87%) are worried about how their personal information is being handled. Additionally, we have noticed a rise in worries since the outbreak of the pandemic. In order to remain connected, companies and individuals have changed their habits from in-person to online.
Since 2018, when the GDPR and other data privacy laws and regulations were put in place, advertising professionals have come to understand the necessity of obtaining information directly from the people they are targeting. Opt-in choices and information collected directly from consumers are now crucial components in equipping marketers with the tools needed to gain a better comprehension of their customers and build relationships with them.
What contrasts exist between primary, tertiary, and no-party information? Why is first-party data so important? And why is it useful to marketers? In this piece, we will be addressing inquiries regarding the various kinds of data and how they can be utilized to interest your readership in an environment free of cookies.
What is first-party data?
Data that is collected by businesses from their own audiences, people interested in what they have to offer, and people who might be interested in their services is referred to as first-party data. A straightforward questionnaire giving people the option to sign up permits you to accumulate and handle their information. This information can only be accessed by the proprietors of the website that is being browsed by the individual.
There are two types of first-party data:
- Declarative data is your audience’s personal data, such as their name, first name, email address, country of origin, etc. So any information that the visitor will provide you with through a form or an interactive marketing campaign, for example.
- Behavioural data is collected about the actions and activities of a visitor on your website or other digital channels. You can collect this type of data through a pixel or a cookie, installed on your website to track what the user is doing while browsing. The most common tool to analyse this type of data is Google Analytics.
Well, then what is zero-party data?
The distinction between the two forms of data is quite obscure, and they are generally both acquired simultaneously though afterward applied in separate ways. Data gathered directly from the customer, referred to as first-party data, is a great partner to zero-party data which is information voluntarily provided by customers. This combination allows for a better understanding of an online audience.
Data which is provided willingly by a consumer and which is challenging to derive or purchase from the consumer is known as zero-party data. As opposed to first-party data, which customers need to provide to make a purchase or access a service, zero-party data is information the consumer decides to give to the company voluntarily.
Let’s illustrate the difference with the example of a hotel booking:
- When booking your hotel online, you’ll share information like your name, email address and date of birth. The hotel may also add an opt-in to their form, allowing you to sign up for their newsletter. This is your first-party data, it’s the minimum information required to make the purchase.
- The following information may also be asked of you: are you travelling for business or leisure? Would you prefer a sea view or a mountain view? What are your dietary requirements? This is your zero-party data, that you’re willing to share with the hotel and that they can’t infer or buy, to improve your customer experience.
Why is first-party data so important?
The data that has been obtained directly from the persons that advertisers want to target is of great worth. The quality and precision of this data are undeniable and brands recognize that it has significance for them. They possess a large quantity of data that they have collected themselves.
Results from a survey conducted by Quantcast and Iligo show that 65% of those surveyed believe that data directly from the source is the most dependable. So the advantages of focusing on this type of data are pretty obvious:
- It’s directly collected from the source, which allows you to know it’s accurate, qualitative and relevant to your business;
- Privacy and data protection are easier to ensure;
- Marketers own the data they’re collecting directly from their audience;
- Money-saving, whereas purchasing databases from third-party companies can have a considerably higher cost;
- It allows marketers to get insights directly from their audience so getting to know them is easier.
How to Use First-Party Data for Ad Personalization
We have looked at what first-party data comprises of, why Google has chosen to stop using third-party data, and some of the benefits of using it. How do you actually put first-party data to use? It is essential to understand how to employ this data for individualized advertising.
Determine How to Leverage First-Party Data
Investigating how the data you collect can further your marketing aims should come before starting to compile information. The approach you wish to take with the given data will determine the kind of details you intend to acquire and the strategy employed to obtain it.
You might use it to:
- build brand awareness
- reduce churn
- send timely ads
- drive more qualified leads
An example for this could be if you wanted to send out emails for a marketing campaign that is personalized, then you could collect the relevant information through a survey that is done via email.
Make a Plan to Gather First-Party Data
You cannot purchase first-party data like you would a third-party source; it must be collected independently. Luckily, there’s no shortage of ways to gather it.
For example, you can collect first-party data from:
- website visitor tracking tools like Crazy Egg
- your mobile apps
- offline surveys
- social media channels
- user registration for your website
- contests
Before devising a plan to obtain information, contemplate how you intend to use the data to tailor your advertising. Examples of targeted advertisement may include retargeting, custom product suggestions, or account-focused promotion.
Ask Permission to Gather the Data
One of the major concerns around data gathered from outside sources is that many internet users do not realize that they are being monitored. As first-party data is increasingly being utilized (and as laws governing data privacy impose restrictions on what data can be collected about audiences), there must be openness about the data being gathered.
Make sure your viewers comprehend distinctly what records you collect, what you accomplish with it, and how it is kept. It is a legal requirement in certain locations, for instance the European Union’s General Data Protection Regulation, to be open and honest about the information gathered and the way it is dealt with.
Test, Tweak, and Retest
With third-party data, you get what you get. There is no possibility to modify the kind of information you accumulate or alter how you acquire it.
By using first-party data, you can experiment to determine the most effective approach to collection. See what works best by making adjustments, and then utilize the info collected by A/B testing your ad material to learn what your viewers respond to.
When is first-party data useful?
GDPR compliance
Marketers, as the proprietors of the data they are gathering, can make certain that they are meeting the requirements of GDPR. You can gather any required authorizations by including an opt-in field on your forms. You must not overlook asking the data protection officer of your employer and abiding by the rules of your employer concerning this subject.
Retargeting in advertising
One way to utilize first-party data is to use it as a means of retargeting people and cultivating relationships as part of the sales process. Advertisers have the opportunity to design innovative retargeting plans rooted in their advanced understanding of the customer. They gain an increased familiarity with their desired customer base, and extend their reach to new target audiences through utilizing their own data list on different outlets.
Personalisation
By gathering information obtained directly from customers, marketers can categorise their audience and send out tailored emails and special offers. They can employ the information they collected to interact with their audience regarding topics important to them and that they find meaningful. Emails that are tailored to the reader will not only be opened at a higher rate than those that are generic, but will also lead to more conversions than if a generic email newsletter had been sent.
Marketers should be sure to collect their own data, as this can be deeply beneficial to their marketing strategies in the future. They will not only possess that data, but it is also precise and pertinent to their company. Marketers need to remember that permission is not as straightforward as it seems and there are still many queries to be answered pertaining to the GDPR and how to assemble first-party data in an acceptable way.
Advantages of Only Using First-Party Data for Ad Personalization
What are the benefits of transitioning to first-party data rather than relying completely on the Google privacy sandbox?
At the beginning, a lot of brands are putting in more reliance on their own data, which signifies that the outcomes are likely positive. Google states that nearly nine out of ten APAC businesses consider advertising important for their marketing strategies.
First-Party Data Is More Accurate
First-party data is information you collect about your customers. This increases precision because the identity and source of the information is identified.
Data that is acquired from a source that isn’t directly linked to a brand is typically sold and sometimes even further sold down the line. This makes it so these brands have no real idea as to who was the original provider of the information, or even where that data has originated from.
Boost Marketing Performance
A few individuals are very worried about the cessation of third-party data, but I’m not among them. Why? First-party data is not only more precise, it is also much more adept at spurring customers to act.
A Boston Consulting Group study uncovered that marketers who employ data collected directly from their customers experience a rise in the effectiveness of their marketing efforts, generating almost twice the income from a single advertisement or placement.
Your Competitors Don’t Have the Same Data
Standing out online sometimes feels impossible. There are a vast number of companies, a lot of internet users, and an increasing amount of material being generated regularly, making it difficult for brands to make their voices heard in the overwhelming din.
Utilizing external data sources can mean rivals have access to the same information, making it difficult to set oneself apart from the competition. Despite the efforts of your competition, they don’t possess the same information that you do in regards to the data that you gather, which makes it simpler for you to experiment with new ideas or discern what insight you can get from analyzing your own traffic and customers.
You Can Double Down on Personalization
Forrester reports that almost nine out of ten digital businesses put money into personalizing their marketing strategies. It is evident why a majority of shoppers would choose to buy from companies which offer them a unique and tailored experience.
Employing external data for customization never created an ideal fit. It is possible that you are unaware of when a customer shifts from one gadget to another or if the information you are utilizing is distorted. By leveraging your own data, you can begin to tailor your content to individual needs with certainty that the information is correct.
First-Party Data Is Cheaper
Instead of collecting data from an external source, you are paying money for data that is not effectively tracked, not precise, and difficult to manage. Conversely, first-party data is the data gathered from your own audience.
Which means you don’t have to buy it. It may cost some money to gather and save the information, but it is probably less expensive than buying it from an alternate source.
Conclusion
Third-party cookies are coming to an end. What does that mean for marketers? It is time to begin taking advantage of data that businesses already possess in order to customize services. The positive update is that it is more precise and cost-effective, and it can potentially heighten marketing effectiveness.
The initial move to make use of proprietary data is to figure out a way of accumulating it either by means of polls, customer questionnaires, or website analytics software.
