How to Leverage First-Party Data in a Privacy-First World
By Pete Kurkowski
On February 3rd, Facebook’s parent company, Meta, suffered the biggest single-day drop in stock market history, losing over $230 billion in market cap. One of the primary reasons was a projected revenue decrease due to Apple’s increased privacy features, which limit Facebook’s ability to track iPhone users without their explicit consent.
Facebook’s huge losses grabbed headlines, but they’re not alone. The demise of third-party cookies is impacting advertising and marketing strategies for brands around the world. Apple has already implemented changes, and Google plans to block third-party cookies from Chrome by the end of 2023. Between these technical barriers and increasingly stringent privacy regulations like GDPR and California’s Privacy Rights Act, a robust data strategy is more essential than ever.
So how can brands adapt to a privacy-first world and still get the most out of their user data? By investing in first-party data and privacy-focused analytics.
What is first-party data?
Third-party data has long been a key component of online advertising. Data brokers aggregate massive amounts of behavioral and demographic info on consumers, segment it, and sell it to brands. While it’s a cheap way to gain insight into your potential customers and optimize advertising for different segments, third-party data has some major drawbacks:
- You don't know how and where the data was collected.
- The methods used to acquire the data may not align with users' preferences.
- As third-party data acquisition becomes harder, its quality and accuracy have dropped.
- Using data that doesn't comply with privacy regulations—even unknowingly—could put you at risk of hefty fines.
On the other hand, first-party data is anything you collect directly from your customers and users. There’s no middleman, so you know the information is accurate and safe to use.
There are several ways brands can collect first-party data:
- Website visitors
- Social media
- Email subscriptions
- Surveys and polls
- Download and purchase history
Why first-party data is essential
In today’s privacy-focused digital world, first-party data isn’t a luxury, it’s a necessity. But according to an Adobe Digital Trends survey, 38% of companies feel they are not prepared for a world without third-party cookies.
Pivoting away from third-party data and building a first-party data strategy isn’t easy, but it offers some critical advantages:
- Exclusivity: When you buy third-party data, you have no idea how many other brands might be working with the same information. But, you know that no one else has access to your first-party data. Working from exclusive and unique data empowers your brand to craft a personalized user experience, which is an incredibly valuable benefit.
- A direct pipeline: Collecting first-party data bypasses the struggle of fractured streams from outside providers. Whether you store it in a CMP, CRM, or CDP, the data is immediately ingested by your platform and available to your in-house analytics and customer management tools.
- Minimal risk and maximum privacy: Using first-party data eliminates the risks associated with third-party cookies and data. A recent study found 51% of organizations have experienced a data breach caused by a third-party vendor. Staying compliant with shifting privacy regulations is hard enough without having to worry about vetting data providers or wondering who their source may be. Additionally, users will appreciate the increased personalization, but won’t have the creepy feeling of wondering how a brand knows things they haven’t shared with them.
- Greater control: Since brands are collecting first-party data directly, they have complete control over how it’s collected, stored, and used. The details of how and when information is gathered provide nuance that’s totally lost when buying third-party data.
- Increased data relevance: Context is everything. Since all first-party data brands gather comes directly from their own marketing campaigns, apps, web properties, etc., they have a granular understanding of the context in which it was acquired and can use it more effectively.
- Easier identity resolution: Your customers engage your brand using a variety of devices and platforms, and weaving that all together can be a challenge. First-party data makes identity resolution easier and helps build a more comprehensive and detailed view of your users.
How to use first-party data effectively
Investing in first-party data requires some effort, but it also facilitates more agile and impactful marketing efforts–and gives a brand complete control and agency over its data. Here are some of the ways brands can leverage first-party data to succeed in a privacy-first digital world:
- Adopt look-alike modeling: One of the biggest challenges brands face without third-party data is marketing to new visitors. It's hard to segment or optimize when you don't know anything about a user. Enter look-alike modeling. By using first-party and second-party data to build models of your current users, you can market to new ones starting from these likely guesses, then refine and optimize as you learn more about them.
- Lean into reports and metrics: With so much granular data available, your team can focus on analyzing KPI dashboards to drive decisions. Metrics like feature popularity, retention rate, session duration, conversion rate, and cart abandonment all provide key insights into your customer journeys. Armed with this knowledge, you can enhance the user experience and improve your ROI.
- Take personalization to the next level: Epsilon research found that 80% of consumers are more likely to make a purchase when brands offer personalized experiences. As you use first-party data to build detailed profiles of your customers, you can hone in on their interests and offer highly relevant advertising and messaging.
- Keep your cookies: Third-party cookies are dying, but first-party cookies are alive and well. As long as you comply with privacy regulations and inform users of how and why you’re using cookies, they’re a valuable tool to track behavior and can even help improve UX.
- Focus on consistency: Siloed data and fractured usage between departments can lead to messy headaches and incorrect insights downstream. However your brand collects and stores first-party data, make sure it's consistent across your organization. Create clear instructions, use proper naming conventions, and keep data integrity in mind at every step.
- Re-prioritize email: Customer email addresses are some of the most valuable first-party data your brand will ever get. The Content Marketing Institute found that 90% of marketers use email performance as the top metric to measure content performance. Maximize email utility by setting up strategic email campaigns that focus on highly personalized content and use behavioral data to optimize the pacing and frequency on a per-user basis.
It’s time for brands to invest in privacy-first analytics
Developing a first-party data strategy is essential to your brand’s long-term success. Regulatory compliance and user privacy are going to be increasingly important facets of marketing, and they should be part of your data plans from the start.
Brands need a toolset that’s agile enough for a high-velocity digital world, with top-tier security to keep customer data safe. Scuba’s continuous intelligence platform allows brands to maximize their first-party data with the following key features:
- Intuitive toolset to analyze data and quickly gather actionable insights.
- Easy integration across departments to prevent siloed data streams and ensure rapid access to information for all stakeholders.
- Create complex queries and KPI dashboards without technical resources.
- Access to real-time data to enhance customer UX without delays or organizational bottlenecks.
- Certified compliance with data privacy regulations such as GDPR.
- Industry-standard security certifications so you can rest easy knowing your data is safe.
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