First-Party Data: The Future of Marketing

CDP Use Cases|9 Minute Read

First-Party Data: The Future of Marketing

First-party data (or 1st-party data) isn’t a marketing buzzword that will fade in time.

Rather, first-party data is the future of marketing. It’s an invaluable, indispensable resource brands everywhere now officially need to succeed. Specifically, it’s an asset that can help:

Many marketers today would even say first-party data has long been the foundation of their most successful marketing programs. Now, it’s just finally (and justifiably) getting its rightful moment in the sun as the clear path forward for businesses.

Especially considering what we now know about third-party data (or 3rd-party data).

When you collect audience data directly from prospects and customers (and, nowadays, with consent), you can leverage it in personalized and individualized marketing.

The same can technically be said for third-party data secured from (that’s right) third parties.

According to today’s top digital marketers, though, that type of data falls short in several key areas — including and especially its dependability, trustworthiness, and effectiveness in their online and offline efforts (see: customer lifecycle orchestration).

Digiday found 30% of marketers think third-party data is their biggest challenge when it comes to targeted marketing. Meanwhile, 82% noted noted the personal data source (and the data exchange format) is unreliable when it comes to their personalization efforts.

(Not exactly a ringing endorsement, wouldn’t you say?)

That’s why marketers continue to ditch that data source altogether. In its place, they’re collecting first-party data and utilizing it across channels to achieve their marketing goals.

first-party data

What is first-party data? And why is it the “best” data source for marketing?

The answer to the first question is simple. First-party data is the consented customer data (demographic, behavioral, contextual, and otherwise) you obtain directly from individuals.

Any identifier you secure yourself straight from site visitors, email recipients, social followers, ad clickers, and others who engage with you online or offline. That’s first-party data.

As for the second question? Well — which do you think is more trustworthy and reliable?:

  • Data you and your team acquire from your prospects and customers through your core channels: your website, app, social presence, email efforts, and ad campaigns
  • Data about individuals and segments you typically market to (the quality and accuracy of which you can’t entirely verify) you acquire from seemingly reputable partners

The answer is clear. First-party data is now the overwhelmingly popular choice for brands today over its third-party data counterpart. And the reasons why continue to mount:

What’s not as clear for many marketing professionals across niches and industries today is how they can transition from reliance on third-party user data (aggregated from semi-reliable sources, more often than not) to primarily a first-party data marketing approach.

Less than 5% of marketers say they’ve yet to realize 80% or more of the potential of their first-party data. They include information provided by their audience in some facets of their marketing, but have yet to realize the desired ROI from the source.

That means there are still many brands that haven’t properly taken advantage of it yet to achieve their primary objectives. Both in their marketing efforts and elsewhere across the organization: sales, customer service, even product and service development.

So, how can digital marketers such as yourself start taking advantage of first-party data?

Well, it begins with knowing how to best collect it — from basic PII like email addresses to intricate behavioral data — from one’s audience and infusing those data points into existing marketing decision-making and technology systems.

first-party data

First-party data best practices, insights, use cases, and advice for marketers

There’s no doubt first-party data is the premier marketing asset for all organizations today. However, some brands have legitimate concerns about new(-ish) privacy laws.

(Data protection and usage remain top concerns among consumers worldwide.)

McKinsey’s Jason Heller noted on the consulting firm’s podcast how the emergence of first-party data presents both challenges and opportunities for data-driven marketing teams and leaders, thanks to regulatory measures like GDPR and the CCPA:

“The increased use of first-party data, the growing privacy regulations around it, new approaches to data governance: these are all part of the day in the life of a modern marketer and modern CMO, which was not true five to 10 years ago — certainly not 10 years ago.”

Thus, it comes as no surprise businesses all over want to ensure the first-party data they procure from their audience is not only consented, but also that they have the ability to track consent updates over time (e.g., if a user decides to “opt out” of marketing consent).

With that in mind, here are some common best practices around first-party data collection you’d be wise to abide by as well as some advice on how to leverage the data points.

1st 2nd and 3rd party data

Best practice #1: Craft a consent management strategy.

Consent management becomes seemingly more complicated by the day. With each new consumer privacy law comes more mandates from U.S. and EU entities you must comply with entirely.

Thankfully, martech vendors — including the customer data platform (CDP) — have recognized this large (and growing) pain point for companies today. This is how the consent management platform came to be.

These programs (or, in BlueConic’s case, a feature built right into our CDP), simplify practically all consent-related tasks.

As our blog post explains, our consent management functionality helps marketers in four key areas of their day-to-day promotional efforts:

  • Collection: Gathering info aggregated from separate sources (CRM systems, ESP providers, adtech solutions, and similar martech) into our unified, single source of truth
  • Reconciliation: Using identity resolution to create persistent customer profiles and eliminate first-party data redundancies (in other words, duplicate profiles and info)
  • Segmentation: Bucketing your customers based on particular traits and behaviors of individuals in your database for more precise targeting with your marketing
  • Activation: Sending consented first-party data to your critical marketing channels (social media for ads, custom emails to individual prospects, mobile apps, etc.)

Gaining, monitoring, and updating consent is now a pivotal part of modern customer relationship management. and key for effective one-to-one marketing activities.

Therefore, securing martech to automate consent management makes sense — especially when the alternative is manually updating customer profiles across your stack.

first-party data

Best practice #2: Update your data management.

Your first-party data is information you must utilize through the proper martech. Ultimately, though, there has to be one specific solution at the center of your stack: the CDP.

Of course, your legacy marketing technology systems are, and will likely remain, essential for your digital strategy and continue to drive your ability to achieve marketing goals small (traffic growth, email clicks) and large (visitor-to-lead conversion, customer churn prediction).

However, all of this software is inefficient and inadequate without a CDP and a modern customer data management strategy.

As BlueConic VP Marketing Michele Szabocsik explained, the CDP — including our own — was “designed to not only meet the first-party data needs of today, but also scale to meet the needs of tomorrow — even if they are not yet known.”

Chances are you’ve already identified first-party data use cases for your business, regardless of the niche industry in which you operate. Some popular CDP uses cases include:

  • Membership organizations: Exchanging value to get someone else’s first-party data, via second-party data relationships, to then use for member acquisition efforts
  • Retail and ecommerce brands: Offering personalized product recommendations to users or segments based on first-party data (e.g., products viewed or added to carts)
  • Investment firms: Similarly, providing individualized content recommendations to prospective investors to eventually convert them into qualified RIA leads
  • Publishers: Using dynamic content metering to engage readership, generate more email newsletter sign-ups, and drive subscriptions (and subscription revenue)
  • Travel websites: Enabling real-time personalization to show solely the most relevant travel offers and experiences to visitors looking to book accommodations

You may not yet know specific opportunities for leveraging first-party data in your marketing. And that’s okay. New use cases arise every single day for organizations.

The important thing to remember is none of these use cases will aid your marketing efforts if you don’t efficiently manage your first-party customer data accordingly.

customer data management

Best practice #3: Ensure easy cross-channel activation.

All aforementioned use cases can be implemented straight from your CDP. So long as it’s connected with the other core marketing solutions in your martech stack.

For example, if you want to deliver highly targeted messaging to prospect for whom you have a wealth of first-party data, including their behavioral profile properties, you can serve on-site messages or calls to action at the ideal times, like when they’re likely to exit your site or land on a product page they’ve previously visited.

Similarly, you can A/B test one or more of your website pages to offer custom experiences for different segments to see which variations spark the most engagement.

For instance, alterations to homepage elements (e.g., copy, imagery, offers) can give you rich insights into which produce better metrics like time on page, clicks, and conversions.

You can implement true, real-time marketing activities like this that populate pertinent messages and deals to visitors, users, and followers as they interact with your presence.

This is the substantial, game-changing differentiator for the CDP when compared to “similar” tech like a data management platform (DMP), which simply don’t offer this kind of next-level activation when it comes to proprietary first-party data — something that’s now paramount to marketing (and sales) success.

cdp vs dmp

How a CDP with AI features can help you make the most of first-party data

Less than half of marketers today use AI to leverage their first-party data for activities like individualized messaging and segmentation in their lifecycle orchestration efforts.

In short, this is a major missed opportunity for today’s marketers.

Advanced AI marketing use cases have evolved considerably in recent years. Many go far beyond basic implementations, like social listening and search optimization.

With a customer data platform that has advanced AI functionality built in, like BlueConic’s AI Workbench, you can truly take advantage of the collected first-party data.

Calculate customer lifetime value (CLV) for buyer segments. Enable smarter segmentation based on intricate behaviors. Analyze subscribers’ propensity to churn.

These are just some of the ways in which CDP users — including BlueConic customers — take advantage of artificial intelligence (and machine learning) for marketing.

Whether you want to unify data into a single source of truth, activate it cross-channel, or take your marketing to the next level with AI, the CDP is now your best bet to help you and your team make the most of your first-party data.

Watch out “AI for Marketing” webinar to find out how you can leverage your first-party data in machine learning models, like the out-of-the-box ones in BlueConic’s CDP.

ai for marketing

See what BlueConic can do for you.

Whether you’re looking for operational efficiencies or improved marketing effectiveness through data activation, our customer data platform can help.