First-Party Data: The Future of Marketing

Unified Data|9 Minute Read

First-Party Data: The Future of Marketing

First-party data isn’t some trendy digital marketing buzzword that will fade in time. Not in the least.

Rather, first-party data is the future of marketing: an invaluable and indispensable resource marketers across all niches and industries now officially need to succeed with their data-driven programs.

Many marketers would even say first-party data has long been the foundation of their most successful marketing programs — it’s just now finally (and justifiably) getting its rightful moment in the sun as the clear path forward for brands, considering what we now know about third-party data.

When you collect first-party data from your audience (and, nowadays, with consent) via owned, earned, and paid media, you get the chance to leverage it in personalized and individualized marketing.

The same can be said for third-party data secured from (you guessed it) third parties. According to today’s top digital marketing pros, though, that type of data falls short in several key areas — including and especially its dependability, trustworthiness, and effectiveness in their online efforts.

Digiday found 30% of marketers think third-party data is their biggest challenge regarding targeted campaigns, while 82% noted third-party data is wholly unreliable. (Not exactly a ringing endorsement.)

That’s why marketers continue to ditch that data source altogether from their strategies and, instead, leverage first-party data more and more across channels to achieve their primary marketing goals.

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What is first-party data? What makes it the “best” data source?

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

Any identifying info you secure yourself straight from website visitors, email recipients, social media followers, ad clickers, and others who engage with you online (or offline): That’s first-party data.

As for the second question — well, ask yourself: 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 crystal clear. In fact, 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:

  • 36% of executives said increasing the quantity and quality of first‐party data in their databases was crucial for their brands. — 2019 Winterberry Group “Outlook for Data” survey
  • In 2018, marketers said getting martech to support first-party data initiatives was their “top technology investment priority.” — 2018 Forbes “Real-Time Marketing Accountability” report
  • 41% of “high-performance marketers” are incorporating first-party data into their marketing. — 2017 Forbes “Accelerating Growth Through Marketing Performance Measurement” report

What’s not clear for many marketers today is how they can transition from reliance on third-party data (and providers of said data) to a first-party data marketing approach that has proven far more effective (both in terms of day-to-day efficiency and long-term ROI goals) for many companies today.

Case in point: Less than 5% of marketing professionals say they’ve yet to realize 80% or more of the potential of their first-party data. That means there are still many marketers who haven’t used this data set yet to improve their digital marketing efforts and, in turn, achieve their primary marketing objectives.

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

Well, it begins with knowing how to best collect data points from one’s prospects and customers and infusing them into existing data-driven decision-making and marketing technology systems.

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First-party data best practices and use cases for brands

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

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 General Data Protection Regulation and the California Consumer Privacy Act:

  • “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 (and marketing departments) 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 set.

Best practice #1: Craft your 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 customer data platforms — 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 pure-play 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 data aggregated from separate sources (CRM systems, ESP providers, adtech solutions, and similar martech) into our unified, single source of truth
  • Reconciliation: Leveraging identity resolution to create persistent profiles and eliminate first-party data redundancies (in other words, duplicate profiles and information)
  • Segmentation: Bucketing your contacts into groups 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 platforms for ads, custom emails to individual prospects, etc.)

Gaining and monitoring consent is now a pivotal part of modern customer relationship management.

Therefore, securing a marketing system to automate the whole consent management process makes sense — especially when the alternative is manually updating customer profiles across your databases.

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Best practice #2: Update your data management processes.

Your first-party data is information you must leverage through the proper martech. Ultimately, though, there has to be one specific solution at the center of your data-driven decision-making: 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 customer data platform in place.

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

But you may also not yet know other opportunities for which you could leverage first-party data in your marketing — and that’s okay. New use cases arise every single day for organizations.

It’s these known, must-address use cases as well as the emerging, potentially fruitful ones that make the customer data platform such an important ingredient in your data-driven marketing today.

Best practice #3: Ensure easy first-party data activation.

All of the aforementioned use cases can be implemented straight from your CDP — so long as it’s connected with the appropriate martech solutions in your stack for each channel and medium.

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 conduct A/B tests for one or more of your company’s 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 help produce better metrics like time on page and CTA clicks and conversions.

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

This is the substantial, game-changing differentiator for the CDP when compared to “similar” tech like a DMP or data warehouse, 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.

How the CDP helps you make the most of first-party data

Less than half of marketers today use artificial intelligence to leverage their first-party data for activities like individualized messaging and segmentation for personalized campaigns.

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

Modern AI marketing use cases have evolved considerably over the last handful of years, going far beyond basic implementations, like social listening, search optimization, and content ideation.

With a customer data platform that has advanced AI features and functionality built in, such as AI Workbench, you can truly take advantage of the first-party data collected via your marketing.

Calculating customer lifetime value (CLV) for each of your segments, enabling smarter segmentation based on intricate contact behaviors, analyzing when subscribers are most likely to churn: These are just some ways CDP users — including BlueConic customers — take advantage of AI 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 your key to making the most of your first-party data.

customer data platform

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.