First-party data (a.k.a. 1st-party data) isn’t a buzzword that will fade in time. Rather, it’s the future of marketing. An invaluable, indispensable resource companies need to succeed.
Specifically, it’s an asset that helps businesses connect with existing customers and target audiences in a cost-effective manner (e.g., highly personalized experiences).
But, from a high-level, strategic perspective, first-party customer data can also help you accelerate business growth and transform your business from top to bottom.
Many companies today would even say the data type 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 given third-party data’s unreliability and the demise of third-party cookies:
- Digiday found 30% of organizations think using third-party audience data from a personal data exchange is their biggest challenge when it comes to targeted marketing.
- Meanwhile, 80% of businesses are worried about third-party cookie deprecation will negatively impact their “personalization or performance efficiency/ROI,” per Epsilon.
(Not exactly a ringing endorsement for these types of data, wouldn’t you say?)
In short, there’s a reason leading companies now collect first-party data instead and utilize it to better understand and engage with both target audience segments and individuals. (Not to mention monetize it through partner relationships.)
What is first-party data? And why is it the “best” data source for businesses?
The answer to the first question is simple: First-party data is the consented customer data (demographic, behavioral, contextual, etc.) for individuals who interact with you.
Online or offline data for website visitors, email recipients, social media followers, in-store shoppers, and others who engage with you today. That is first-party data. (In a nutshell.)
As for the second question? Well — which do you think is more trustworthy and reliable?:
- Data you acquire directly from your prospects and customers?
- Data you acquire from seemingly reputable partner brands?
The answer is clear. The (lack of) benefits of third-party data are few today. First-party data is now the overwhelmingly popular option for companies. And the reasons why are many:
- 36% of executives said increasing the quantity and quality of first‐party data in their stacks was crucial for their companies. — 2019 Winterberry Group survey
- In 2018, companies said getting tech solutions to support first-party data initiatives was their “top technology investment priority.” — 2018 Forbes report
- 41% of “high-performance marketers” are incorporating first-party data into their overarching marketing strategies today. — 2017 Forbes report
What’s not as clear for many companies, though, is how they can transition from third-party data to first-party data. In fact, less than 5% of digital marketers say they’ve yet to realize 80% or more of the potential of their first-party customer data.
That means there are still many businesses that haven’t properly taken advantage of it. Both in marketing and on other growth teams (e.g., ecommerce, customer experience, etc.).
So, how can organizations (see: yours) start taking advantage of first-party data?
It begins with knowing how to best collect the data and incorporating it into existing marketing decision-making processes and your data ecosystem. (That is, your tech stack.)
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 companies have legitimate concerns about new(-ish) consumer privacy laws.
McKinsey’s Jason Heller noted how the emergence of first-party data strategies presents challenges and opportunities for companies, thanks to data laws like GDPR and CCPA.
Thus, all businesses want to ensure their first-party data is consented before utilizing it.
But it’s equally vital for these businesses to be able to track consent updates over time and update their engagement efforts accordingly (e.g., if a user ‘opts out’ of marketing consent).
With that in mind, here are 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 customer data points.
Best practice #1: Craft a consent management strategy.
Consent management becomes seemingly more complicated by the day. Each new consumer privacy regulation is one more measure your business must comply with.
Thankfully, many business technology vendors — including customer data platforms (CDP) like BlueConic — have recognized this large (and growing) pain point for companies today.
For instance, BlueConic has consent management functionality built right in.
This streamlines and automates consent-status updates in customers’ persistent profiles. In turn, everyday marketers can confidently activate their first-party data without worrying about accidentally engaging any opted-out individuals.
Specifically, our consent management functionality helps companies in four key areas:
- Collection: Gathering data from separate sources (CRM systems, ESP, adtech, etc.)
- Reconciliation: Using identity resolution to create dynamically updated customer profiles and eliminate first-party data redundancies (i.e., duplicate profiles and info)
- Segmentation: Grouping customers based on particular attributes and behaviors
- Activation: Sending consented first-party data to all their core marketing channels
Gaining, monitoring, and updating consent leads to far greater customer data quality. Moreover, it’s a must to realize a modern customer relationship management strategy.
Therefore, securing an advanced solution that automates consent management is ideal.
(Especially when the alternative is manually updating customer profiles across your stack.)
Best practice #2: Update your data management.
We don’t mean just the people and processes behind your customer data management efforts. We also mean your tech. And there’s one platform that stands out as the leading data-driven solution today: a pure-play CDP — like BlueConic.
Your legacy tools are (and will likely remain) essential tech for your growth teams.
However, all this software is inefficient and inadequate when the first-party data stored in them doesn’t sync into a single source of truth such as a customer data platform.
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.”
You may not yet know specific opportunities for leveraging first-party data in your marketing program. And that’s okay. New use cases arise every day for organizations with a CDP.
The vital thing to remember is none of these use cases will aid your marketing efforts and improve ROI if you don’t efficiently manage your first-party customer data accordingly.
Best practice #3: Ensure efficient cross-channel activation.
With a strong data management strategy in place — along with a CDP — you have the opportunity to make the most of the data. That is, you can capably segment, analyze, model, and — at the end of the day — liberate that customer data across channels.
For example, if you want to engage prospects for whom you have a wealth of data (e.g., recent purchase/browsing data), you can serve on-site dialogues and delivers emails with relevant, timely recommendations (e.g., those for products of interest).
Similarly, you can A/B test one or more of your website pages to offer custom experiences for different segments. This can help you see which variations (i.e., which types of messaging, images, and/or user interface) spark the most engagement.
The point is there are myriad options when it comes to utilizing your first-party data.
And you can boost both revenue and operational efficiency when you have a customer data platform like BlueConic that stores your first-party data, democratizes it across all growth-focused teams, and enables more effective customer data liberation.
Learn how unifying your first-party data in our pure-play CDP can help you scale and streamline your customer engagement efforts. Request your BlueConic demo today.