UNEARTHING THE VALUE OF FIRST-PARTY DATA
Published on December 07, 2020
The concept of data is nothing new. Surprised?
Even before the advent of the internet, data has long served as a treasure trove across ancient civilisations, dating back to the earliest of civilisations—think back to the Library of Alexandria, once home to the largest collection of data in 300 BC. Now, fast-forward to present day data-driven marketing, where big data has made it possible for marketers to track consumer habits and patterns. Today, over 2.5 quintillion bytes of data are created each day and 90 percent of all the data in the world was only generated over the past few years alone, pointing to the power of digitalisation when it comes to data creation. Spanning multiple industries, data is a big business, allowing organisations to reap benefits across sectors from research to healthcare.
When Google announced its decision to axe third-party cookies, the fallout from the marketing world was proof enough of the extent to which we’ve become overly data reliant. Yet, with data revealing more and more about our lives than ever and with just a simple click, issues in transparency and data ethics have become a growing cause for concern. Against a backdrop of data protection frameworks from the GDPR to CPRA, where do we go from here?
Let’s talk about first-party data
For years, marketers have been using cookies to track website visitors, improve user experience, and collect data that helps to optimise audience targeting activities. However, amid increasing attention surrounding third-party cookies and data privacy violations, third-party data—collected by third-party cookies—are now seen as increasingly unsustainable. With 2022 on the horizon, the deadline for Google Chrome’s termination of support for third-party cookies looms ever closer and marketers must explore alternatives to kick the third-party cookie habit.
Over the past year, marketers and publishers alike have gradually begun to build up their first-party data collection capabilities for targeting and personalisation efforts. But what exactly is first-party data?
First-party data is data collected from individuals who have interacted directly with a brand or business. It can be gathered from both online and offline sources such as behavioural data from mobile apps, websites, CRM systems, social media, or point-of-sale data like surveys and customer feedback. Essentially, this is data that your brand has collected firsthand, right from the source. Due to its incredibly high level of accuracy and relevance, it is arguably the most powerful data available—a valuable source of consumer insights, first-party data enables businesses to better understand specific behaviour and buying signals from their consumers.
Aside from accuracy and data quality, first-party data can help businesses better understand their customers and reveal audience behaviours, traits, preferences, and interests, uncovering touchpoints that are most important to them. These insights can then be used to inform their marketing strategies and design unique brand experiences tailored to the specific consumer.
Why first-party data is first choice
Customers today have much higher expectations—aside from an integrated omni channel shopping experience, customers want brands and marketers to identify the products and services that are relevant to them and serve them at the optimal time in a non-intrusive way. In order to maximise targeting efficiency and reduce ad waste, businesses ought to shift away from cookie-based tactics toward strategies that utilise their own first-party data to identify real people and plan user journeys across multiple channels.
More often than not, the key to creating successful marketing campaigns starts with knowing your audience and understanding the consumers you’re trying to reach—who they are, what they like, and how they spend their time. Audience addressability optimises both relevance and timing at scale, ensuring that your marketing messages are meeting the right people, at the right places, and at the right time. Since first-party data is collected directly from consumers, it delivers the most accurate insights which in turn helps brands improve campaign performance, grow addressable audiences pools, and increase their return of investment.
Another clear advantage of first-party data is recency. Once an action has been taken by the customer, such as the purchase of an item, first-party data can be immediately synthesised and incorporated into marketers’ campaigns to ensure that the customer no longer sees advertisements for the same product. The same can be said for customers who’ve left items in their cart—by leveraging their first-party data, brands can identify and deliver targeted messaging to this segment of users via an email campaign that encourages them to conclude the check-out process. With first-party data, brands will have not only the most usable data at their fingertips, but will also be able to continuously add and refine data as users continue to engage on their owned platforms.
Within an increasingly data-centric marketing ecosystem, privacy concerns are among the biggest hurdles faced by marketers when it comes to optimising advertising performance. When leveraging data that is voluntarily given with consent, marketers can leverage first-party data that effectively ticks all the compliance boxes, making it easier for companies to comply with regulations while enabling them to use targeted insights that achieve the same, if not greater, levels of personalisation.
The drawbacks of the data game
That said, a fragmented regulatory landscape and an overly protectionist approach to data storage can lead to the creation of data silos which can significantly harm business efficiency. These silos make it difficult for data-driven marketers to access and activate first-party data in order to maximise value. With the right tools, however, marketers and brands can work together in a collaborative federation to build a solid foundation of owned first-party data. This unified ecosystem would allow for the secure, compliant sharing of data across a vetted network of data sources.
Recently at Aqilliz, we’ve looked to address this very issue by integrating our Federated Identity Management solution with BritePool ID, a non-cookie-based identifier designed by leading identity management firm BritePool. This holds the key in building a more collaborative, open-source, and interoperable digital marketing ecosystem—one that is built on the foundations of privacy-by-design without compromising on personalisation.
As we look to the future, marketers have learned that they can no longer afford to compromise on tipping the scales of privacy and personalisation. By tapping into the benefits of first-party data with the help of compliant infrastructures, marketers can better reach consumers during the most crucial decision-making moments—unlocking greater long-term value and enhancing brand-customer relationships in a privacy-first world.