Why Marketers Need to Focus on First-Party Data

First-party data

If you’re in the marketing industry, chances are you’ve heard of first-party data. It’s a phrase that gets thrown around a lot, but what does it really mean? And why should you care? Here’s an overview of what it is and why marketers should care about it.

What is first-party data?

First-party data is a marketing term referring to the data that your company has collected from its own interactions with consumers. This includes information about customer preferences, purchases and sales, product usage and behavior, channel engagement (eg. web visits, email opens), support tickets, demographics and other key info.

First-party data can be used in a variety of ways—for example:

  • To build target audiences for marketing campaigns
  • To create personalized content for individual customers
  • To segment past buyers so you know what they’re interested in buying next time they visit your website
  • To better serve customers and answer their questions

What is the difference between first-party data, second-party data and third-party data?

First-party data is information that you collect directly from your customers.

Second-party data is data that is directly shared or sold between two companies. It can be a list of leads that your company purchased from another company. You can think of second-party data as another company’s first-party data. You bought it from a company that collected it directly from its customers.

Third-party data is data that is aggregated and acquired from another company. Those companies typically collect data from different sources and combine it to create large datasets enabling reaching large audiences. The source of third-party data is often unknown to the company leveraging it, making it hard or even impossible to assess accuracy and reliability.

Why is first-party data becoming more important?

The reason is simple: First-party data is reliable and clean because it comes directly from your customers themselves—they trust you with this information because they know that it will only be used for them (and not for other companies).

It’s the most accurate and valuable marketing asset today because you own it, control it and can leverage it to improve your customer relationships via multiple touch points across channels.

This is becoming more and more important now that the advertising and technology industry move away from cookies and third-party data due to increased privacy concerns and government regulations.

How can you collect and enrich first-party data?

First-party data can be collected and enriched by capturing data when customers interact (online or offline) with your organization. Examples are:

  • Storing customer data, such as name, address and email when they purchase items.
  • Collect customer preferences via surveys, quizzes or questionnaires.
  • Collect product usage behavior using product analytics tools.
  • Collect online engagement (website) and email activity (opens, clicks) using marketing automation and CRM platforms.

The time for first-party data is now.

As availability and accuracy of third-party data is expected to decline rapidly over the coming years, marketers should act now to collect and enrich their first-party data. Specifically for larger organizations serving many clients it is important to understand it will take time to increase availability and accuracy of their own customer data.

Ignoring the importance of first-party data may lead to decreasing ability of companies to capture leads, benefit from personalized communications and automated up- and cross-selling and a decreasing ability to offer their customers an exceptional customer experience.

Embrace the power of your first-party data to create a competitive advantage

While many marketers are still trying to figure out what first-party data is and how to create an effective data capturing strategy, it’s time to get ahead of the game.

First-party data will become increasingly important, and if you want your marketing campaigns to be successful now and in the future, then it’s essential for you to have a well-defined first-party data strategy in place.


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