4 Reasons To Take Advantage of First Party Data
With data privacy and security concerns growing amongst consumers, business owners and marketers must think of new ways to optimize advertising performance and scale the customer experience. Considering users generally agree to process their data when they are making a purchase from your company. Collecting this type of first-party data makes it easier for brands and marketing teams to comply with regulations.
First-party and opt-in data help businesses understand and connect with their consumers on a deeper level. One of the benefits of first-party data is that you can exercise complete control over how it’s collected, processed, stored, managed, and utilized. This type of information essentially allows you to do all the customized campaigns you desire as long as you adhere to what customers have consented to provide. Your audiences and customers know where you have this information and approve of you using it. Thanks to this, your advertising, marketing, and outreach can be done in a way that is customized and where the expectations are set up-front.
By fostering an effective first-party strategy, you’ll be able to nurture your prospects, keep your customers, earn new ones, and grow your business in the process.
Types of first-party data
First-party data is considered to be any information that is directly collected by businesses on their audience, customers, and prospects. So from a simple opt-in form on a website to pixeled traffic on a landing page, these are ways to collect and process user data. Essentially, there are two types of first-party data, declarative data, and behavioral data.
Declarative data is all the data that is self-reported by your audience. This includes filling out the name, email address, mailing address, or phone number field on a form, or any information that the visitor provided to your business through a form or an interactive marketing campaign.
Behavioral data is the information you collect through a user’s actions and activity on your website, app, or landing page. So the information is collected through a pixel or a cookie installed on your site to track what the user is doing or where the user lands while browsing. The most common tool to analyze this type of data is Google Analytics or Facebook advertising.
The difference between first, second and third-party data
First-party data is all the information gathered directly from your consenting audience. The “first-party” alludes to who controls the data. Visitors, users, customers, clients, and subscribers must provide explicit permission to use their data, as they’re the owners of their personal information. With second-party data, the information comes from a secondary source or company. This is data that another company collected from their own customers and has either sold it to you or shared it as part of a partnership. The main advantage of second-party data is that it allows companies to access relevant data without collecting it for the sake of expanding their marketing reach and outreach efforts to a new audience.
Third-party data is mostly aggregated data. This is information provided by open data providers that share statistics about the behavior, habits, and preferences of consumers from various channels. Companies collect and sell this data for advertising, marketing, and re-marketing purposes in large volumes. However, third-party data isn’t collected on your usual or similar audience and is also available to your competitors. Third-party data is usually used to enhance your own first-party data in order to expand the reach of your messaging, discover new audiences, or increase the precision of your targeting.
Why first-party data is so important
First-party data allows you to get unique insights into your specific audience and customer base. This allows you to customize and personalize their experience in your marketing and advertising efforts. As the digital marketing landscape becomes increasingly competitive, first-party data gives businesses the advantage to break out of the pack with more accurate and more qualitative data. Since the data is collected directly from the source, it is more accurate and relevant to your business so things like data and privacy protections is easier to ensure, building trust with your audience, and you are also able to cut marketing costs from purchasing databases from third party companies, or spending additional funds collecting behavioral data from cold, broad ads. First-party data also allows you to get deeper insights into your audience and get to know their wants, needs, and interests easier.
Benefits of gathering first-party data
Get insights about your audience
Collecting first-party data through surveys, quizzes, or Q&As helps you gather more knowledge on your audience. With this deep dive of data, businesses can answer so many questions about their customers and prospects’ interests, pain points, and needs. Even if your audience is relatively small, first-party data can give you valuable insights. You can analyze your data for traits that your customers have in common and build out marketing campaigns that have customized marketing messages that generate more leads, grow your lists, and lead more prospects to purchase.
Optimize your retargeting strategy
By using the improved knowledge you have about your customers and visitors, you can create targeted campaigns that encourage your ideal customer to return to your site by using the information you already have based on recent browsing behavior or even past purchases and product interests. With first-party data, the more you learn about your customer, the better you are able to reach new audiences through different channels.
Create personalised messaging
Engage with your audience on what really matters and interests them. With first-party data you can segment your audience based on their place in the customer journey and send them personalized content and promotions that gets them excited to hear from your brand. It also helps them convert more and improve your open and click through rates.
Improve acquisition performance
By understanding what inspires customers to take action across different channels, devices, and platforms, first-party data can be a help to lower acquisition costs and boost campaign results. Using this data, marketers, and brands can create lookalike models or similar audiences. Brands can take what they know about their best customers – how they behave, what incentives and offers they respond to, what they’re interested in – and use it to target new audiences who are most likely to convert.
If you want to deliver a personalized, optimized customer experience from start to end, you need to prioritize your first-party data. With first-party information, you can target your audience based on interest, behaviors, and even purchase intentions. The more you invest in your first-party data strategies the more visibility and insight you have into how to improve your brand’s digital performance. Without taking advantage of this information, you could be missing out on significant opportunities to deliver an exceptional customer experience.
First-party data should be viewed as the driver for lower acquisition costs, higher customer retention, and what drives relationships and sales. To see what your first-party data collection can do for your business let the team at Idealgrowth work with your business to create a personalized strategy.
Brands doing business online have the advantage of owning, customizing, and improving the entire customer journey from awareness to long-term customer retention thanks to the available first-party data collected at nearly every touchpoint.