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How to Leverage First-Party Data in Your Digital Marketing Efforts

How to Leverage First-Party Data in Your Digital Marketing Efforts

Google plans on deprecating third-party cookies in early 2025, meaning businesses need to quickly find alternative ways to collect and leverage data. One of the most effective and accessible alternatives is first-party data.

First-party data isn’t a perfect replacement for third-party data, but it can provide your business with plenty of information needed to continue your digital marketing efforts and effectively reach your target audience long after third-party cookies are deprecated.

To get more insights into how to collect first-party data and use it in marketing, we talked to Dennis Still, Founder and Chief Insights Analyst at Bigfoot Analytics. In this interview, Dennis shares his thoughts on the importance of leveraging first-party data in a cookieless world. With years of experience as an analyst, data scientist, marketer, and researcher, Dennis holds a diverse skill set that allows him to figure out tough business questions through the use of analytics. He lives, eats, and breathes analytics, making him the perfect professional to discuss first-party data with.

Dennis’ insights are extremely helpful for any business looking to better understand how to use their data and prepare for third-party cookie deprecation.

What is first-party data and how is it used in marketing?

First-party data (1P data) is your data. It's a different type of data than what is gathered through cookies. It refers to information, mostly digital, that is collected directly about individuals with whom you have a relationship. That relationship can be from a company website, app, e-commerce site, POS from physical locations, any information you get from mail-in items, etc. It is a bit of information collected, categorized, and saved about individuals and their relationship with your company.

First-party data is potentially one of the most reliable data sources for a company to use because it comes directly from visitors to your website when they provide their information or from current and past customers who have trusted your organization enough to buy something.

Examples of first-party data or consumer data collection include:

  • first name
  • last name
  • address
  • date of birth
  • location
  • buying preferences.

First-party data marketing is typically used for personalization, targeting, customer insights, retention and loyalty, and cross-channel marketing. First-party data is used by companies to try to get existing customers to purchase more items. In non-profit sectors, it is used to identify who has given in the past, how often, and how to get them to give again.

Come 2025, if Google maintains its current path to move to a “cookieless world”, then first-party data collection and curation will be incredibly important for companies of all types. It will be one of the only ways to get at potential differences in customer behavior or audiences. Marketing agencies and even data practitioners will need to have access to more and more first-party data as part of their marketing strategy to build segmentation and audiences for all sorts of campaign modeling and data science projects. The reality is that data is becoming more and more complicated to get (think data privacy laws around the world). Not that it won’t be there, but it will become harder to look at all the minutiae of individuals. It will be about data aggregation to see trends in different cohorts and segments.

What can first-party data tell you about your audience?

Using your first-party data will give you direct insights into visitor/customer demographics, behavioral patterns, purchase history, content preferences, and communication strategies.

For instance, you may find that most of your customers are between the ages of 50-65, live in MT, SD, and WY, and drive pickup trucks. You will know this because you have collected data on date of birth (age), location (address, city, state), and what type of vehicles they drive (purchase history from your automobile sales company).

I’ll give you an example of current world third-party data compared with first-party data. Let’s say your website gets 5,000 users to view your home page via Google Analytics 4 (GA4). GA4 tells you that the demographic breakdown of the “sample” that they took of those 5,000 users is something along the lines of: 2,500 users from VA (your home HQ for the company), 500 from WV, 500 from FL, 500 from MA, 250 from AL, 250 from NH, 250 KY, and 250 from TN. You see that most of your users are on the Eastern side of the U.S.

Now, with your first-party data on those who have signed in to your website to either browse or purchase products, you have about 2,500 users who have given you their email addresses, phone numbers, and physical addresses. This data reveals that almost all of them signed in and are coming from VA (2,000) and another 500 are spread across the entire U.S. You now see from first-party data that most users who are engaging with your site are coming from VA. Your strategy may be to try to double down and focus marketing efforts on VA or look to expand someplace else.

What are some advantages of collecting first-party data?

The biggest advantage of first-party data is that you control and own it. It is YOUR data. It is saved and housed in your databases, data warehouses, data clouds, or CRM. It belongs to you. There are some responsibilities with that data ownership, like what you will do with the data and how you will use it. You will want to make sure your “usage of data” is spelled out and clear for potential users and customers. Be clear and precise about how you will use customer data to aggregate and develop trend analyses, that kind of thing.

Another advantage is that you can clear and curate your data to make sure it is useful. Sometimes with third-party data, you end up with a bunch of messy variables that you cannot make sense of and end up being useless for your marketing objectives.

You can also use your data to personalize all aspects of your marketing process. If you are selling blue striped shirts and you know that 1,000 of your customers have bought blue striped shirts in the last 2 months, chances are that they will probably be willing to entertain a marketing offer around blue striped shirts. You know this about them because you have tied your segmentation offers directly to your first-party data.

Lastly, a big advantage is that by using first-party data you can build longer-term relationships with customers. You can start to aggregate patterns of buying history around certain details and suggest marketing strategies to get those folks to buy again.

Can you share strategies or tips on how to collect first-party data?

The best strategy for collecting first-party data is to actually ask users, visitors, or customers for information. I’ve worked a lot in Software as a Service (SaaS) businesses and often the notion has been to “minimize hurdles to adoption” meaning that we should only ask for first name and email address to get someone into the system. That notion was fine 5-10 years ago, but now we need to be thinking about the “cookieless world” and trying to get as much information as we can about potential users or customers. Make sure you get the location (city, state), employer, and other things that help segment these users into potential marketing buckets.

You should also tie things like user accounts, CRM systems, social media accounts, mobile apps, and email marketing together so you have as complete a picture of an individual as possible. Now, you aren’t going to use that personally identifiable information other than to aggregate and examine trends. Users X, Y, and Z all have the same age, so do their buying patterns suggest similar outcomes? Think through your user personas in the marketing world to get target audience segments that you are interested in pursuing from a business objective.

Are there any tools or tactics you recommend for first-party data collection?

You need to make sure your CRM system, like Hubspot, can store and provide insights about customers. Who are they, how did they come to your site, etc? In addition, email subscriptions, questions or surveys asked on your company’s website, engagement with social media platforms, and customer loyalty programs (giving people discounts for signing up) are all good ways to collect information.

For me it isn’t about the tools themselves, it is about the collection of that data. You need to come up with strategies for making sure that Sally Smith, who uses two different emails to come into your site, gets connected in your CRM so you know she is actually just one person. You also know that Sally Smith has a Facebook profile called sally2_smith2 and works for a company selling toys. It is building out a way to collect all of this data, tying back to Sally Smith’s overall profile and then being able to segment Sally based upon her characteristics, like the fact that she is: female, 55, single, works for a toy company, and makes purchases of small tools from your website. All of these things can be classified/segmented so you can then aggregate all users who “like toys”, for example.

Think of a mind map for each individual person. What variables contribute to their uniqueness, but then also what variables are consistent with others? Start to build up those personas and target audience segments for your customers. All of this takes resources and lots of research to understand what truly drives people to buy from your company.

How does first-party data differ from third-party data?

First-party data is YOUR data. Third-party data is collected and potentially aggregated by some other source (like Facebook Insights). People are shocked sometimes to learn that Facebook Insights will basically take credit for most conversions to your site, even if it has nothing to do with Facebook campaigns. Of course they want to take credit, they are basically saying give us your ad money so we can take credit for your conversions, and then keep giving us your ad money.

Third-party data is NOT owned by you. You can export it, you can connect to it, but often you are at the mercy of whatever system you are using.

What aspects of third-party data can you not get from first-party data?

I think traditional attribution tracking is challenging on the first-party data side. Third-party attribution can give you more insights. However, I would argue that these insights are often lesser or weaker vs. what you get via your first-party data. A shift needs to happen in terms of how we look at digital advertising dollars for example. Instead of which tactic in Facebook or Google or Bing was more successful, we need to be thinking about how advertising helps “all ships float”. Again, the movement I see toward first-party data and fewer cookies is in the idea of aggregation. How did all of our advertising efforts impact sales, revenue, leads, and whatever your primary KPIs are? If we spent $2,500 this month and increased it to $3,500 next month, did we get an increase in revenue via first-party data and segments we care about? If older folks are on Facebook and we are targeting younger folks, then perhaps we should be advertising on TikTok instead. That kind of thinking.

All of this potential knowledge from first-party data leads to better targeting efforts for things that actually increase a company's bottom line.

With the shift away from third-party data, how can marketers prepare and leverage a first-party data strategy?

Marketing is going to have to get smarter with how it uses first-party data and not rely on easily accessible third-party data. As a data analytics professional, I have too often seen teams use “bad” third-party data to make decisions. In the end, those decisions end up costing clients money, time, and resources they cannot get back.

Marketing is going to have to shift to strategies around helping businesses get better at collecting and leveraging their own first-party data. First-party data strategies need to be implemented to make sure that the things a business needs to drive understanding of customers flow into the CRM and other first-party data sources.

Helping customers understand the importance of this shift will fall directly with marketing agencies and professionals working in this arena. 2025 is coming pretty fast. Marketers need to start prioritizing how the budget will be allocated when they can’t really see the impact from the third-party sources anymore. Focusing on this shift and getting clients better at using their own first-party data will be critical.

A strong place to look is the nonprofit world. For so long, many of these organizations have had to collect, collate, and build data environments that make sure high-giving donors don’t get the same messages as those who don’t give that often. It is about segmenting and aggregating that first-party data to make sure that donors feel appreciated. The same will be true for all marketing efforts heading into the future. It is going to get harder before it gets easier.

Is there anything else you want to mention in relation to first-party data?

I would highly recommend strategies that connect your tech team to your marketing team. Make sure you have a way of leveraging the potential first-party data you might need and getting it connected to places where that segmentation will be used to send marketing communication.

The more you can build out your first-party data strategy now, the better you will be in the long run in the cookieless world.

Preparing for a cookieless future

Starting to leverage first-party data is just one way to prepare for third-party cookie deprecation in Chrome. For an in-depth look at Google’s deprecation plans including alternatives to third-party cookies and action items for digital marketers, check out our blog post.

If you’re feeling unprepared for the upcoming deprecation of third-party cookies, reach out. As experts in digital marketing, we’re here to support your team during this transition, and we’ll make it as seamless as possible.

 

About Dennis: Dennis Still is a thought leader in data analytics and the power of meaningful business insights. He is currently the Founder and Chief Insights Analyst at Bigfoot Analytics. Bigfoot Analytics is focused on helping organizations with their analytics questions, both big and small. Always with the drive of Hunting for Insights to Dispel the Myths!

His many years as an analyst, data scientist, marketer, and researcher at large corporations like Thomson Reuters, and SaaS businesses such as GovDelivery, OptiMine, and When I Work, have given him the tools and skills necessary to quickly and efficiently guide stakeholders through the process of data collection and analysis. Dennis has helped hundreds of businesses save valuable dollars, helping them identify actionable information that adds to their overall bottom line.

Dennis loves helping people figure out tough business questions through the use of analytics. He is passionate about evangelizing how awesome data analysis, data science, and insights analysis are, and you will find him presenting at conferences, teaching students, tweeting, and blogging.

Dennis lives, eats, and breathes all things analytics and will inspire you to learn more about a topic that most folks find “boring”. He wants to help and empower individual users to succeed in understanding how their data can help their businesses.

Written by

Grace Hallen

Grace Hallen is a Digital Marketing Specialist at Perrill. Her passion for communication and crafting engaging content led her to Perrill’s marketing team. She loves flexing her creative muscles and finding clever ways to reach readers. In her free time, you can find Grace playing trivia at local breweries, exploring the Twin Cities or getting lost in a good book.

Author

Grace Hallen

Post Type

Article

Date

Apr 16, 2024