What is first-party data?
First-party data is information that is collected, owned, and managed by your brand on your own prospects and current customers. According to Rob Patton, Data Axle’s Vice President of Strategy, there is some debate in the industry over the definition. Patton says, “First-party data can be comprised of any engagement with a user, prospect, or customer as long as the user can be identified either directly or via anonymous ID. Engaging with an ad, landing on a webpage, logging in at that webpage, or downloading an app are all first-party data capture-points that companies can leverage.”
Why you need first-party data
According to Google and Econsultancy, 92% of leading marketers said using first-party data to build an understanding of their audience is critical to growth. Why? Because insights you gather from first-party data inform all marketing strategy components. Email creative and copy, loyalty program design, crafting in-store experiences and merchandise displays are all informed by first-party data.
The benefits of first-party data:
How first-party data & third-party data work together
In order to understand which messaging and deals resonate with your audience, you will typically need access to a holistic view of your customers. Often brands need to supplement first-party data with third-party data from a reputable data provider to fill in the knowledge gaps you have on your customers’ behaviors and needs. While first-party data is comprised of your interactions with your customers, third-party data takes the totality of their tracked online behavior into account in order to provide your brand the depth and breadth of data you need in order to know what drives your audiences. Third-party providers like Data Axle have access to over 16+ billion data points across an audience of 320+ million consumers and 15+ million businesses. Brands can use this data to understand your audience outside of their interactions with your brand – providing insights on demographics, values, interests, and behaviors to improve personalization through segmentation, personas, predictive analytics (and more).
Example: Enhancing the customer experience third-party data
A bank may know which financial products a consumer uses, but be unaware that the person is expecting a baby and their financial needs may change in the near future, or that they are a travel enthusiast that may be in the market for a credit card with travel perks. You probably have your customer’s email address, but third-party data can provide you with their social media handle, as well as what other products they enjoy researching and purchasing. In addition, third-party data allows you to make better recommendations and predictions and understand which perks will motivate certain audiences to login. For example, free shipping or BOGO offers might speak to one of your target audiences, while another might be more motivated by gifts with purchase or loyalty points.
Improving your first-party data through logged-in users
First-party data is typically collected using tracking pixels or cookies, website analytics, app data, social media, marketing campaign activity, and purchase history. Now that third-party cookies are being phased out by Google (and other browsers, such as Firefox and Safari, have already limited cookies) many companies are worried about how this will impact their digital programs.[1] In fact, a 2019 Google study found when third-party cookies were turned off and users were exposed to non-personalized ads, they saw a 21% increase in user clicks to close an ad.[2]
To thrive in a cookie-less world and enable continued personalization for users, companies are now prioritizing the acquisition of new first-party data assets via logged-in users. Logged-in users provide the best first-party data, not only because they provide correct information, but because their login is the basis of an ongoing relationship that will yield richer data over time.
This raises two questions:
Personalized content incentives
Consumers crave personalization; 86% of marketers have seen a measurable lift in business results from their personalization campaigns.[3] Requiring logins is a good way to provide users with personalized experiences that will keep them engaged. Personalized interactive experiences such as quizzes, customizable guides, unique recommendations and games are all great incentives for consumers to log in.
Brand example: Amazon’s personalized recommendations
eCommerce giant, Amazon generates 35% of its revenue from its recommendation engine[4], proving that Amazon’s algorithm knows what products consumers need, often before they do. Amazon requires users to be logged in if they want to see personalized recommendations. For Amazon users, there are more reasons than one to login – from the brand’s subscribe & save program, to daily deals – not to mention the fact that users can’t order products without creating an account. However, Amazon’s highly personalized recommendations are a value add to consumers.
Tangible Incentives
Consumers love a deal. There are several ways companies can entice them to log in by providing deals and prizes. A recent Data Axle survey found that consumers are more willing to share personal data if they receive something of value in return. In fact, about half of consumers will share personal data in exchange for perks in a rewards/loyalty program, free shipping, discounts/coupons or a free gift with purchase. Companies can provide exclusive offers to users who are logged in, such as subscription discounts, cash back offers and BOGO sales. Providing prizes through raffles or sweepstakes is also attractive to consumers and will help prompt them to log in.
Brand Example: Barnes & Noble
Barnes & Noble customers value the perks they get from their B&N membership so much that they are willing to pay for the privilege of having access to special members-only deals. Barnes & Noble entices book lovers to sign into their membership account to take advantage of deals and perks, such as free shipping.
Boosting first-party data with third-party data will help brands prepare for a cookie-less future. Using valuable insights gleaned from third-party data, companies can entice customers to log-in and keep their first-party data fresh and customers engaged.
Want to learn more about how third-party data can help supplement your first-party data and provide you with invaluable insights on your prospects? Download our whitepaper or get in touch with your questions.
[1] https://martechtoday.com/deep-customer-relationships-will-always-win-over-lazy-shortcuts-239894 [2] https://services.google.com/fh/files/misc/disabling_third-party_cookies_publisher_revenue.pdf [3] https://www.forbes.com/sites/blakemorgan/2020/02/18/50-stats-showing-the-power-of-personalization/#382c56a02a94 [4] http://rejoiner.com/resources/amazon-recommendations-secret-selling-online/