Customer data has been in the hot seat for a while now.

From new compliance rules, data breaches, GDPR, and evolving social media algorithms, it can be difficult for companies and marketing teams to navigate best practices and legal regulations.

Many companies are turning to an owned media strategy, with a focus on gathering first party data to engage their audience.

With new third party data regulations looming, it’s high time brands put more effort into leveraging first party data in their strategies going forward — before you get left behind.

Here’s what you’ll learn from this article:

• What is First Party Data, and why it’s so important for marketers

• The benefits of first party data and how to collect it

• Use cases and challenges for leveraging first party data in marketing

• How to build a strategy around first party data

What is First Party Data?

First Party Data is information that you have obtained directly from your clients or website visitors. Examples of first party data include demographic information like age and location, email address, purchase patterns, preferences, or other contacts with your company. But the key here is obtaining that data directly.

First Party Data is considered the most trustworthy and transparent data to have because you own it, and it’s your responsibility to have consent to collect it.

Second Party Data is data collected from another trusted source. An example of second party data could be a SaaS company sharing customer data with their agency partner, giving the agency more insights into finding more similar customers. Second party data could be used to create relevant ads, nurture sequences, etc.

Keep in mind, there’s more risk using second party data in your marketing strategy, due to the fact that you’ve received their information from an unrelated source, not directly.

Third Party Data is data obtained from a third-party source, such as a research firm or any other external service provider. It can be compiled from a number of different sources, and it can be sold to or brought to companies to learn more about that audience.

The reliability of third party data has been coming into question more and more. With a “cookie-less future” just around the corner, it’s more important than ever to operate your business like a media company, own your audience, and have control of your content and distribution.

Why is First Party Data So Important?

As mentioned above, first party data is widely considered the most trusted and useful set of data. With first party data, your customers are sharing their data with you, and trusting that as a brand you won’t do anything harmful with it.

So why is first party data so important for marketing teams?

When used correctly, you can use first party data to create experiences that are tailored to an individual’s needs. This helps build trust and loyalty. It also allows you to create more effective campaigns and more relevant content, based on the information that you have collected.

First party data can also help you segment and target messages more effectively. You can create different versions of your message for each different item of data you have collected. This will increase the chances that your message will resonate with consumers and be more successful.

Additionally, recent changes to data privacy rules, particularly those pertaining to third-party cookies, pose a threat to tried-and-true paid advertising tactics. For instance, marketers won’t be able to influence eligible return customers by retargeting traffic away from their properties. This modification, which Google will make effective in 2023, increases the pressure on marketers to develop and use first-party data in place of third-party data in order to expand their businesses.

It’s no wonder more and more companies are operating like a media company. When you own your media, your audience, your content, and your distribution channels, you maintain control over your message and how its received by your audience.

The Benefits of First Party Data

Now that we understand how important First Party Data is, let’s take a look at some of the benefits of using first party data, compared to second or third party data:

• Collecting data in compliance with GDPR & CCPA

  GDPR and CCPA are regulations that protect personal data and give people more control over how their data is collected and used by businesses like yours. By collecting data that follows these compliance regulations, you’re demonstrating that you are transparent and take responsibility in the treatment of their personal data. Customers’ overall perceptions of your brand will likely improve as a result, helping to increase customer trust.

• Monetizing created segments

  As you gather first party data, you have the ability to divide your audience into smaller groups based on common characteristics, such as demographics, behavior, or interests. With these segments, you’re able to be more specific with targeted advertising, increasing the ROI on ad spend.

  Creating custom segments also gives you a chance for upselling and cross-selling by better understanding the value of their customer base.

• Using data that’s safe on all browsers

  Of course all your customers use different browsers, each with different data privacy regulations. By using first party data (which is safe on all browsers), marketers can ensure that their data collection and targeting efforts are consistent and effective across the board. This can make marketing efforts more safe and effective, while avoiding any potential legal penalties along the way.

4 Sources of First Party Data and How to Collect Them

So you know First Party Data is important, and you understand the benefits of first party data over others. But how do you go about collecting that data? And where should you collect it from?

Here are 4 main sources of first party data, and how to collect them:

• Your website

  Your website is a powerful and simple tool for collecting first party data. Tracking pixels are one example, which monitors behaviors and actions that takes place on your site, and collect that data for future use. The same goes for your online product (if applicable) and your company social media pages.

• Email

  We’ve been hearing that “Email is dead” for years now. Well, it’s not. Email continues to be the #1 driver of content engagement. And that engagement data is first party data you can use to nurture customers based on their relevant behaviors like email open, click-through, reply rate, etc.

• CRM and point of sale

  First-party data also includes customer relationship management (CRM) information for brands with online points of sale, such as a mailing address, phone number, and—most frequently—an email address. CRM data may link online and offline purchases, assisting businesses in retaining clients and increasing brand loyalty.

• Events (virtual and live)

  Scanning the badge of event attendees is another powerful way to collect first party data. As patrons approach your booth to discuss your service (or simply collect swag), getting their information from a badge scan allows you to tailor your message based on the event, the conversation, or whatever else you were offering.

Common Marketing Use Cases for First Party Data

With first party data, you have so many more options as a brand to create an exceptional customer experience for your audience. Here are just a few common use cases for marketing with first party data:

• Personalization

  When you have first party data like demographic, age, and interests at your disposal, use it to your advantage! Creating a personal experience for your audience drastically increases engagement with your content. And brands that know how to personalize their message win.

• Improve targeting precision

  With first party data, there’s much less guessing when it comes to targeting. Unlike “rented” land on social media platforms where you’re beholden to look-alike audiences and the platform algorithms for targeting, first party data means you have the most accurate customer information so you can get laser-focused in your targeting.

• Map the customer journey

  By gathering first party data, you can study the path your customer takes from discovering your brand to making a purchase to finally recommending it to others. With this information, you’re also able to determine which aspects of the purchasing process need to be improved.

• Close the loop on attribution

  It’s not always easy to identify where a lead originally came from. First party data insights bring light to what elements of your campaigns are working, while allowing you to analyze attribution more accurately and assess how shifting budgets affect both online interactions and in-person sales.

Common Challenges Marketers Face When Leveraging First Party Data

Getting first party data is one thing. But knowing how to leverage that data can leave teams scratching their heads. Here are some of the most common challenges in first party data implementation so you know how to avoid them when starting out.

• Lack of a Data Strategy

  You may have all the first party data in the world, but if you don’t have a plan for how to leverage that data, it’s useless. The best teams will agree on a strategy, analyze results, and make improvements for continued success. Others will “wing it” and hope for the best.

• Integrating Data Across Platforms

  Your first party data may be spread across different systems and departments. This presents multiple challenges, including a lack of access to certain data points, multiple people working on the same projects, and less visibility to your data as a whole. It’s important that teams cross-collaborate in order to integrate all your first party data across all platforms and systems.

• Taking Action in Real Time

  Your first party data strategy should not only be about what you do with that data, but when. The best time to take action on your first party data is right away because you’re still fresh in your audience’s mind. But it can be difficult to set up real time engagement strategies at scale, like automated email sequences, enrollment in strategic ad campaigns, etc. When starting out, take the time to make this a priority — you’ll be glad you did.

How to Build a First Party Data Strategy

Once you understand the importance of first party data, you can begin to develop a marketing strategy that leverages this data to its fullest potential. Here are some steps for how to build a first party data strategy:

• Identify the data you want to collect

  As part of your strategy, you’ll want to be specific about the first party data you collect from your audience. Think about what data will best serve your company, as well as your audience. If you don’t think certain data will be helpful to you, don’t ask for it. Try to be as organized as possible from the beginning with their data, so it doesn’t become a jumbled mess you have to clean up later.

• Develop a plan for collecting the data

  Your plan for collecting first party data has a lot to do with your content strategy. What does your audience care about? What will be valuable enough for them to justify handing over their information? Research other companies in your space for inspiration. See how they collect your data, and what they do with it. From there, you can start creating content.

• Create your content

  This part can seem daunting for teams starting out — but it doesn’t have to be. You don’t have to blow your entire budget on high-level video production or beautifully designed PDFs. Keep it simple, and remember to always provide value with your content. Things like surveys or questionnaires are a great way to get an inside look at your audience’s mindset, with the ability to use the information in the survey for future engagement. Video content is another great option. Just remember to focus on the quality of the content itself, not the production quality. (Here are more tips for producing quality media content on a budget.)

• Continually analyze your data

  Once you’ve started collecting data, analyze it regularly. Look at the information from all angles to identify trends and patterns. This can help you better understand your customers and their needs, and can provide valuable insight into how to improve your marketing efforts. For example, see which segments are most responsive to your content. Then you can double down on what’s working, and stop what’s not.

If your business is currently leaning heavily on second and third party data, you should consider leaning into an owned media strategy with first party data — before it’s too late. AudiencePlus helps champion the return of owned media by creating content and community that empowers marketers to become their own channels for content distribution.

JK Sparks | About the Author

Head of Marketing, AudiencePlus

JK is allergic to the words “guru, ninja, and hack” when used to describe anything marketing related. Instead of chasing the latest “growth hack” he’s focused on building sustainable and predictable levers that fuel healthy growth. This philosophy has led to success in both bootstrapped and well-funded environments scaling from <$100K to more than $100M in revenue. You can follow him here.