Is There More to First-Party Data Than What We Know?
Organizations today know that they can only create differentiated value when tapping into customer journeys and delivering contextual and deeply personalized experiences—developing the capacity to deliver what the customer wants when they want it has become essential to drive brand value.
It is now clear that great customer experiences and positive business outcomes need significant data. While organizations have leveraged third-party cookies to collect data until now, changes in the data collection landscape, collection methods, and an increase in privacy laws have compelled organizations to reduce their reliance on third-party data and embrace first-party data.
First-party data is information about the organizations’ customers from offline and online sources. All the customer data residing in and managed from company websites, apps, CRM, social media, surveys, etc., fall under the first-party data category. Demographic information, purchase histories, time spent on websites, personal interests are also first-party data examples.
The value of first-party data
According to research, almost 85% of marketers in the US and 75% in Western Europe consider increasing their use of first-party data. That first-party data can be collected for free further makes it more attractive because of its cost-effectiveness and capacity to be segmented and monetized easily. However, companies owning first-party data must ensure that they have all the required customer consents in place cognizance of GDPR norms.
As these initiatives scale, first-party data helps organizations create better-personalized experiences. It becomes easier to know your users and divide them into specific groups for targeted messaging. It is the most transparent form of data since organizations own it and need to take customer consent to make first-party data GDPR and CCPA compliant. In this age of GDPR, making sure that the data you are using is collected legally and with support is essential to stay on the right side of the complex compliance and regulatory landscape.
Organizations can also integrate first-party customer data from different sources such as surveys, games, apps, websites, etc., and get a complete, 360-degree view of the customer. Identifying customer likes and dislikes, preferences, and behavior patterns become more accessible and more accurate.
Building in method to the madness – Crossing the privacy chasm.
While first-party data brings us closer to becoming more customer-centric, organizations must understand that merely collecting gigabytes of first-party data will not deliver them to success.
While personally identifiable information (PII) or first-party data is a means to understand the customer, a bid to leverage this data in preparation for a cookie-less and device ID-less future can cause organizations to jump on the data accumulation exercise. But while focusing on collecting first-party and PII data is essential, it is also necessary to ensure customer trust and privacy.
The third-party cookie party only ended because of the boundaries they pushed regarding privacy. The mechanism seemed highly unreliable, non-transparent, unstable, and non-persistent. When collecting first-party data, organizations must get focused on building direct relationships with their customers. Relying on device IDs for data collection is also futile since it also makes privacy concerns.
The writing is on the wall – organizations need only to use privacy-compliant data.
Welcome Zero-party data
Zero-party data has now become the new buzzword in the data world. A type of first-party data, zero-party data, is also collected directly from and provided voluntarily by customers. Imagine the kind of data a customer would give a store associate to help them purchase. Information like budget, size, demographic information like age, taste/style profile, eating habits, etc., that helps drive better personalization is called zero-party data.