In the last installment of our Data Dive blog series, we talked about the limitations of third-party cookies and what advertisers are doing to prepare for a world without them. Here we outline the benefits of a strong first-party data strategy and offer best practices for first-party data collection.
Emerging Alternatives to the Third-Party Cookie
With third-party cookies going away, advertisers will need to find a new way to facilitate targeting and personalization across the open web. Beyond contextual and cohort-based audiences, people-based IDs will play a large role in helping advertisers connect to platforms and partners once third-party cookies are phased out.
Many companies have already started developing these alternative identifiers, like LiveRamp’s RampID and The TradeDesk’s Unified 2.0. For brands looking to test the new IDs entering the market, a foundation of opted-in, first-party data will be key.
Let’s dive in by first defining the different types of data – and exploring why first-party data will be so important to a brand’s success in a post-cookie world.
What’s the Difference Between First, Second, and Third-Party Data?
First-party data is collected and owned by a brand. First-party data is differentiating (because it is proprietary), relevant (because it relates directly to the brand), and reliable (because it comes straight from the source).
Second-party data is collected, owned, and shared by a trusted partner. Second-party data partners help brands achieve scale by matching their behavioral data with syndicated audience segments.
Third-party data is collected via multiple sources, some of them unknown, and shared by an aggregator. While third-party data typically offers the most expansive reach, it can often be modeled or inferred, leading to inaccuracies.
Why is First-Party Data Collection So Important?
First-party data gives brands control over their marketing destiny by allowing them to build real and trusting relationships with consumers. As the relationship develops, brands can better understand consumer behavior, product preferences, insights, and buying signals over time.
By owning a first-party data set, a brand can also test addressable marketing campaigns across multiple channels without relying on third-party measurement. Finally, with first-party data, brands can increase efficiency and ROAS through true cross-channel optimization and attribution.
Where and How to Collect First-Party Data
With the deprecation of third-party cookies on the horizon, brands are exploring new ways to collect opted-in consumer data. There isn’t a one-size-fits-all strategy when it comes to first-party data collection. While factors like scale and quality are important to consider, it’s crucial to prioritize transparency and trust when exploring the following acquisition channels:
Brand Website & Owned Apps:
Brand websites and owned apps can be considered the “face” of an organization. First-party data can be acquired through these channels via user registration, offers, promotions, contests, and online customer support. Some beneﬁts include consumer-driven engagement, high accuracy, and privacy controls. Drawbacks might include limited access to scale and data attributes.
Email campaigns enable brands to connect with vast audiences while also allowing for segmentation. Data that can be acquired through email campaigns include interest and intent. Some beneﬁts of email campaigns include personalized engagement, transaction-based insights, and privacy controls. Cons include limited access to attributes.
Social media is a great way to reach new consumers and stay in touch with existing ones. Advertisers can leverage this channel to acquire polling data, customer support and feedback, and transactional data. Pros of social media may include consumer-driven engagement, ease of use, and low costs. Drawbacks include limited scale, diﬃculty gathering data, and broad data sets.
An e-commerce platform manages inventory, customer accounts, shipping, and sales data. An example is transactional data. Beneﬁts include large scale, accuracy, and strong behavioral data. Some drawbacks include diﬃculty giving notice to consumers and the anonymity of some purchase channels.
Data Append Partners:
Data append partners ﬁll gaps in existing information such as contact information, email addresses, and more. Pros of data append partners include large scale and breadth. Disadvantages include high cost and lack of insight into consumer permission and accuracy.
Consumer Engagement Platform:
Consumer engagement platforms – like Fluent – help brands collect self-declared insights directly from consumers. Some types of data that can be acquired through this channel include surveys, offers, promotions, interest and intent, and conquesting. Beneﬁts include consumer-driven engagement, accuracy, fully-customized data collection, privacy controls, and large scale – though resources are required to partner effectively with a platform provider.
Download our full cheat sheet on the pros and cons of first-party data acquisition channels here.
The Future of First-Party Data Collection
We’re entering a new era in which consumers have a lot more control over their privacy. To mitigate the looming uncertainty, marketers need to take a privacy-focused approach to ﬁrst-party data collection. Overall, effective first-party data collection tactics should allow brands to secure explicit consent, gain insight into consumers’ interests and preferences, and deliver more personalized advertising experiences.
To learn more about the importance of building a robust first-party data strategy in the evolving advertising ecosystem, download our latest report, “Now or Never: Thriving in a Post-Cookie World with First-Party Data” here.