First-party data: what is it and why is it important for marketers?

In recent years, brands and media groups have increasingly recognised the need to collect first-party data. In 2017, The Economist rightly wrote:

The world’s most valuable resource is no longer oil, but data.“

In 2019, it became clear that collecting first-party data was fast becoming a must-have for marketers as third-party cookies’ demise had started with Firefox disabling them on its browser.

On a consumer level, a study from Verizon Media and IPG stated that 87% of consumers were concerned about how their personal data is being used. Furthermore, and as we’ve seen during the pandemic, these concerns have increased. Businesses and individuals have shifted their behaviours from offline to online in order to stay connected.

With the GDPR and and other data privacy laws and regulations coming into force since 2018, marketers have realised how important it is to be collecting data directly from the source: their audience. Opt-ins and first-party data are now playing a key role in helping marketers to better understand and connect with their consumers.

What are the differences between first-, third- and zero-party data? Why is data so important? And why is it useful to marketers? In this article, we’ll be answering all your questions about first-party data and beyond.

So what is first-party data?

First-party data is the data directly collected by businesses from their audience, customers and prospects. A simple form with opt-ins allows you to collect and process their data! This type of data is only available to available by the website visited by the user.

There are two types of first-party data:

• 🗣️ Declarative data is your audience’s personal data, such as their name, first name, email address, country of origin, etc. So any information that the visitor will provide you with through a form or an interactive marketing campaign, for example.
• 💻 Behavioural data is collected about the actions and activities of a visitor on your website or other digital channels. You can collect this type of data through a pixel or a cookie, installed on your website to track what the user is doing while browsing. The most common tool to analyse this type of data is Google Analytics.

The difference between first- and zero-party data

Zero-party data is data that is voluntarily shared by a user and that is hard to infer or buy from a user. So whereas first-party data is generally required information that a customer will need to supply in order to make a purchase or to access a service, zero-party data is optional information that the consumer chooses to willingly provide to a company.

The difference between first- and third-party data

Third-party data is mostly aggregated data, cut into segments and anonymised, purchased from larger, specialised companies that are not the original collectors of that data. Marketers are usually using this type of data for advertising and retargeting purposes. However, third-party data isn’t collected on your usual or similar audience, and is also available to your competitors.

Third-party data is usually used to enhance your own first-party data in order to expand the reach of your messaging, discover new audiences or increase the precision of your targeting. But with the demise of third-party cookies, used by aggregators to collect data on companies and media websites, it will be more and more difficult to use third-party data within your advertising strategy.

Why is first-party data so important?

According to a study by Quantcast and Iligo, 65% of the respondents say first-party data is the most reliable type of data. So the advantages of focusing on this type of data are pretty obvious:

• ✅ It’s directly collected from the source, which allows you to know it’s accurate, qualitative and relevant to your business;
• 🔑 Privacy and data protection are easier to ensure;
• 👥 Marketers own the data they’re collecting directly from their audience;
• 💰 Money-saving, whereas purchasing databases from third-party companies can have a considerably higher cost;
• 😄 It allows marketers to get insights directly from their audience so getting to know them is easier.

As the European Union introduced a data protection regulation from May 2018 (GDPR), brands and media groups have understood the importance of collecting first-party data. After Google announced the scheduled end of third-party cookies on Chrome by 2022 (this has since been delayed by a couple of years and is currently announced for the second half of 2024), brands and media groups are on the look-out for a solution to make up for their loss.

The digital advertising business is a highly competitive one: advertisers who increase their search efforts will stand out from the pack with more accurate and more qualitative data. They are often willing to pay the price if the media can offer them effective targeting. A small amount of qualitative data will always be worth more than a large amount of imprecise data.

According to a survey conducted by Campaignlive, 96% of advertisers say they are ready for a world without third-party cookies. However, most respondents report using less than half the potential of the first-party data they own.

How can you collect first-party data?

Behavioural data is the easiest to capture. When you’re setting up your analytics, you may have been asked to add a pixel or a cookie on your website. This pixel will then send data about your visitor’s activity on your website to your analytics platform. Depending on the tool you’re using, the most common ones being Google Analytics and Adobe Analytics, you will be able to collect:

• 🧑‍🤝‍🧑 Demographic data;
• 🌍 Geographic data;
• 📱 The device they’ve been using to browse your website;
• ⏱️ The time they spend on your website on average;
• Etc.

But marketers will have to be creative when it comes to collecting declarative data. As consumers have changed their behaviours regarding whom they’re willing to give their personal data to, so brands and media groups are going to have to prove that they are trustworthy. There are many ways to motivate an audience to share their personal data:

• 🔐 Have a good privacy policy. In general, the establishment of a good Privacy Policy, providing clear and transparent information about how customer data will be stored and processed, creates a feeling of trust towards a company. They must, therefore, be given the opportunity to obtain prior information in a very transparent way and in simple terms. Have a look at our guide on privacy policy best practices.
• 🔄 Make it a value exchange, give your audience something in return for them sharing their data.
• 🥳 Include interactive content in your marketing strategy. Engaging with and collecting data from your audience work hand-in-hand when you include interactive marketing formats in your strategy. Most consumers are more likely to share their data in exchange for a prize or an entertaining format. It’s then up to the brand add a newsletter opt-in to their campaigns to be able to follow-up and send them personalised emails afterwards.

How interactive content can help you to collect first-party data

Let’s take a closer look at how interactive marketing formats can help brands and media groups to collect first-party data.

This interactive campaign was promoted across both Purina’s digital channels (Facebook ads, newsletters, influencers,…) and offline channels (flyers, samples, internal promotions), ensuring greater visibility with consumers.

The data collected in the photo contest was used to personalise the commercial messages. Each email sent to the participants thereafter was personalised with the name of the dog in the subject line, previously collected via a form. The brand found that, thanks to this customisation, the opening rate increased by 10% on average.

How can first-party data be useful to marketers?

First-party data is valuable because it has been collected directly from the audience that marketers want to reach. It’s qualitative and accurate, and businesses know it’s also relevant to them. More than that: businesses already own a significant amount of first-party data. So what uses can marketers do with it once collected?

1. Get insights about your audience

Collecting first-party data helps you to gather more knowledge on your audience. With a simple quiz or personality test, marketers can answer so many questions about their customers and prospects: what do they like or dislike? Which product would they like to purchase? And with a cookie dropped on their browser when they visit your website, you’ll also be able to know where they’re from, the time spent on your pages and where they go after leaving your website.

2. Be GDPR compliant

As marketers are the owners of the data they’re collecting, they can make sure they’re GDPR compliant. By adding an opt-in to your forms, you will be able to collect all necessary consents. Don’t forget to consult your company’s DPO and follow your company’s guidelines on the topic.

→ Read more about how Qualifio can help you be GDPR compliant.

3. Improve your retargeting strategy in advertising

First-party data can be used for retargeting and nurturing during the sales process. Marketers can create new retargeting strategies based on their improved customer knowledge. They learn more about their ideal customer, are able to reach out to new audiences through different channels using their first-party data list.

4. Create personalised messaging

By collecting first-party data, marketers can segment their audience and send them personalised emails and promotions. They can use the gathered data to engage with their audience about what really matters and interests them. Not only will they improve the open rate of their emails, but they will also convert more than if they’d sent a generic newsletter.

First-party data is the type of data that every marketer needs to be collecting and has the potential to increase their marketing results in the long term. Not only will they own that data but it’s also accurate and relevant to their business. However, marketers should be reminded that consent is trickier than it seems and that there are still many questions to answer on the GDPR front and how to collect first-party data in a compliant way.