An Introduction to First Party Data for Brands and Marketers

Brands and their agencies are finding out just how powerful First Party Data can be to help them build meaningful relationships with their customers. In a world where everyone is a publisher, having access to data that is proprietary and not available anywhere else is extremely powerful.

Despite having grown up with social media, it still surprises me to scroll past an ad on Instagram from a company whose website I had just browsed through. These ad banners feature deals on products that look very similar to the ones I had viewed, tempting me to take another look—and I often do. This is the work of first-party data at its best.

These experiences might not be possible in the near-future, especially with efforts made by big tech companies to increase the privacy of their users. With the impending decline of third-party data, marketers are considering investing in first-party data to reconnect with consumers.

What is considered first party data?

First-party data is the most important and relevant data for a company. It gives information about a brand’s own customers, users, and visitors, allowing valuable insight into how these individuals interact with a brand across any and all channels. Brands then use this data to understand consumer behavior and as a blueprint for intentional and effective marketing.

Compared to second-party data, which involves sharing data with another brand, and third-party data, which is aggregated and owned by a large organization and available to any paying person, first-party data is exclusive to a brand and often the least expensive option. While second- and third-party data should be used as a complement to first-party data, many companies rely largely on second- and third-party data for information—think of sellers on large marketplaces like Amazon, Wayfair, and Walmart. But with the rise in privacy concerns, especially following data scandals, there has been a move towards curbing third-party cookies, forcing marketers to find another way to connect with consumers.

Why should marketers care about first party data?

The Facebook-Cambridge Analytica scandal in early 2018, where more than 87 million Facebook users had their data sold to the political data-analytics firm, can be considered a tipping point for concerns over data privacy and catalyzed a conversation about privacy rights. It had been normal for companies to collect their customers’ data without them knowing, which speaks to the issue of trust between companies and their consumers.

A survey of customers in several countries, including the U.S., found that 53 percent of people across markets distrusted “their connected devices to protect their privacy and handle their information in a respectful manner.” An overwhelming majority (75%) agree that “reason for concern about their data being used by other organisations without their permission.”

Large tech companies, notably Google and Apple, have announced plans to better protect people’s data. Google revealed in January 2020 that they planned to end third-party cookies by 2022, while Apple’s next iOS14 update will “require apps to ask for user permission before tracking their data across apps and websites owned by other companies.” There have inevitably been concerns around and pushback against Apple’s updates, as 56 percent of marketers expect to see a negative effect from these barriers to advertising.

Amazon, one of the biggest marketplaces, have also raised barriers to brands receiving consumer information. The amount of data that sellers had access to previously was limited to a customer’s username and street address; starting in April, sellers will need to give an explicit reason for requesting this data. Wayfair and Walmart have similar restrictions, where access to valuable consumer information is a tradeoff for using the marketplaces.

How can brands utilize first party data?

What the impending end of third-party data means is that marketers have to find a better and more transparent way to connect with their customers. Privacy regulations also mean a move towards brands earning their consumers’ trust and building a strong consumer base. The merits of first-party data are clear, but brands have struggled to tap into this gold mine because it’s “messy, disorganized, and spread across a bunch of disconnected systems that were never meant to integrate.” This is where tech solutions like Brij can help brands to leverage first-party data to reconnect with their consumers.

Can marketers still purchase data from outside sources?

Depending on your industry, you may have been integrating data from multiple sources to inform your media targeting, persona development, creative messaging, and a host of other important decisions. After all, is there a more overused phrase in the past 10 years than "data driven?"

Those outside sources, however, qualify as third-party data, meaning marketers will be limited in how they can utilize these outside data sources. That's not to say that third-party data will be completely irrelevant for some applications, but the limits detailed above mean that smart marketers are rapidly finding ways to minimize that 3rd party data as soon as possible, otherwise they're at risk of falling behind their competition on multiple fronts.

The risk of ignoring types of data in your data collection efforts

It's important to keep in mind that customer data is precious and valuable, and the companies that will thrive in the next decade are the ones who take great care with the accuracy, privacy, and consent that their customers and users provide. Every interaction that a brand has with a consumer can be a source of value, assuming those engagements are above board and aren't hidden behind some misleading interaction mechanism.

At best, companies who ignore 3rd party data restrictions will find their digital marketing options drastically diminished compared to their competition (see iOS14 notes earlier in this article). At worst, however, marketers may find themselves on the wrong side of GDPR General Data Protection Regulation), CCPA (California Consumer Privacy Act), or any number of emerging privacy and data protection regulations.

Ways to leverage high quality 1st party data

Different revenue models require different data strategies, but here are several ways to leverage 1st party data once you're collecting it using above-board, modern best practices.

Brij as a solution for first party data

Brij’s one-touch registration and reorder platform incentivizes consumers to register their products with a simple scan of a QR code or NFC tag, giving brands access to first-party data. Consumers gain access to product information, warranty activation, discounts, and much more, while brands have a secure way to deliver a personalized experience.

In the post-big-data-era, the rise in privacy concerns means moving towards a more transparent brand and consumer experience. Investing in first-party data isn’t just a question of profit—it’s one of morals.