First-Party Data’s Role in Modern Marketing

0
First-Party Data’s Role in Modern Marketing


The Gist

  • First-party focus. 75% of marketers still rely on third-party cookies, highlighting the need for strategies based on first-party data.
  • Inevitable shift. 9 out of 10 marketers agree first-party data is crucial, yet many lack a companywide strategy for its use.
  • Personalization pays. Brands using first-party data see a 2.9X revenue increase and 1.5X cost savings, underscoring its effectiveness.

The demise of third-party cookies, while a step forward for data privacy, is anxiety-inducing for marketing and advertising teams. A recent Adobe survey revealed that 75% of marketers worldwide still rely heavily on third-party cookies to reach target audiences.

That statistic alone underscores the importance of marketing strategies that are based on first-party data. Marketers know that moving on from third-party cookies is inevitable, with 9 out of 10 saying first-party data is more important than ever. Yet this approach will be an adjustment because harnessing first-party data for marketing requires a companywide strategy that not all companies have in place. 

In this article, we’ll define first-party data, describe the benefits and challenges, and discuss the most effective ways brands can use first-party data for marketing. 

What Is First-Party Data?

First-party data is collected directly from customers, site visitors and social media followers with their permission. It’s the equivalent of getting information directly from a friend, whereas third-party cookie data equates to someone telling you about a person you don’t know.

“A company’s own data about its customers’ and prospects’ actual behaviors remains the most competitive-edge component in a marketer’s arsenal,” said Jim Sterne, a marketing consultant, author, speaker, and founder of the Marketing Analytics Summit conference

Sources of first-party data include:

  • Activity across website, mobile app and product
  • Demographic data in your CRM
  • Social media comments, likes, shares
  • Email and newsletter subscribers
  • Survey data
  • Customer purchase history (products purchased, subscriptions, length of time as a customer)
  • Call center transcripts

Related Article: First-Party Data: Getting Creative for Cross-Channel Identification

First-Party Data: Benefits and Use Cases

With first-party data, you can tailor marketing campaigns based on what your audience has revealed to you directly rather than relying on second- or third-hand data or, worse, educated guesses. 

For instance, your website traffic data will show your most popular product pages; you can then include more features and content on these pages for even more engagement.

Brands using first-party data for marketing have achieved a 2.9X revenue lift and a 1.5X increase in cost savings, according to a Think With Google and Boston Consulting Group study.

However, first-party data is only beneficial if you know how to organize it (more on that later). But once first-party data is organized enough to take action on, the benefits include:

Precise Segmentation and Ad Targeting

Because first-party data is so reliable, marketers can more confidently segment customers and prospects into groups and create highly targeted campaigns based on how likely someone is to purchase.

Use Case: Amazon

After analyzing customer purchase history and product searches and views, Amazon segments users into different groups based on their preferences. Advertisers on Amazon can then target their ads to specific segments, ensuring their products are shown to users most likely to be interested.

A person using a laptop computer conducts Amazon product searches, which are visible on the screen, in piece about benefits and challenges of first-party data.
After analyzing customer purchase history and product searches and views, Amazon segments users into different groups based on their preferences.ymgerman on Adobe Stock Photos

 

A person using a laptop computer conducts Amazon product searches, which are visible on the screen, in piece about benefits and challenges of first-party data.
After analyzing customer purchase history and product searches and views, Amazon segments users into different groups based on their preferences.ymgerman on Adobe Stock Photos

Personalized messages and content

Marketers use first-party data to personalize messages, offers, and content that’s based on specific individual behavior, thus increasing the probability that users will engage and convert. 

Consumers very much prefer this approach, with 70% of consumers now expecting brands to personalize ads and product recommendations, and 76% getting frustrated when this doesn’t happen, according to McKinsey research



Source link

digiflowz
      Digiflowz
      Logo