Data Collection is Rapidly Changing Your Paid Advertising. Are You Keeping Up?

Data Collection is Rapidly Changing Your Paid Advertising. Are You Keeping Up?

The digital advertising landscape is rapidly changing and affecting how marketers reach their intended audiences. Cookies no longer effectively track your customers or accurately retarget them. As a result, your attribution reports can no longer reflect the journey your customers take via third-party data. As an age of privacy control begins, something needed for some time now, marketers are now forced to get more creative with how they leverage data to better target their audiences and drive performance. But how will businesses continue to collect accurate data on their customers without third-party data? The answer: first-party data.

“First-party data is something every business should already be collecting.”

First-party data (i.e., data your brand owns) is something every business should already be collecting. Armed with this data, you can compile a new source of customer attributes that can be used to target and measure campaign performance. But what exactly is first-party data? Why should I even care? And what if I haven't started collecting this data or find it difficult to collect? Don't fret! In this article, we will review exactly what first-party data is, why the industry is moving to first-party, and the many ways you can start collecting it now.

So What is First-Party Data?

First-party data is essentially the data you collect directly from your audience's interactions in platforms you own or control, and is often offered by consumers directly for you to use. This data is owned by the brand and is collected from various sources, including your customer-facing websites, apps, CRM system, email, social media, and other data sources. First-party data can consist of a number of different types of data, including specific customer attributes, click-path data, social data, purchase data, and inventory data. While some of this data may be tied directly to your customers, It is important to note that much of the customer data is (or can be) anonymized to protect the privacy and comply with regulations such as GDPR.

Why is The Industry Moving to First-Party Data?

These days, personal data is not only collected for products, but also for their advertisements. Although some greatly value their privacy, there is no comfortable equilibrium between consumers’ desires for a more personalized user experience and their need to remain free from unwanted surveillance. As multiple regulatory bodies have attempted to rein in consumer data collection for years, marketers have been walking a fine line in collecting relevant customer data without compromising their privacy.

Unfortunately, perhaps as expected, most companies haven't done a very good job of maintaining this privacy. This became extremely apparent to marketers when Apple announced it would block third-party cookies and advertisers lost track of their audiences. This will further play out when the biggest industry data collector Google ends third-party cookies in 2024. As such, the interest in first-party data collection has been growing, driven by the fact that marketers are recognizing the vast potential it has to power digital advertising in new and interesting ways.

So How Do I collect First-Party Data?

The first step in collecting first-party data is to determine which attributes you want to collect and what source you want to get it from. You may find it helpful to reverse engineer successful campaigns you have to better isolate these attributes. Once you’ve narrowed down your options, you’ll want to think about how you want to collect this data. While new first-party data collection methods are sure to be on the horizon, some immediate resources you can use include:

• Website - Website data can be collected using first-party cookies, pixels, or server log data.
• App - Apps can collect data from a variety of sources, such as IP addresses, device information, system information, in-app events, push notifications, and location data.
• Sign-Up Forms: Increasing in popularity, sign-up forms are a perfect point to ask your audience specific information you want to know. Think warranty information or product registration.
• CRM system - CRM systems like Salesforce can be used to collect customer data such as customer attributes, purchase history, and more.
• Email - Brands can collect data by adding a pixel or code to their email templates to grab relevant customer attributes.
• Surveys & Polls - Surveys provide a unique opportunity to interact with your intended audience and collect specific information directly.
• Social media platforms - Social media can be used to collect and segment audiences based on their social profile information.
• Content Sharing: Offering valuable content in exchange for an email is a common method of collecting customer data. When doing so, think of more attributes than the email address they gave you. They also let you know they were interested in the specific topic they signed up for.
• Customer Feedback & Reviews: Often overlooked as a data source, customer feedback and reviews can give you valuable data nuggets on how your product or service is used by your audience. It may also give you new ways of thinking about who can use your product/service, or how to improve it.

How First Party Data Drives Digital Advertising

Let’s say you own a fitness apparel brand with a website where you sell clothing and accessories. A lot of first-party data can be collected from your website, through a server-side data collector, and allow you to build out a persona for a customer. By knowing things like their gender, age, location, and level of fitness, you can better leverage that data for ad targeting, creating a more personalized experience for visitors. First-party data can also be used to measure campaign performance and help identify areas where there could be issues. For example, let’s say you’re running a Facebook ad campaign to acquire new customers. By leveraging first-party data, you can track how users are engaging with your ad and where they are in their purchase journey. By collecting this data and analyzing it, you can determine if your campaign is performing well and how many conversions you’re driving with that ad spend.

Why Is First Party Data So Important Right Now?

First-party data is incredibly valuable right now as marketers are looking for new and creative ways to leverage their data. First-party data is often seen as more valuable than third-party data, as brands can more accurately target their customers and have greater insight into their journey. First-party data is also more valuable than second-party data because it is more accurate and less prone to issues related to data quality and privacy. With data privacy being a growing concern for customers, first-party data is an attractive option to marketers because it is anonymized and customers have given their consent.

Looking Ahead

While the transition period to first-party data for businesses will be challenging at first, it will open a whole new era of how we market to our audiences. Giving customers control over their data and who can advertise to them will flush out much of the spam advertising that crowds the marketplace, and will allow a brand to better target its messages and drive a more personalized customer experience by leveraging the attributes they have on their customers. At the end of the day, this has the potential to improve a brand's marketing campaigns, budgets, and ROI.