Years ago, first-party data was an afterthought, especially in the world of programmatic advertising. The forgotten benchwarmer to the star players — cookies and third-party IDs.
Collecting, organizing, and activating first-party data was time-consuming, expensive, and unnecessary in the days when any marketer could buy and activate the identity, behaviors, and preferences of everyone on the web.
Companies didn’t have the budget, infrastructure, or incentive to store customer data — let alone formalize ways of collecting, analyzing, and activating it. Third-party cookies were a readily available and accessible way to move your ad dollars in the right direction.
Over time, marketers got savvier. They started to see the value in getting to know their customers, gathering that data, and storing it in a CDP, data warehouse, CRM, or other tools. But those bits and pieces of customer profiles weren’t enough to form a clear picture. Marketers still needed supplemental data to fill in the gaps, so they kept buying that data — until they couldn’t.
By 2016, consumer privacy concerns had reached a tipping point, prompting governments to enact new laws and pushing platforms to reconsider their tracking and targeting methodologies. Eventually, Safari, Firefox, and Chrome announced their third-party cookies were going away, upending every programmatic marketer’s existing targeting and measurement strategy.
However, wise advertisers saw the writing on the wall and built sound strategies for collecting and leveraging first-party data. Adopting similar strategies will define who thrives and who perishes in this new era of programmatic media.
Below, I explain why first-party data truly is now a brand’s most valuable asset and some of the basic strategies you can use to start collecting it in a scalable, privacy-compliant way.
Perhaps the biggest draw of first-party data — beyond the pressure to collect it — is its fidelity.
Unlike third-party data, you know exactly where the data came from and how it was collected. It’s a direct reflection of your customers’ preferences as they relate to your brand — as opposed to educated guesses about their intent and preferences based on a collection of data points from across multiple sites.
First-party data also lets you experiment with various acquisition, engagement, retention, and upsell tactics with far less waste. If you know who your best customers are and measure the types of content and engagement tactics they respond to, you can predict the kinds of campaigns that will attract more customers like them.
The challenge, of course, is collecting all this first-party data. Here are four basic tactics any marketer can use to gather first-party data.
If you have a digital presence, the simplest way to collect first-party data is to pixel your website. Adding tracking pixels from a service like Google Analytics will give you a definitive view of what actions users are taking on your site and how strong their intent to buy might be.
For example, say you put a pixel on a specific product page. If a user scrolls through all of the product photos, jumps down to read its reviews, and expands the product details, they are likely interested in buying that product. With that information in mind, you can send them a highly personalized ad featuring the product they’d been researching.
However, user data is only valuable if you’re able to tie that data to some identifier that you can use when trying to engage that user again (via email, SMS, or ads) or send that user ID to an ad platform to have them use it as a basis for building lookalike audiences — which is where authenticated IDs come into play.
Without third-party cookies, extracting value from any first-party dataset depends on your users, customers, and prospects volunteering what’s known as an “authenticated ID,” such as email or phone number. Which is why, as a consumer, you’re constantly offered a promo code, a freebie, or other incentives every time you visit a website for the first time.
Once marketers have an authenticated ID, they can orchestrate multi-channel journeys using engagement platforms like Braze and Klayvio to serve email sequences, newsletters, and text reminders that compel users to buy. With authenticated IDs, you can also send lists of users to your ad platforms to refine your targeting strategy, build retargeting campaigns, and create more accurate lookalike audiences.
In the post-cookie era, authenticated IDs are the connective tissue, linking up everything you know about every consumer. And they also link your site data to other first-party data sources, like your POS/loyalty data, CRM data, and email and engagement marketing data.
Many companies, especially SMBs, don’t realize the wealth of first-party data they already have access to. Commerce/POS solutions, CRMs, marketing suites, engagement platforms, and others collect large amounts of first-party data by default.
Marrying that data is the real challenge. CDPs are typically the solution many larger enterprises look to, but are often too expensive and have too many technical requirements for non-enterprise brands to leverage effectively.
The trick is to start small: identify a subset of data important to your growth goals. For instance, brands with a brick-and-mortar presence might marry customers’ online behavior with their in-store purchases.
Point-of-sale systems are a commonly overlooked first-party data source. Most marketers are under the assumption that it’s “too difficult” to link POS data with website, ad, and organic engagement data. But now that most vendors are adapting to the demand for first-party data, there are native integrations you can use to establish that connection in a few clicks. Take HubSpot’s integration ecosystem, for example.
Loyalty programs linked to authenticated IDs (such as emails, phone numbers, or even credit cards) are another simple way of connecting your customers' online and offline behavior, allowing you to create more relevant content, buy more relevant ads, and target other potential customers like them.
Website, purchase, and engagement data are great at deriving insights about your customers, but sometimes, it’s just best to ask them directly about what they want from your brand.
Online quizzes (which technically fall into the category of “zero-party” data) are a straightforward way to learn things about your customers that other data collection methods can’t uncover.
Digital-first D2C brands like Warby Parker, Hims, and Casper popularized this approach to make data collection feel like a fun, engaging questionnaire instead of an invasion of privacy.
Following the advice of the above collection methods, make sure that any quiz you serve your prospects or customers:
The cookie-pocalypse has been hanging over marketers’ heads for years. Yet because progress toward that cookie-less future has been slow, delayed, delayed again (and again and again), it seems large swaths of the marketing community were dubious — or at least in denial — of its reality, hoping their old methods of data collection and activation would still prove valuable.
But the death of cookies is already here. On January 4, 2024, Google Chrome began disabling 1% of third-party cookies and plans to stop their use completely by Q3 2024.
Marketers who haven’t embraced first-party data strategies won’t be able to target or exclude specific users in any meaningful way. Their ROAS will drop dramatically, forcing them to default to other, less precise user acquisition and retention methods.
Companies that create even the most basic first-party datasets will be in an exceptionally stronger position than those that don’t. Why?
Because they’ll be able to activate their data across ad platforms like The Trade Desk, Google, and Meta, whose advanced algorithms can then find similar and tangential audiences, serve highly personalized ads to the right users, and ultimately, drive efficient growth.
But once collected, what are the best methods for actually deriving value and activating your first-party data sets? Keep reading — we’re answering those questions and more in our next post.
John Joe Smith, founder and CEO of WasteNot, is hosted by Tom Triscari, founder of Quo Vadis, for a Q&A conversation on the future of audience suppression.
Many advertisers waste up to 40% of their ad budgets due to inefficient targeting, and they aren't even aware of it. In this article, we'll walk through how brands can use modern audience suppression strategies to improve advertising efficiency and performance.
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WasteNot is the only platform focused on allowing marketers to activate and optimize real time ad exclusions across all biddable media.