Switching to first-party data
Information is the currency of the digital age, and nowhere is that truer than with first-person data. Virtual transactions are valuable, but businesses can only maximise their sales and marketing strategies with first-hand user insights.
What is first-party data?
First-person (1P) data is information collected directly from internet users by the platforms they visit. This data usually includes user preferences, behaviours, spending habits, interests and engagements. Companies can only acquire first-person data through the websites they own.
Traditionally, online brands bought third-party (3p) data from tracking companies. This meant buying back their own analytics. Third-party data also raise privacy concerns for customers who don’t want their information tracked and sold.
So how will first-party data address these issues in the digital marketing industry?
Benefits of first-party data
1P data puts companies back in control of data collection, storage, and processing without paying a tracking company. First-person data costs less to generate and offers a much higher return on investment.
A 2021 survey on growing first-person data by the Statista Research Department reported that:
“60% of respondents stated they used their social media activities to grow or enhance first-party data. The most mentioned strategy was growing email lists via newsletter, named by 63% of respondents.”
Monitoring one’s own marketing channels is far more cost-effective for businesses. More importantly for their customers, it removes one of the online markets’ main data security risks.
When companies collect their own data, they help close the consumer trust gap. Surveys and emails remain an effective way to get internet users to volunteer this information. Social media apps also offer enough analytical tools to track the right metrics unobtrusively.
Why is there a shift towards first-party data in 2022?
First-person data, powerful marketing insights, and consumer trust go hand in hand. Brands will find it hard to engage with their customer bases without an open and trustworthy approach to data collection.
As for marketing capabilities, online retail is developing at a rapid rate. Brands need real-time access to audience information to keep up with market shifts and emerging trends. That’s only possible with first-person data.
2022 predictions for first-party data
Analysts have dubbed 2022 the year of first-person data, and for good reason. Brands retain full control of their metrics, which will be essential for data and risk management. It’s a 2-for-1 solution to company and consumer problems.
Looking beyond 2022, Google plans to phase out third-party cookies in 2023. The tech giant pushed back the 2022 deadline to give its Privacy Sandbox ecosystem more time to transition fully.
The initiative is meant to prevent browser tracking while supporting sites that protect user privacy. Over the next year, companies will need to invest in first-person data to keep up with policy developments.
User accounts and subscriptions become a commodity in a world without third-party tracking. Account-based sites can market directly to their profiles. Users can voluntarily give up information in exchange for access to platforms.
Companies that pivot now will be able to engage internet users for years to come.