The writing is on the wall for marketing strategies that rely on third-party cookies, which until now, have served as the default infrastructure for enabling digital advertising across the web and other channels.
As consumers become increasingly privacy conscious, data privacy laws are becoming more comprehensive. Safari, Firefox, and Microsoft Edge have already sunsetted third-party cookies. After multiple delays, Google is poised to fully phase cookies out by early 2025, effectively ending third-party cookie data collection once and for all. But Google’s final deprecation date hardly matters: 50% of the web is already cookieless, meaning marketers need effective first-party data strategies now.
First-party data, which comes directly from your interactions with customers, offers a rich source of insights for right-timed ad personalization and omnichannel marketing. Why does this matter? In today’s privacy-focused world, leveraging first-party data is essential for maintaining a deep, effective connection with your audience.
What is first-party data and why is it important?
First-party data is information that customers share through your company’s owned channels, such as your website or app. This can include a user’s browsing behavior and purchase history, in addition to personally identifiable information (PII) like name, email, and phone number.
Additionally, first-party data includes data stored in your CRM from customer interactions, such as sales inquiries or transcripts from customer service support tickets.
The importance of first-party data lies in its relevancy and trustworthiness. Because first-party data comes straight from the source – your customers – it’s highly accurate and can yield rich insights into what your audience prefers and how they interact with your brand. This enables you to create more personalized marketing campaigns and customer experiences while protecting customer data.
Benefits of having a first-party data strategy
A first-party data strategy is a plan for collecting, connecting and resolving all the available data about your customers and prospects into enterprise-wide, 360° profiles of individuals and entities such as households or small businesses.
For many organizations, customer data is spread across siloed systems. These could include your CRM, CDP, POS system, email and SMS marketing solutions, ERP, and contact center data stores. With a first-party data strategy in place, you can unify these data points, resolve them back to individual customer profiles and make these profiles available to every division or line of business across your organization.
By connecting your customers’ first-party data, you gain a comprehensive view of each customer across channels. This benefits your company by helping you:
1. Deliver cohesive, consistent customer experiences thanks to a unified customer view
Achieving a unified customer view breaks down internal silos so you can collaborate seamlessly across the enterprise to deliver more personalized, frictionless customer experiences. Activating your data with a consistent identity framework that can span the broadest range of touchpoints across complex consumer journeys is the key to breaking down data silos, understanding your customer clearly, and getting more out of your technology investments.
Once your first-party data is connected internally with an enterprise identity, you can expand the reach of your marketing by activating your audience data across the digital ecosystem, including CTV/OTT and media networks. You can also begin to create and activate new, high-value audience segments with third-party data partners. This collaboration with your first-party data allows marketers to serve the right message at the right time through targeting and suppressing audiences and delivering personalized experiences across browsers, mobile devices, social platforms, and CTV.
2. Access clearer customer insights that fuel business growth
When you centralize and organize disparate first-party data points, it becomes possible to uncover trends and patterns in customer behavior that would not be visible with incomplete customer profiles or from third-party sources.
The analytics and data science teams in many organizations struggle with incomplete, out-dated and inconsistent customer views. Analytics conducted using fragmented customer views yields inaccurate scoring and ineffective targeting, messaging, offer presentment and worse. Over 40% of data analysts say they spend more than half their time preparing data for use in campaigns. This includes dealing with low-value “plumbing” tasks such as getting disparate data centralized and harmonized, leaving little time for generating the data-driven insights necessary to compete today.
If the entire enterprise is adding relevant data to each profile and that data is used to inform models for Next Best Action, personalization, churn prevention, upsell/cross-sell and more, customers feel valued. As a result, they’re more likely to stay loyal to your brand.
3. Maximize marketing impact by keeping first-party data updated
Advertisers need an effective targeting mechanism that reduces their dependence on third-party cookies and enables them to exceed the marketing performance they’ve experienced in the past. A first-party data strategy ensures your organization keeps your consumer data up to date so you can leverage it more effectively. Segmenting and activating audiences with first-party data not only significantly reduces the signal loss built into cookie deprecation, but it also improves accuracy across the entire journey from reach to conversion through to measurement.
4. Preserve consumer trust
Effective first-party data strategies operate within a framework of mutual value exchange. Customers need to understand both your data handling practices and the benefits they’ll receive if they share their data with you. If you prioritize clear communication and consistently deliver high-quality experiences, you can foster first-party relationships and brand trust while gaining a competitive advantage.
How to build a first-party data strategy
Building a first-party data strategy involves developing a comprehensive plan to collect, manage, and activate data gathered through your owned channels. To get there, you’ll need to:
1. Define your goals
A first-party data strategy can support a whole host of marketing and business outcomes, so you need to decide what success looks like for your organization. Start by identifying specific, measurable objectives that align with your broader business goals. These might include increasing cart size, improving customer service interactions, or driving higher conversion rates. Prioritize key use cases to get started, then expand and build upon early success. A data strategy is a journey, not a destination, so be prepared to continually optimize.
2. Determine how you’ll measure success
Customer identifiers built on first-party data outperform third-party cookies in terms of advertising effectiveness. For example, Omni Hotels & Resorts improved their advertising effectiveness by four times with signal-less solutions from Google’s Display & Video 360 and LiveRamp. To track the ROI on your first-party data investment, evaluate how you can show the impact of your first-party strategy on metrics like customer lifetime value, repeat purchase rate, and churn risk. It’s also important to consider if you’ll need a technology partner with advanced measurement and analytic capabilities.
3. Build customer trust with clear value exchange for sharing data
Key to a successful first-party data strategy is helping customers feel comfortable sharing their personal information and behavioral data with you. Ensure you have clear privacy standards that are easy for customers to understand and access, along with robust internal data governance policies that prevent misuse.
When asking customers to share data, clearly communicate the direct benefits they will receive in return for their data, such as personalized offers, enhanced customer service, or improved product features. This transparency builds trust and reinforces the value exchange, encouraging more customers to opt-in.
3. Gather customer data from across your enterprise
A successful first-party data strategy hinges on the ability to assemble complete and cohesive customer profiles using all available customer data from around your enterprise. To do this, you’ll need to identify any data silos that exist between lines of business and analyze data layouts to determine how you can unify information. During this process, consider the needs of stakeholders outside of marketing and configure permissioning in a way that sets everyone up for success. This will unlock additional use cases for first-party data, such as informing product development and supply chain optimization.
5. Ask customers to share data
Roughly 13% of Americans move every year. How likely are they to update your brand with this new information? But asking all of your customers for their updating mailing address annually is a non-starter – the request is likely to be ignored at best, or turn customers off at worst. Requesting too much information, or doing so in a way that introduces friction into the customer experience, can cause frustration and damage trust.
However, when you establish complete, cohesive customer profiles across your enterprise, data collection morphs into confirming key PII instead of a time-intensive collection of every data point at every interaction. Opt for methods that integrate seamlessly with customer interactions and are perceived as non-intrusive. For instance, consider leveraging transactional interactions for more detailed data collection, such as preferences or feedback during the checkout process. This value exchange is based on trust – customers provide first-party data in exchange for personalized experiences.
6. Create a detailed customer journey map
A customer journey map helps you understand the paths your customers take from initial awareness to conversion, upsell and beyond. By mapping how customers move through the funnel, you can identify touchpoints for collecting data that can be used to segment your audience and personalize your marketing more accurately. This is integral to a successful first-party data strategy because it ultimately allows you to engage customers more effectively across the entire buying lifecycle.
7. Fill first-party data gaps with cost-effective data enrichment
When companies design and implement their first-party data strategies they quickly identify gaps in their contact data and or they notice an over-reliance on one channel vs. another. For example, some retailers use mobile numbers at cash registers to connect to loyalty program data, making email marketing challenging. A sound first-party data strategy enables you to get the highest ROI from your data enrichment efforts such as contact append or attribute append, which fill in missing details by licensing from data sellers. When your first-party house is in order, match rates with data providers improve and you only buy the data you need making your customer records complete.
8. Invest in the right first-party data platform
So, you’re ready to put your first-party data strategy into practice – what tools do you need? A data collaboration platform is the best option to ensure your data is properly managed, integrated, and protected across departments and data systems. A data collaboration technology partner can help you collect and connect all the available first-party data from across your enterprise and assign consistent and persistent Enterprise Identifiers to fuel cohesive customer journeys. A first-party data strategy transforms your organization into a data-driven company fueled by the insights required to make informed business decisions that drive growth in a privacy-centric manner.
Develop a first-party data strategy with LiveRamp
You need better alternatives to third-party cookies to meet customer’s dual expectations for privacy and personalization without sacrificing marketing performance. Identifiers built on first-party data increase advertising effectiveness while maintaining a privacy-first approach.
LiveRamp can help develop a comprehensive consumer data strategy that pairs your first-party data with trusted partner data to unlock more customer insights, reach new audiences, and create more value for your business. Talk to one of our experts about how you can get even more value from your first-party data.
