Jonathan Airey is director, customer success APAC at Tealium.
Once the king of the marketing realm, third-party data has lost its lustre and is now becoming second class, with the limelight firmly back on first-party data. Yes, companies have always had first-party data but as budgets tighten and customers pull back on spending – especially within the context of the current climate – the time for first party-data has returned. The need to provide more personalised, relevant customer experiences is also forcing the marketer to pay attention to where their data is sourced from.
Traditionally, there was never any reason not to use third-party data. It worked well, was relatively cheap, readily available and made it easy for marketers to build personas. This has changed however, as technologies that make first-party data truly powerful (like customer data platforms and machine learning) are now increasingly accessible and functional. A feed is only as good as its ingredients, making it the right time for marketers to shift to a first-party data strategy.
Since first-party data is collected along with consent (e.g. when customers authenticate or opt-into cookies) the data is accurate and complete, perfect for delivering better customer engagement. Third-party data is sub-optimally sourced and can be risky and error prone. It’s also data that doesn’t have any direct link to the customer. In comparison to first-party data, which is behavioural and used to enrich identity data, there’s a clear differentiation on which set is better placed to create a more personalised customer experience.
The future of the customer experience rests on what data consumers are willing to hand over, and the strategies that companies use to maximise its value. Welcome to the world run by first-party data.
Increased compliance with current and forthcoming privacy regulations
The evolution of data privacy regulations and the rigors of crafting personalised customer experiences as a result are elevating the importance of first-party data.
Consumers and regulators alike are pushing new data privacy rights. For example, following the Australian Competition and Consumer Commission (ACCC) Digital Platforms Inquiry, the Federal Government is scheduled to review and reform the federal Privacy Act in 2020-2021. It is expected there will be a focus on improving and bolstering the definitions of consent and expanding the definition of personal information to include online identifiers like cookies and other tracking technologies.
The ability to know what data companies collect, to delete that data, and to compel legal action when it’s misused, are now compelling. Prioritising the use of first-party data throughout your marketing funnel helps create a process for meeting customer demand who want companies to be better stewards of their personal data.
Delivery of consistent customer experiences across the entire organisation
Developing a first-party data strategy goes beyond marketing to impact many customer-facing departments so it’s important to build a sustainable data supply chain.
Get buy-in early on any new strategies and technologies and determine what data will be collected. A multi-departmental team will also need to be formed to oversee the strategy long-term. Then, standardise the data to ensure consistency and clarity. Don’t forget the need to review the process regularly and activate the data across your different channels. Data requires ongoing checks that ensure its consistent and accurate before being used in a way that respects the wishes of your customers in how you use their information.
It’s not always going to be all or nothing
A data strategy won’t always only use first-party or third-party data. Marketers need to evaluate whether a mix of the two works better for the business. Many will continue to operate with some level of third-party data because it is needed for additional reach and scale.
A data-first data strategy is the key to manage your entire event data flow. This means you get more out of your data, it is better protected and you’re better positioned to do more with that data in the future.
Get out of the mindset that your first-party data strategy has to be finalised before starting. Start to build a data framework that sets the standard for data as a valued company asset. This will help accelerate your company’s digital transformation, personalisation marketing initiatives and compliance efforts.
Data is where the customer experience begins and ends
Across all industries, customers expect the same thing: seamless, personalised experiences, multiple channels through which to engage and the ability to trust that their personal data is in good hands.
A first-party data future is where marketers are constantly rethinking the kind of data being used, how this is being collected, how it’s distributed and how it’s secured. This approach ensures marketing dollars are being efficiently used and know you’re not letting anything go to waste. This goes a long way in transforming the role that marketers and brands play in creating an optimal customer experience.
There’s value up and down the organisation with a first-party data strategy that is backed up by new technology. Switching to a first-party data strategy won’t happen overnight, but you can unlock the pathway by investing in a data-first Customer Data Platform