5 Reasons Why You Should Focus on First-Party Data

By Team Logicserve

  • December 28, 2018,

Today marketers have access to different types of data – first-party data, third-party data, transactional data, online data, offline data, operational data and soon. Each of these types of data has its benefits and limitations. So, coming to the big question – which of these data should you focus on.

If you’re going to start with one type of data, then it’s highly recommended that you focus on first-party data. Here’s why first-party data is growing in importance and why it should be your No.1 priority.

First things first,

First-party data – Definition

Simply put, first-party data is the information that a company or brand collects by itself and owns completely. First-party data can be collected both online and offline from customer interactions.

Online methods – In-site search queries, product views, form submissions, etc

Offline methods – In-person events (trade shows, store visits), physical coupon redemption, account information, customer demographics (age, gender, city, pin code), sales calls, etc

What isn’t a First-party data?

Any data that you collect from another party is second-party data or third-party. Very often, publishers and advertisers monetise their first-party data by selling it with others. Any data that remains in-house exclusively is first-party data.  

Why Should You Focus on Building First-party data?

Reason #1: Privacy – The Big Differentiator

When you collect data directly from your customers and potential customers, you retain full control over the data. Data privacy regulations like GDPR (General Data Protection Regulation, EU) and ePrivacy require you to have a separate consent from users for each purpose like retargeting, personalisation and more.

When you collect data from third-parties, you must have explicit permission from the customer for each purpose, before you can use it. Additionally, there are various limitations on what type of data may be passed to you from a third-party.

As you can see, both second and third-party data come with severe limitations and requirement of explicit permissions. This is where first-party data can help you avoid privacy violations and other tangles.

Reason #2: Puts you in Full Control of Your Data

With first-party data, you can retain full control of the data collection process as well as data usage. This helps you make the most use of the collected data for marketing, which in turn leads to improved sales.  

Reason #3: Customers are more willing to Provide Data

Let’s face it. Customers are more likely to provide you with accurate and valid data whenyou approach them directly. They are not likely to trust a third-party, withwhom they have never interacted.

With first-party data, the connection between the customer (data subject) and the brand (dataprocessor) is more direct, thereby helping to generate trust between the twoparties.

Reason #4: It’s Cheaper

Compared to collecting data from a third-party vendor, it’s cheaper to collect data directly from your customers and target customers. Yes, collecting data and processing it may require additional time and effort on your part, but the results are indeed worth it.

After all, you would be collecting most of it (transactional data) anyway. So why not, go the extra step and get permission from your users for using it?  

Reason #5: Optimisation of Data for Better Personalisation

The main idea of using data to fuel your digital marketing campaigns is to make it moreoptimised and effective. You are working to target ads better and provide apersonalised marketing campaign.

With first-party data, you can quickly create a “unified” customer view that helps to provide you with accurate insights on – customer lifetime value, customer intent, position on the sale funnel, and other vital statistics. This enablesyou to reduce campaign waste, thereby providing you with better results fromyour marketing campaigns.

First-Party Data – A Crucial Component in Customer-Driven Marketing

First-party data plays an integral part of the data equation and is a crucial cornerstone for digital marketing. No other data helps you understand and build client relationships like first-party data. And, in the post GDPR era, the importance of first-party data has only increased all the more.


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