Back to Basics: What is First Party Data?

March 8, 2016

Updated on September 19, 2017

This is the first of our “Back to the Basics” series, where we will attempt to break down the jargon and demystify some of the many aspects of an effective data strategy. As anyone in the ad tech industry knows, there are as many acronyms and special terms as you can count. Our goal is to cut through the clutter and clarify what exactly all these words mean. Today we are focusing on First Party Data.

For anyone new to the data scene, first of all – Welcome to the Party! If there is one thing we love to talk about at Lotame, it’s data. After all, data is everywhere, and when activated properly, it can help businesses launch ROI-driven advertising campaigns.

However, what even is data? How do you collect data? And, more importantly, what can you actually do with data? Before we can answer any of these questions, we must first unpack the three different data types available to businesses, which are: 1st party data, 2nd party data, and 3rd party data.

Let’s discuss the first type of data: First Party Data.

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What is First Party Data?

So, to start with, what is first-party data? Simply put, 1st party data is YOUR audience data. This can include:

  • Behavioral data: Actions and interests users demonstrate on your website
  • Data you have in your CRM: Information users share with you
  • Subscription data: For anyone who has subscribers, such as newspapers or magazines
  • Social data: Data pulled people who interact with your brand on social media
  • Cross-platform data: Information gleaned from mobile web or apps

The data is from your users and customers. Because it is gathered directly from the source, first-party data is viewed as the highest quality with the highest value. If your business it not utilizing first-party data, this is a missed opportunity. First-party data should be priority in data analysis and helps businesses understand their target audience better, locate missed opportunities and create innovative personalized strategies to increase ROI.

Why Do You Want 1st Party Data?

Unlike other data types, first-party data is available to you at no cost and is also commonly viewed as the most valuable because of its quality. After all, this is information taken directly from or gathered about your actual users/customers.

Data analysis can help infer future patterns of consumer behavior. The users whose behavior will be most interesting to you are the ones who are already responding to your advertising or visiting your website and buying your goods and services. This is true for two reasons.

Past behavior is the best predictor of future behavior. Those who have purchased from you before or responded to your advertising campaigns in the past are more likely to do so again, which means they represent future sales.

The second reason is that the behavior of your existing users can give you critical information about the user profile of people who are likely to use your product, so you are much better equipped to strategize on how to target future potential customers.

What Information Does First Party Data Collection Provide?

First-party data is tailored to your business and provides direct insight into how your company is currently functioning. First-party data collection allows you to control how your own data is managed. First-party data is not limited to online data. Businesses can collect data from customer feedback, social interactions, email and newsletter registrations, and calls to the company contact center.

First-party data has an expected higher ROI compared to other forms of data collection because the data comes directly from the source, your business. Overall, first-party data is from your past and current consumers so you can make inferences and targeted strategies to reach future consumers.

Essentially, any information connected to who your users are  is available to you as 1st party data.

Who Benefits From First-Party Data Targeting?

So, who benefits from using first-party data? You, naturally, as an agency, advertiser, publisher or a company marketing a particular product or service. The entire reason you collect data is for this information. It’s the gold standard. Without this data, you are flying blind when it comes to your marketing strategy.

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If you do not know what your primary users/buyers are responding to, you have a better chance of losing them to your competition, who you can be sure are also collecting every piece of user data information they can get to pull those users away from you and add them to their own base of customers.

So How Do You Collect First-Party Data?

Collecting first party data online can be done by placing a pixel on your website, which captures information about your audience by tracking their behaviors on your website property. There are also a variety of analytics tools, such as a data management platform that will give you this information. You can then group these behaviors and other valuable data pieces into categories or audiences, and then mix and match your segments for targeted advertising campaigns or content personalization.

Easy enough, right? Well, this is really just the beginning, because data from your digital properties is only one piece of the puzzle. What about offline data? Or mobile data? First-party data goes beyond digital Web.

Brush up on the ad tech industry with our “Back to Basics” blog series which attempts to break down many aspects of an effective data strategy. You can find other helpful posts on the following topics:

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