Why 1st Party Data Is A Must For Any Marketing Strategy
Data marketing has become the new norm and 1st party data is a must for any marketing strategy.
Most e-commerce companies advertise with data from a very few platforms.
The most common are Google and Facebook. This might sound well enough, but it can quickly go very wrong. Having your entire marketing strategy rely on a few platforms is very risky. Especially when you are using third-party data instead of the much more secure first-party data for your e-commerce marketing.
3 main differences between 1st party data and 3rd party data.
The first main difference between the two data types is ownership. 1st party data is owned directly by the company, while 3rd party data is owned by, as the name suggests a third party. This could be data from Facebook or Google. Having ownership over your data is a powerful thing because your company faces a much smaller risk of being affected by data laws (GDPR) and regulations.
Secondly, sourcing the data directly from your company, makes it a lot more accurate. This makes sense because all the data comes directly from your customers, instead of data from a pool of people, who might have no interaction with your company. More accurate data leads to better marketing efforts, which cuts costs and ups the ROAS (Return on ad spend).
This will also give you insight into your customers, because your able to split them into different segments that are extremely specific. It is then much easier to create personalized content for these different customer segments, which in turn leads to more engagement.
The third big difference is that first party data collection is much easier to use because it’s centralized. A CDP collects all the data and consolidates the first party data for you. This makes it simpler for any marketer to use, as the person doesn’t need to jump around multiple different tools and software programs. This means less time on all the boring stuff and more time to execute your marketing strategy!
1st party data vs 3rd party data, what’s better?
You might be asking yourself, how does having first party data marketing over third party data affect MY company?
We have set up some examples, to show you:
“A new update to IOS just landed, severely restricting how companies such as Facebook can collect data”
- First-party data: You own the data, so you are not reliant on Facebook or any other major tech company.
- Third-party data: You’re in trouble. The third-party data will be heavily impacted by such restrictions, which will make your marketing efforts a lot worse. This is because most companies source their data from Facebook and Google. This kind of update that regulates data tracking severely restricts these companies’ data collecting.
“Your CEO asks the marketing department to get the most quality segments, for a new ad campaign”
- First-party data: Your data is sourced directly from the company’s customers, which makes it the most precise data possible. The segments created are incredibly accurate.
- Third-party data: The data is sourced from a third-party, making it inaccurate, which in turn creates mediocre segments.
“A concerned customer wants to know more about how their data is being used”
- First-party data: Because the data is sourced directly from your company, you know the complete journey of the data and can therefore explain any privacy concern to the customer.
- Third-party data: The data is owned by another company, which means you don’t know the full data journey. You can therefore not explain the data journey, possibly losing your concerned customer.
How can a Customer Data Platform help with 1st party data and marketing?
A Customer Data Platform collects and analyzes all your data in real-time. When you integrate into Custimy, the software automatically pulls data from the last 24 months. The software then creates segments for you, showing you the most valuable customers and most valuable products. All this is first-party data, readily available in the Customer Data Platform. To make it even easier, the first-party data can then be activated in-app, directly to Facebook.
A Customer Data Platform is therefore a cheap, easy, and great way for your webshop to get access to first-party data. Because the data is harvested from multiple data sources and every irrelevant data point is filtered, you’re left with the best possible aggregated data. Don’t believe us? E-commerce company Moodings made 60 ROAS on Black Friday using Custimy.
The first-party data that you now possess, is also great to create incredibly precise and powerful lookalike audiences. Feeding Facebook with better data leads to better lookalike audiences, and the data from a CDP is the best possible. This makes it so, you can get one of the best ways to acquire new customers, simply by using a CDP. No more guessing in Facebook’s ad creator about personality traits.
Marketing has for the longest time been throwing stuff at the wall and seeing what sticks. This Spray-and-Pray mindset is not only ineffective, but it can also negatively affect potential customers, by reaching out to them in the wrong way. CDP data-driven marketing is not only cheaper in the long run, but it is also much more effective.
How a CDP and better data strengthens Customer acquisition and Retention strategy.
A CDP and a first party data strategy together will strengthen your all-around marketing strategy. Customer acquisition gets a lot easier when you already have existing data on your customers. Lookalike audiences and knowing the behavioral tendencies of your customers will make you be able to reach new customers and stand out in the competitive online retail market.
Knowing data such as CLV (Customer lifetime value) will also help you understand how many customers you need to run a profitable business. A CDP also calculates your business’ CLV automatically without you needing a clv calculation formula.
As with acquiring customers, retaining them also becomes much easier through a CDP with first party data marketing. Knowing what actually drives your customers to purchase, will make it so your business can keep pushing these buttons.
You can keep personalizing and providing your customers with the best possible offers and services. This will not only retain them for another buy but will help create loyal customers. In addition to this, the customers who are now loyal are also the most valuable.
As a business with a CDP, your customer journey becomes much more accessible. You can connect with your customers at the exact touchpoint you want. You also have more knowledge about how your customer acts in different places in the customer journey. This makes it so you can tailor your content to that exact point in their journey.
iOS 14 and how to take control of your data.
Apple’s updates’ iOS 14 and iOS 14.5 have both affected the way data is being handled. Now Apple might be the first, but they are sure not the last big company to limit data access for applications and websites.
In short, the iOS 14 and iOS 14.5 updates have severely impacted the way companies such as Facebook can get access to data. They have done this by changing the privacy settings for every iOS user.
The App Tracking Transparency (ATT) does so users have to first allow their data to be tracked across websites and applications. 80% of iOS users choose to opt-out of this feature and therefore a lot of data is lost.
Facebook, Google, and other major tech companies now have a major data loss, which affects businesses that uses these platforms. Especially smaller businesses that heavily rely on third party data, from the major tech companies. This is another reason, why first party data is essential to help shield your business from outside forces.
If iOS 14 and iOS 14.5 show you anything, it is data and privacy are only becoming more and more regulated. So if you’re a smaller business that relies on third party data, the only option is to quickly take control of your own data by getting a CDP.
Take your business to the next level by using Custimy.
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