Best Practices: Unlocking your First Party Data to Drive ROI

By |2018-11-19T20:03:49+00:00November 17th, 2018|

Data is clearly the future of advertising. Not only does it make ads hyper-targeted and relevant, but companies with data-driven advertising strategies are six times more likely to be profitable year over year.

When used correctly, data insights help you make the most of your budget. But even then, marketers need help showing ROI on their data efforts. That’s why it’s so critical to constantly innovate your data practices. As times change, the way brands use data also has to change.

Once upon a time, third party data was the bees knees. A company could easily target millions of consumers with their advertising and feel good about it. But after decades of sketchy third party data practices, both advertisers and consumers are wising up.

In a world where genuine connection reigns supreme, third party data is in decline. What’s an advertiser to do? The clear answer isn’t just better data in general, but specifically first party data.

Let’s take a look at the three types of data available to advertisers and marketers, and how they can make the most of this data to boost their bottom line.

The future of data is now
First, second, and third party data are just a click away for most advertisers. Although first party data is clearly the best choice, second and third party data may play a role in your data strategy.

First party data
First party data is information that you collect and own yourself. This includes data from behavior across your website or apps, such as subscription data or any data in your CRM.

First party is the highest value form of data to collect and manage. First party data is typically gathered through the use of cookies or analytics tools on your website, but it can also be collected when a user opts into a list or when they visit your site.

First party is the actual behavioral data from your consumers. There’s no better way to target new consumers based on how your current consumers interact with your brand. Use first party data to see past purchases and tailor ads to your consumers’ interests.

First party also data gives you specifics on your target market and existing consumers, which is perfect for retargeting campaigns. Website users are 70% more likely to convert when they view retargeted ads, so the investment is definitely worth the ease of returns.

Plus, first party data is entirely unique to your brand; no one else has access to this data, making it proprietary to your company. In a world where consumers crave connection and relevant experiences, first party data make dynamic and personalized ads a breeze for brands.

The major challenge of first party data is scale. It might be harder to find the quantity of consumers you need to see a return on your campaigns, at least in the early days of collecting first party data. That’s why supplementing your first party data with second party data can be so powerful.

Second party data
We don’t hear much about second party data, largely because it’s difficult for most brands to come by. Second party data is essentially someone else’s first party data.

Second party data isn’t usually purchased. Instead, second party data comes from a symbiotic relationship between two brands, or a brand and a platform, usually with complementary services. For example, a CPG company may want to swap data with a food magazine publisher. Since both companies have the same audience, it’s mutually beneficial for them to expand their audiences by exchanging data.

Another example of second party data would be targeting audiences on Facebook using their first party data like interest or demographic data.

Third party data
Third party data was once king of the data world. It’s what most people think of when we talk about buying data or harvesting cookie pools for targeting purposes, typically from large data aggregation companies.

Brands use third party data from aggregators for targeting. Although the quality of the data often leaves something to be desired, it was once a popular choice for advertisers. You could simply buy a list online and instantly have access to thousands of new consumers. It sounds like a marketer’s dream!

The bulk of third party data is nice, but as it turns out, the data quality isn’t great. It’s also data that your competitors can access, meaning that there’s relatively little competitive advantage to using third party data. Third party data can also carry a higher liability, since you don’t have direct consent from consumers to access the data.

The changing data landscape
There’s a time and place to use all three types of data. Although second and third party data might not be as reliable, they can be used to scale first party data lists, giving brands richer data.

However, it’s clear that first party is in, and third party is out. Third party data has fallen out of favor due to three factors: browsers are cracking down on third party data, Facebook also is limiting third party data use, and GDPR significantly constraints third party data. When implementing a data strategy for your company, you should always focus on first party data as the golden standard.

How to use first party data
Not sure how to put first party data to use for your brand? Here are a few of our favorite ways to implement first party data for greater ROI.

1. Personalize content and ads
Personalization is key for digital ads. First party data can help improve your click through rates and increase conversions with the power of personalization.

You can easily personalize content, like emails, to send targeted abandoned cart emails. Amazon does a great job of this: when a user leaves an item in their cart, Amazon triggers a reminder email to pull them back to the site.

Personalize your ads with the power of first party data. You can use first party data to track a person’s recent browsing behavior on your site, featuring only recently viewed products in your ads.

2. Content and audience insights
First party data means you no longer have to wonder what your consumers are doing on-site. Access your incredibly rich bank of first party data to glean insights on your content.

See what content is most effective for your audience. Are they clicking on links to your blog? Or your latest infographic? Use first party data to see where you should focus your content efforts, saving time and money.

3. Reach new audiences
Who says you have to stick with the consumers already on your list? You can use existing first party data to expand your reach.

Use True Anthem’s AI powered audience capabilities to find new consumers that closely fit your audience profile. This helps you place your ad in front of new eyes without relying on second or third party data alone.

The bottom line
First party data is the starting point to relevant, data-driven campaigns that get results. Advertising with this powerful data helps you get to the finish line first without the headaches. True Anthem uses our powerful technology to unlock first party data at scale and drive results. Want to learn more? Contact us to grow your business.

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