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First-party data

Mar 23, 2023

What is First-party Data?

First-party data is behavioral information that a company collects directly from its customers and/or prospective customers. This data is typically collected through interactions with a company's website, social media accounts, email campaigns, or mobile apps. 

Examples of first-party data include:

  • Customer demographic information (e.g., age, gender, location, job title, company size)
  • Purchase history
  • Website behavior (e.g., pages visited, time spent on site, clickstream data)
  • Email engagement (e.g., opens, clicks, forwards)
  • Social media activity (e.g., likes, shares, comments)

In light of changes to third-party cookies, first-party data is one of the most valuable types of data available to businesses. 

How Do Companies Use First-party Data?

Companies use first-party data to gain a deeper understanding of their website visitors and their behavior. By analyzing this data, businesses can identify trends, preferences, and pain points that can inform their marketing, product development, and customer service strategies.

Here are a few ways that companies use first-party data:

  • Personalization. First-party data helps businesses create personalized experiences for their customers. By understanding a customer's purchase history, website behavior, and preferences, businesses can tailor their messaging, promotions, and recommendations to each individual.
  • Retargeting. First-party data enables businesses to retarget customers who have already engaged with their brand. For example, a customer who abandoned their shopping cart on a website can be retargeted with a personalized email or ad featuring the items they left behind.
  • Customer segmentation. By analyzing first-party data, businesses can segment their customers into different groups based on their behavior, preferences, and demographics. This allows them to create targeted campaigns and messaging that resonate with each group.
  • Product development. First-party data can inform product development by providing insights into what customers want and need. For example, a company may analyze customer behavior to identify common pain points that can be addressed through new product features.

What Are the Privacy-Related Issues with First-party Data?

As with any type of data collection, there are privacy-related issues to consider with first-party data. Businesses must be transparent about their data collection practices and obtain consent from their customers before collecting their data. They must also ensure that the data is secure and protected from unauthorized access.

Another issue to consider is the potential for bias in first-party data. If a company's customer base is not diverse, its first-party data may not accurately represent the broader population. This can lead to creating marketing campaigns that only appeal to a specific subset of consumers, thus limiting a brand’s ability to attract new kinds of buyers. In other words, when leveraging first-party data, brands should be cognizant of the limitations of the data set.

How Does First-party Data Differ from Third-party Data?

Third-party data is data that is collected by a third party and sold to businesses for marketing purposes. This data is often aggregated from various sources, such as cookies, social media platforms, and data brokers. Unlike first-party data, third-party data is not collected directly from a company's customers and prospective customers.

One of the key differences between first-party and third-party data is ownership. First-party data is owned by the company that collects it, while third-party data is owned by the data provider. This means that businesses have more control over their first-party data and can use it for a wider range of purposes.

Another difference is the quality of the data. First-party data is typically more accurate and reliable than third-party data, as it is collected directly from the source. Third-party data is often incomplete or outdated, as it may be collected from multiple sources and combined into a single dataset.

How Does First-party Data Differ from Zero-party Data?

Zero-party data is customer data that is intentionally and proactively shared with a company by the customer or prospective customer. This could include preferences, interests, and other personal information that a consumer willingly provides to a company in exchange for a more personalized experience.

The main difference between zero-party data and first-party data is the source of the data. Zero-party data comes directly from the customer, while first-party data is collected by the company from its interactions with customers. Zero-party data is valuable because it provides insights into a customer's interests and preferences beyond what can be inferred from their behavior alone. It can also help companies establish a more direct relationship with their customers, as customers are willingly sharing information with the company. First-party data is considered valuable because it is the most accurate and trustworthy, but it is limited to the interactions that customers have with the company.

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