First-Party Data

What is first-party data?

First-party data is information directly collected from a company’s own source on consumers’ behaviors, actions, or interests, so it’s “owned” by a single source. This can include a brand’s customer database, website visits or actions on their website, and other points of engagement collected on customers. Because it is collected directly from a company’s specific audience, it is often the most valuable and relevant type of data. Additionally, companies know first-hand that the information is accurate and reliable. Due to the fact that it comes from established channels, it can often be collected for little or no additional cost. First-party data is also considered the safest when it comes to regulations and concerns about privacy and data use.

There are many types of first-party data, including:

• Purchasing behaviors
• Web activity (i.e., time spent on website, pages visited)
• Customer feedback
• Audience demographics
• Customer interests

How is first-party data collected?

Every time a consumer interacts with a brand, on or offline, a potential data point is created. Companies collect first-party data by tracking these customer interactions and data points and storing that information for later analysis. Often this can be done automatically through software connected to these various platforms. Some of the most important channels include:

Company Website – Implementing analytics on a website can automatically provide information about visitors such as time spent, pages visited, what products visitors viewed, and what products they purchased or considered purchasing.

Social Media – Social media collects data that can help you understand customers’ interests and reactions to marketing. This includes likes, comments, follows, and messages.

Email Marketing – Email marketing software keeps track of how customers interact with company emails. This includes open and click rates that help show what type of messages different customers are interested in.

Point of Sale – Whether in store or online the point of sale is the best place to track purchasing behavior. This includes data about product sales, customer spending, loyalty or membership status, and other sales data that can be linked directly to the customer.

How is first-party data used?

First-party data is a company’s most important tool for understanding their audience. This understanding is essential to retaining current customers and gaining new ones. First-party data can be used in a variety of ways, including:

Predicting Trends – First-party data allows companies to see what actions customers have taken and see the resulting outcomes. This will help predict what customers may do in the future. Companies can also see what types of marketing will be most successful and how customer preferences might change over time. 

Retargeting – First-party data, such as product page visits, email clicks, and website cart data, can reveal which products specific customers are interested in. This allows marketers to retarget those customers by exposing them to further marketing relating to those products. 

Attribution – Data from social media and company websites can show where new customers are coming from. Analyzing this data will help companies improve their marketing efforts and increase conversion rates.

Improving Processes – Gathering customer feedback helps companies improve aspects of their business practices, including marketing, product design, and customer service. Responding to customer feedback will improve customer loyalty and satisfaction.

Customer Journey – First-party data from the various stages of the marketing funnel will reveal the steps that customers take before deciding to purchase, and what aspects of their marketing were most effective at moving customers through these steps. This data will help companies improve and increase conversion rates at each step.

Challenges with first-party data

First-party data is a reliable resource for improving marketing efforts and fueling business growth. And while it has many advantages over other data types, even first-party data can have challenges. Some of the challenges that companies face in using first-party data are:

• First-party data comes from many different sources and each data point is unlikely to be useful on its own. Unlike other sources of data, first-party data must be consolidated and organized by the company collecting it in order to be useful for analysis.
• It is common to focus on obvious information gathered and not utilize all available first-party data. This leads to missed opportunities and insights. Collecting and considering data from all sources will lead to the most successful marketing strategies.
• First-party data can have a limited scope. While first-party data gives important insight into current customers, it doesn’t provide much information to help reach those who are not already aware of a brand or product.

Learn more about second and third-party data.