Marketers have long invested millions of dollars in third-party data that would enable them to improve their targeting strategies. While this strategy has proven to be successful at prospecting new customers and acquiring market share, marketers will soon have to optimize their strategies for a 1st-party-data ecosystem.
First-party data is directly collected from customers and complements the wide array of data that marketers and advertisers utilize on a daily basis. It has the potential to improve processes and avoid data redundancies. The information that a company collects about its customers is sorted into a database that the company owns and used to improve ad targeting, create relevant content, and develop an exceptional customer experience. To make it simpler, a company could leverage mobile app consumer behavior, website interactions (clicks, heat maps, purchase history), or recurring purchase history to target an individual customer.
Marketing will look completely different with first-party data being the North Star of a strategy, however, it will also mean that marketers have to become more innovative and creative in their thinking.
Marketers know that it costs less to retain loyal customers than to acquire new ones. In fact, repeat customers have been estimated to spend 67% more money than new customers, accounting for 50% of annual revenue. If we follow the maths, it makes sense that marketers build upon first-party data to maximize customer engagement rather than focus solely on acquisition.
Third-party data does not paint the whole picture that describes a customer’s affinity with a brand and eventually their path towards making a purchase. It is capable of scaling things en masse, however, it lacks the quality, accuracy, and recency that comes with first-party data which is collected in real-time and is completely free.
Brand love and loyalty require a hyper-personalized experience that is capable of understanding and anticipating the customer’s needs with one-on-one contextual relevance (delivering the right message at the right time and place within the buying journey). To fill the cookie-shaped gap, marketers are relying on conversational intelligence platforms such as Talkwalker to integrate all their data sources (online and offline) to engage existing customers wherever they may be in their buying journey.
Why utilize first-party data?
Consumers interact with brands in a multitude of ways and on different platforms, both offline and online. The digital landscape continues to evolve and offers marketers endless opportunities to better understand their customers to create experiences that drive them to keep coming back. For example, first-party data comes from a trusted source that a company owns and runs like your website, mobile app, email marketing, offline Point-of-Sales, surveys, call centers, subscriptions, and even chatbots.
However, what’s more important is the ability to create a seamless and frictionless customer journey that improves overall marketing performance:
Reduce ad spend waste: With users becoming more aware of their digital footprint, marketers are prioritizing first-party data to identify and target customers across devices and platforms. This process would maximize the ROI on ad spend and create a better relationship with consumers.
Improved mapping: By incorporating first-party data from multiple sources into their strategy, marketers are in a better position to map the customer journey and to understand the psychology behind every decision during each touchpoint.
Goal-driven audience segmentation: Lastly, the flexibility and reliability offered by first-party data allow marketers to measure their efforts across all channels, and therefore segment audiences based on behaviors that would ultimately lead to increased conversions or retention.