First party data & Cookies – everything you need to know

First party data, cookies and privacy policy are topics that are on all marketers’ lips right now. Why? Well, because the marketing landscape continues to develop at a furious pace and the rules regarding, above all, customer data and personal data becomes even more strict. This is why there is so much talk about first party data:

  1. The lifespan of the third-party cookie becomes smaller and smaller and will disappear completely in the near future
  2. You see increased demands on purchases and user experiences where consumers want a personal experience, regardless of which channel they interact with
  3. Changes in legislation and new laws within the GDPR and Schrems require that we must have better control of our data, regardless of first, second or third party. We must be able to collect the data we have and report it in a transparent way
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What is first party data?

First party data is the data that is retrieved directly by your company through your owned platforms, for example via opt-in on your website. The data is collected with the customer’s consent and you currently own the data as you can both verify and clear it. First-party data can also be data from Google Analytics or your contact lists with email addresses and numbers.

The most common sources of first-party data are scripts on the website, so called cookies but also forms for sign up or newsletters, for example. With the help of different types of sources, we can connect our data and quickly create a 360 degree experience for the customer based on its behavior and preferences.

What are cookies and what does a cookie do?

A cookie or cookie file is a text that is stored in your browser’s memory to collect information about your behavior online. When the browser needs to find out important information about you, such as your preferences, it uses the cookie to retrieve this information.

Advertisers began using cookies as a way to track consumers and provide more personalized content. Today, however, cookies can be scary because consumers are becoming increasingly worried about how much of their private information is publicly available. It’s with this that the rules regarding the collection of personal data are further tightened.

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What is the difference between first, second and third party data?

Second party data is collected by another company that either shares or sells the data to other systems. This can be, for example, from an email, a supplier, via a loyalty program or card / credit data. Second party data cannot be guaranteed that it has been collected with the customer’s consent, as you are not in control of it.

Third-party data is usually collected by a data collection company and resold to advertisers for various purposes. This data can rarely be verified.

Why first party data and zero party data are so important

What is important to keep in mind when collecting first-party data is to have consent in everything you do and be transparent with the user about what to do with the data. The absolute best and most important thing about first-party data is that it gives us full control over the data and then we can easily be transparent and report to users what we know about them.

By being so, the customer will gain more trust in your brand and over time give away even more important data. There, zero party data also enters the picture, which is first party data, but where the customer itself expresses wishes, preferences and tailors his experience. For example, the customer chooses the interest category and filter on your website.

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Google and Apple's response to the changes

The digital marketing landscape is constantly evolving and we have no choice as marketers but to adapt, which is not always easy. There will always be short-term solutions on how to get around the new rules and “fool” systems, but it’s not sustainable in the long run.

Apple's stance on privacy issues

In the past, Apple was able to track and share your data between other apps and websites and provide advertisers with data that they can use to show consumers relevant ads based on their web history. But with the iOS 14.5 update, which affects all Apple devices (and over a billion people globally), apps now have to ask to collect and share your data, and consumers can opt out at any time. If only a small percentage of the population opted out of tracking, this would not be such a big deal. But now that the choice is there, only 15 percent of the world’s iOS users have chosen to be tracked.

Google's plans to phase out the cookie

Cookies are the tracking codes that are found on various websites and follow users around the internet and third-party cookies are planned by Google to phase out in 2023. Instead of 3PC as it’s called, Google will try another technology called Federated Learning of Cohorts (FLoC), which tracks groups of people based on their common interests, instead of tracking individuals’ online behaviors.

FLoCs can certainly alleviate the burden of cookies disappearing altogether, but it certainly doesn’t replace 3PC. Marketers will now instead need to understand how to best target these groups of users – as opposed to targeting individuals.

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How e-mail overcomes the challenges of first party data

As said, there are many ways to collect first-party data, but email is the way of marketing that is closest to a personal dialogue with the customer. Any marketer can display an ad that targets a specific audience. But the efficiency of that data set and the ability to customize content based on it, will never be as powerful as the data collected through email.

This is because almost all data points we collect through e-mail or forms are self-reported where the subscriber itself tells us how they want us to market ourselves. Our task is then to capture that information and use it in our marketing.

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Benefits of first party data

People who are good at managing their first party data look at the entire customer journey and not a single channel. They follow how customers move between different channels, on the website, in apps, in social media, etc. Those who work throughout the customer journey have cracked the code on what to do with the data you already have and how to best use it in your marketing.

If you work correctly with first-party data, you can:

  • Create personalized experiences
  • Anti churn
  • Build loyalty
  • Create long-term customer relationships

Common misunderstandings about first-party data

Many marketers believe that first party data is only about their own sources like the website and digital channels and takes from a purely web channel perspective. Many people don’t think about the other sources of data that are available, for example in CRM systems, loyalty systems and backends. There you can find incredibly important and relevant data that the customer has also given consent to share.

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The use of first party data

Traditionally, marketers use first party data in various promotions, loyal retargeting campaigns, loyalty systems, personalization on the website and in their communication. Now with stricter rules, it becomes even more interesting to see how you can collect and connect your first party data from different sources, for example from your web, CRM, customer service and then build a complete customer profile.

Upcoming trends: Find target groups with similar behaviors

More and more marketers will start using the method of marketing to groups instead of individuals. If you analyze on-site behaviors to understand which parts of your site are most appealing to users and understand what behaviors make them a high-value user, you can then use those insights to find similar people. The method is completely based on customer behavior and on what people have chosen to give you for information, which makes it one of the strongest strategies that come out of these changes.

Tips on handling first party data

It’s important that you lay the right foundation for the work of managing your data, so you have something to start from. Set up a clear plan and strategy for how you will collect, manage and work with your first party data. Feel free to use a checklist. Define your use case, what do you want to achieve with the data you receive from, for example, your web site or in your CRM? Then connect it to clear goals. Start by understanding and determining the requirements before you start with the technical.

When it comes to the actual handling of the data, there are several solutions. For example, if you have important data in your CRM system and other data in your app, you usually want to collect that data in one and the same system to be able to create target groups and synchronize activities and communication. There are many good tools available for this, almost all Marketing Automation systems have the opportunity to meet these requirements, including Rules platform.

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The customer always comes first

What is important to remember is that these changes help us stay focused on the customer always coming first and ensure that you create relevant experiences that people actually want to get involved in. In the end, this also makes your brand one as new customers will be trusted in and as customers come back time after time.

While this transition may require you to change your mindset and may result in many trials and tribulations, these data integrity changes will enable you to put your customers at the forefront of your marketing strategy – which is really what we should be doing. The customer always comes first.

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