3 reasons using first-party data can regain your customers’ trust 

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Marketing has seen significant changes over the last decade. Most recently, the demise of third-party cookies has pushed marketers across industries to rethink their strategies and what to do once cookies are finally gone. But before we get into that, it’s important to understand how we even got here.

Third-party cookies were introduced as a way for marketers to track what they believed customers wanted across different platforms. If a customer was searching for an item on one website, ads for that item would show up on every other site they visited. While it initially may have been a good way to better understand consumer behavior, it actually pushed customers to lose trust in the brands they loved while also making it more challenging for brands to get a true sense of what their customers actually wanted. 

As a result, many brands started shifting to alternative methods of communicating when they realized that they were losing loyal customers and audiences. They began engaging with influencers and affiliate programs because those offered a more “authentic” relationship. However, such programs require significant investments in time to get them up and running and high recurring costs to maximize reach. This approach has caused many marketers to overlook one of the most untapped resources they have access to: first-party data. 

First-party data is the data collected from within a customer’s ecosystem. Gathered through email, social media followers, app usage and website traffic (among others), this data is generally what customers are already opting into providing. As marketers and brands continue to search for alternative methods of personalizing customer experiences while also retaining engagement, first-party data is the key that many are missing.

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In 2021, research found that 71% of consumers expect companies to deliver personalized interactions. And 76% get frustrated when this doesn’t happen. Additionally, the same research found that companies that grow faster drive 40% more of their revenue from personalization than their slower-growing counterparts. Because COVID-19 shifted almost all of the ways marketers interact with customers, first-party data has the capacity to create the personalized experiences that matter most. 

First-party data takes personalization to a new level

With the increased need for personalization, we have to consider that third-party data is just pulled from the cookies following you around on the internet. It’s not actually tracking the items you are buying in the same way first-party data is. First-party data is the actual information from your devices, structured to fit what you are looking for.

For example, say you are going on a trip and looking for the best suitcase to buy. While doing your own research, you find that the Away suitcase is the best one to use for where you are going. With that, you also book a trip to Italy. All of the confirmations are in your email, so now you receive recommendations for sightseeing in Italy, local restaurants and cars you can rent. That is the power of first-party data: Taking advantage of the information you already provided to make smart recommendations regarding what you’re doing and what to purchase for it.

Meanwhile, in the same scenario, in searching for the best suitcase to use for your trip you click on different options, deciding not to buy the Samsonite suitcase because it doesn’t give you what you are looking for. Yet every website you go to, regardless of whether it’s relevant to travel, shows you ads for the Samsonite suitcase you aren’t planning to buy.

Which one of these provides is more personalized? Not only does first-party data offer that kind of experience, but it’s significantly less annoying to you as you search. 

Look no further for reliability

We’ve seen for years that pervasive communication channels like email newsletters are unreliable as an input to marketing spend and performance. Yet we continue to see an influx of newsletters every day. The average open rate for email is 20.81%. But we have already seen that personalization helps increase ROI. Without personalization, email newsletters become just as unreliable for your brand. 

Using first-party data means using inherently better and more efficient resources. As such, there is an opportunity for better reliability while also achieving personalized recommendations. With both personalization and reliability, because first-party data and access to actual purchases and usage are so available, marketers are able to be clearer and more concise in their messaging, value propositions and competitive differentiation.

With marketing budgets always shifting, first-party data informs easier strategy and budget allocation 

There are various challenges when tying outputs from multiple ad spends within social and digital interactions to inform future strategy and budget allocation. These challenges include understanding conversion rates across various channels and identifying the most effective messaging and content that drive engagement, clicks and additional actions. In the last few years and among nearly 400 marketing leaders, marketing budgets have fallen from 11% of company revenue in 2020 to just 6.4% in 2021. 

As previously mentioned, first-party data helps with reliability and personalization because of expanded resources. But more than that, first-party data helps marketing teams be more agile with their budgets. 

We know that first-party data helps brands and marketers prioritize personalization, reliability and more strategic budget allocation, and yet many are still not jumping on the treasure trove of data available to them. It’s no surprise that at some point third-party data will disappear. Google can push it out as many times as they want, but at some point we will all need to embrace something more sustainable. Now that we know what kinds of benefits first-party data provides, marketers need to hop on board to not miss this massive market opportunity. 

Jyothi Swaroop is CMO of Nylas

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