A primer on first-party and third-party data
A primer on first-party and third-party data

By on in Analytics

A primer on first-party and third-party data

The foundations of modern digital marketing are built upon a mountain of data. Marketers use data to understand and segment customers, direct ad spend, and hone messaging.

This has been made possible, in part, by the wealth of third-party data available to brands. Even without your own data reserves, your brand can engage in targeted advertising tactics because of third-party data.

Until now, third-party data has been a democratizing force for brands entering a new market, founders beginning a new venture, or established companies that haven’t built out a robust digital infrastructure to capture first-party data.

However, it hasn’t always been great news for consumers, whose data gets passed around behind the scenes from entity to entity. This lack of control raises questions about privacy and safety in the digital world, and many governments are beginning to enact laws to protect individuals.

If you’re reading this, you’ve likely heard that the way marketers can collect and use data is changing. Here’s what you need to know, and a few steps to take today to prepare for the shift.


Start building up your reserves of first-party data. This can feel overwhelming if you’ve not consciously collected and organized first-party data before, but the good news is that you likely already have systems storing data somewhere.


First, a few definitions

Let’s start with an overview of the types of data you may use in your marketing today.

First-party data: This is data your business collects on your own customers. This could be contact information you gather when someone registers for your mailing list, or purchase history when someone buys from your e-commerce site.

Third-party data: This is data your business receives on consumers from an outside source. When you purchase a mailing list (which we don’t recommend, by the way), that’s third-party data.

First-party cookies: These cookies track the way customers on your site behave there. If your site can remember what’s in a user’s cart or their login information, that’s first-party cookies at work.

Third-party cookies: These cookies fuel targeted advertising online. Third-party cookies can follow consumers from site to site. If you have ads trail your website visitors across the internet, you’re using third-party cookies.


Things are changing with third-party data

Some consumers are concerned about how their personal information is collected and stored and who has access to it.

Some laws, like GDPR in Europe, are emerging to address these concerns. Meanwhile, brands are proactively addressing privacy concerns to remain in consumers’ good graces and stay ahead of the privacy laws that are surely coming in the US.

Many internet browsers are blocking the use of third-party cookies. Safari and Firefox already do it, and Google Chrome is set to phase them out by the end of 2023. With the vast majority of consumers using one of those three browsers (Chrome alone touts 2.65 billion regular users), targeted ads as we know them are essentially over.

Apple’s new Mail Privacy Protection (MPP) policy allows consumers to block email pixels that track open rates and hide their IP address so you can’t link their email with other online activity. Plus, Apple’s new App Privacy Report provides consumers with a breakdown of when apps have accessed their photos, microphone, and contacts, or provided access to third-party domains.


Time to lean into first-party data

With the downfall of third-party cookies now imminent and the general shift in opinion regarding all third-party data collection and usage, it’s time to reconsider your data strategy.
Start building up your reserves of first-party data. This can feel overwhelming if you’ve not consciously collected and organized first-party data before, but the good news is that you likely already have systems storing data somewhere.

Your mailing list is a great example. There’s a wealth of information in your email marketing service. If you haven’t been consciously maintaining it, though, it could be messy.

Start small. Begin scanning through your lists and correcting for known errors–typos, missing first or last names, or company information. Then, consider exploring segmentation to create distinct audiences from your first-party data. Once you’ve cleaned up your list of contacts, stay on top of tidying up any new additions, so your data set is always clean and relevant.


Gather data whenever you can

There are countless opportunities to gather first-party data from prospects and customers. First-party cookies are still allowed, and while we may see greater regulation here soon, they’re still a viable part of your marketing strategy.

Newsletter signups and demo registrations are two other solid ways to collect data directly from your audience.

If you maintain an e-commerce site, you have access to purchase history, shipping address, and more for your existing customers.

When you attend industry events, collect contact information for the folks you meet. QR codes that direct people to register for your email newsletter are a great way to seamlessly turn your in-person engagements into valuable first-party data.


Remember to get consent

Perhaps the most important part of collecting first-party data these days is making sure customers are giving explicit consent for you to gather it.

Europe is outpacing the US currently with data privacy laws. Still, states are beginning to enact their own laws, and it is likely only a matter of time before we see federal legislation.

Clear communication about how you’re collecting data and what you plan to do with it will become a baseline requirement–better to start enforcing those rules with yourself now.


Return to pre-digital techniques

Many marketers are distressed by the idea of losing third-party cookies and the ad targeting powers they enabled. However, let’s not forget that there are other ways to find our audiences.

Go old-school. Use common sense to find your people. If you sell surfboards, target your ads at folks in coastal states. If you’re a lawyer specializing in IP law, advertise in a biotech-focused publication. Start a podcast where you talk about your industry, and invite prospects to join you as a guest.

While building up a well of first-party data is ideal, you’re not knocked out of the marketing game if you don’t have a way to collect, clean, and house that data right now.

Do the best you can with what you have, and start working toward amassing first-party data. And if navigating this shift feels overwhelming, reach out to a marketing agency for help.