Why brands are focusing on first and second-party data Share via

The demise of 3^rd party cookie tracking is just around the corner, a customer tracking method that has been the mainstay for the digital advertising and marketing industry for many years now. The few things that made third-party tracking so popular among the marketers include its ability to track the website visitors efficiently, collect high-quality user data, and help the marketers effectively target the right audience with highly personalized ads.

So what’s happening with the third-party cookie tracking method? Technology giant Google has announced that it will phase out third-party cookies in the Chrome browser by 2023, delaying it by a year from the earlier announced timeline of 2022. In addition, Apple’s privacy changes to its IDFA earlier last year, where every app has to ask users for their consent to share their data with the third party, have also put the marketers in a precarious position.

In addition, the European Union’s General Data Protection Regulation (GDPR) has sparked a bevy of countries to introduce some degree of data privacy legislation to protect online users’ interests. United Nations Conference on Trade and Development (UNCTAD) said that 128 out of 194 countries had legislation to secure data and privacy protection Gartner says that by 2023, 65% of the world’s population will have their personal information covered under new-age privacy regulations, up from 10% at the beginning of 2020.

Now, looking at the current scenario and all the scrutiny around data privacy laws, brands across the globe who used to rely primarily on third-party cookie tracking to develop their customer outreach plans have had to start focusing on strengthening their first-party data and start collaborating with organizations to amass meaningful second-party data.

Although most consumer-facing companies sit on a humongous amount of first-party data, they were clueless about using those effectively to target their audience until recently. The reason is that most of those data are siloed away in places like the company’s CRM or in website analytics.  As a result, only a tiny fraction of available data was ever used. But with the reliance on first-party data going to increase manifold in the coming time, companies are preparing to dig in deep into their data points and start making full use of the available resources. In addition, brands have started religiously looking into the data from their CRMs which keep track of the entire customer journey, which was not the case earlier. Hence, with third-party cookie tracking getting off the table, the role of CRMs for brands has become crucial, one that marketers across the globe have realized.

First-party data comes with tons of benefits for brands and marketers. The most important advantage of this data in today’s scenario is that first-party data helps organizations to be compliant with international data protection laws, as they have complete control and transparency over what happens with the collected data. Moreover, this data is way more accurate and cheaper than buying third-party data, giving brands better visibility into their customer’s shopping behavior.

On the other hand, to improve the efficacy of their first-party data, many brand marketers have suggested that much focus will also go into strengthening their second-party data before the ban on third-party cookies kicks in. Companies usually acquire second-party data by getting into a partnership with another non-competitive business whose customer base complements each other. They are also available in the open market, and many organizations see them as a source of additional revenue.

If we look at the benefits of the second-party data, which led to renewed interest from marketers, it is very accurate and reliable and can help organizations to reach out to newer potential audiences. In addition, this data is collected from the businesses you trust, and the data acquired is your partner’s first-party data. So there is a significantly high level of data transparency and authenticity, just like the first-party data. Moreover, the most significant limitation brands face with the first-party data is its limited scale and scope. However, if businesses want to expand into different markets or acquire a newer set of customers, second-party data can significantly help. And collaborating with other organizations for second-party data is still less expensive than buying third-party data. Additionally, this data can also help marketers get more control over the consumer data, which will become non-negotiable shortly. Thus, off-late brands are also investing time and resources to beef up their second-party data.

The rapidly changing marketing and advertising landscape have made the brands quickly transition from the old ways of targeting the consumers to the one where their privacy is more protected. The whole evolving situation has made brand marketers get their first and second-party data in order so that they are well prepared and better equipped to be compliant with all the data privacy laws.