Digital Marketing Battle Being Won with First Party Data (Study)

Use of first-party data is on the rise among top-earning companies, according to a new survey by Econsultancy.

To conduct the survey, Econsultancy consulted 302 marketers from companies with at least $100 million in revenue. According to the study, 81 percent of respondents with strong ROI used first-party data, or data collected by the company, and 49 percent said that they were looking to increase their use of first-party data in the near future.econsultancy-data-story-one

The results of the study come as no surprise to Marko Muellner, digital vice president and group director for Edelman Portland. “I’m not surprised there’s a trend away from third-party data and toward alternatives,” Muellner says. “Third-party data is important, but it’s become omnipresent, available to all, and costly at scale, especially for advertisers.”econsultancy-data-story-two

And while marketers have traditionally had to rely on third-party data purchased from outside vendors for customer insights, that data could now be keeping campaigns from personalization, says Kathy Menis, vice president of product marketing for Signal, the cross-channel marketing company behind the study.

“The big takeaway here is that first-party data is really how the battle is being won for customer engagement. There are some really interesting trends that are going on and it validates the fact that even though the industry was built on third-party data, clearly first-party data has accelerated to the top of strategic priorities.”

In fact, 66 percent of marketers who saw a strong ROI on first-party data investment said that their strongest data capability was “campaign targeting and analysis,” which makes sense because first party data allows for much better targeting, says Menis.

“First-party data is a direct interaction between the consumer and the brand,” she says. “These are the signals and cues that are telling the marketer what the consumer is interested in, what they’re shopping for, what they’re searching for. It’s relevant and it’s in real time, and it gives you the ability to personalize an experience because it’s actual behavior.”


However, the rise of first party data isn’t without its challenges. For example, 47 percent of top marketers say that finding high quality data remains a challenge. A further 37 percent say that the availability of data remains a top concern. According to Muellner, getting high quality first-party data will become even more challenging as the Internet of Things (IoT) becomes a reality.

“First-party data strategies are about to get exponentially more complex and risky,” Muellner says. “With the rise of connected devices and IoT, consumers and the products they buy are all capturing real-time streams of immensely valuable data. Getting customers to visit your website or fill in a form is nothing compared to getting them to share their fitness monitor or car data streams. Not only is the value of first-party data about to skyrocket, so is the challenge of capturing, securing, analyzing and activating it.”econsultancy-data-story-four

Challenges around getting first-party data could be the reason that 30 percent of top earning respondents indicated that they would also be relying on second-party data, or data purchased directly from the publisher, in the future. But while second-party data seems awfully appealing, with all of the personalization but none of the collection effort, it might not be off-putting to consumers. Just because a consumer opts-in to hear from one brand doesn’t necessarily mean they want to hear from others.

And while the benefits of decreasing reliance on third-party data are clear, switching to more direct data sources requires a lot of restructuring on a brands’ part.

“A true first-party data strategy requires an shift in your marketing itself,” Muellner says. “A growing slice of your dollars and resources need to be focused on driving engagement with owned properties and in developing compelling value exchanges that compel consumers to share their data streams. This is very different than what most marketers are doing today, and requires a new set of expertise, tools and KPIs. In the future, we’ll all be data companies and for those savvy enough to do it well, there’s mountains of money to be made.”

View the full study here

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