What is First-Party Data?

First-party data refers to any data that is collected directly from customers, audiences and potential customers. First-party data comes straight from the source and is reliable compared to other data sources with no room for construed data, making it an invaluable asset for any organization. Examples of first-party data across industry include; demographic data, website interactions and clicks, purchase history, email address, and user behaviour.

First-party data can be collected from a variety of mediums and these continue to evolve as new and compliant sources of data collection materialize. Today, companies collect first-party data from online stores, social media, surveys, customer reviews, apps, and loyalty programs. 

The Journey of First-Party Data in Industry

First-party data is something that has existed by definition since the beginning of industry itself. As soon as businesses started collecting information from customers they were predicting the future that was to come. Although it has a long history, first-party data wasn’t officially formalized until the digital era, when it was used in regulatory frameworks (Data Protection Regulation GDPR, DPA 1998) to add structure and legal policies around data collection and utilization.

From its humble beginnings, first-party data started as a term related to data regulations. Now, it is being strategically utilized in big tech, advertising, and social media. Companies leverage first-party data to gain a competitive edge and improve customer experiences. Today, there is rarely a business or governing body that has not heard of the term first-party data and invested resources into tapping into its potential.

First-Party Data Driven Customer Personalization 

A primary use case for first-party data is understanding in detail a customer's digital journey and user behaviour. Businesses can leverage these deep customer insights to drive personalized advertising and marketing. Organizations have been able to deploy this strategy effectively through the collection of data across multiple sources, websites, and loyalty programs. With first-party data, many retailers can paint a picture of their customers preferences and shopping behaviour leading to informed customer segments, selective promotions, and hyper-relevant ad surfacing.

Companies can implement first-party data strategies in parallel with advanced Mar-Tech and Ad-Tech solutions. Commerce Media Platforms offer capabilities to build audience cohorts, create targeted campaigns, and power dynamic and personalized ad creatives. The overall success of these Commerce Media Platforms is dependent on the product itself, as well as the quality and quantity of the data powering the personalization engines. Rich first-party data coupled with ranking, pacing, and targeting algorithms create a power-house in the marketing industry.

Building Trust in Commerce Media

In addition to enhanced personalization and a catered customer experience, first-party data also boasts significant advantages when it comes to data privacy and regulatory compliance. Privacy is a topic that carries a lot of weight in the advertising industry, with ever-evolving policy changes and impacts to consumers’ trust in brands. Data privacy should be at the forefront of every Chief Marketing Officer’s priorities. Modern consumers are aware of changing privacy regulations and paying attention to how their data is being used. 

By collecting first-party data directly from customers with their informed consent, organizations comply with the General Data Protection Regulation (GDPR). It is important to make sure that any personal data is kept safe and secure. The use of first-party data not only complies with existing regulations but future-proofs your data strategy, products and services for further iterations of these regulatory policies. 

Data privacy is crucial in both Ad-Tech and Mar-Tech where it is so heavily relied upon to power customer personalization. Privacy is also a focus due to the nature of these technologies handling sensitive information such as Personally Identifiable Information (PII) and Confidential Information. Ensuring this data is captured, stored, and transferred securely following regulatory policies is likely to become a huge focus in marketing functions. Many Commerce Media Platforms will have to pivot to mitigate the risks of data breaches when considering the storage and transfer of first-party data. 

Activating First-Party Data Strategies with Commerce Media

When developing your own first-party data strategy with your Commerce Media Platform, there are several important steps to maximize results.  

1. Privacy by Design: Consider privacy early on in the design and integration of your Commerce Media Platform by ensuring it is built with comprehensive privacy and security measures that extend beyond the platform to the greater system. Leverage first-party data to power your media platform and minimize the transfer of personal information as much as possible.
2. Data Analysis & Management: Ensure all first-party data is collected, analyzed and stored following secure best practices. Organize your Customer Data Platform (CDP) and implement the same data logic across your Commerce Media Platform. Consider a centralized data repository to minimize the movement of personal data.
3. Audience Segmentation: Leverage the organized first-party data to build segments of customer groups or cohorts based on specific attributes or implement machine learning models to identify lookalike customer segments. Connect audiences with your Commerce Media Platform to enable audience targeting across omnichannel advertising.
4. Personalized Media: Utilize the first-party data and audience segments to power targeted marketing and deliver a personalized experience that resonates with customers. React to changes in customer behaviour and recommend products and services based on data insights to drive engagement and hyper-relevant media.

The Road Ahead

First-party data has proven itself as a powerful strategy in the world of commerce media. As the advertising industry continues to trend towards GenAI powered solutions and hyper-personalization, first-party data will remain paramount to stay both relevant and competitive in this industry. Looking ahead, we expect data privacy regulations to only get stronger as consumers become more and more aware of their data rights and see first-party data as a step in the right direction to a secure and personalized industry.