What is first-party data? First-party data (often referred to as “1p data”) is the information that a company collects from its consumers. It is owned by the company that collected it, and it contains important information about its customers. This information (typically referred to as “data”), which is compiled through sophisticated software, can be used to create customized ads that will increase the chances of converting a visit into a sale. And because first-party data is collected by the company itself, the chances of accuracy and reliability are greater than they are with other types of data, which are explained below.
First-party data differs from both second-party data and third-party data. Second-party data is data from another company (in most instances, a partner company) that is acquired in a way that benefits both companies. In short, your second-party data is another company’s first-party data. Third-party data is a different thing altogether. It involves an outside source that has collected the data. For example, if Company A bought a mailing list for a marketing campaign from a list broker, then the data from the purchased list would be considered third-party data. In most instances, first-party data is the most powerful (and accurate) type of data that a company can use regarding its customers.
How Is First-Party Data Collected?
There are many methods used to collect first-party data, most of which include online sources, but there are some ways to capture the data offline as well. These include the following.
Online interactions: This is the most common (and accurate) way it’s acquired. Using website tags (an extremely common method), you can track how customers interact with your brand online. It uses views, clicks, comments and purchases, among other online behavior. Here, you can track who is visiting your site, where (and how often) they’re clicking links, and how they’re navigating through your site (and what webpage they’re exiting to).
- Social media: Similar to the above method, you can just as easily collect information on those who follow and/or interact with you online via social media. Client clicks, comments, likes and shares all will have you get a grasp on who your audience is. And it’s not only on your page; you can also see what other pages these customers like and follow.
- Subscriptions: If customers subscribe to content or products from your company, it’s clear that they’re familiar with your brand, and so you’ll instantly gain insight into their habits. Analyzing this segment will allow you to gain insight into the customers who are interested in your company and/or content.
- In-store and survey data: The wall between brick-and-mortar and online stores has diminished considerably, and now the two are closer together than ever. Being able to merge this in-store data with the eCommerce data you’ve gleaned is now commonplace and gives you a more complete understanding of your customer’s purchasing behavior. Similarly, survey data and customer feedback data, which can consist of both online and offline feedback, can also be integrated into the data collected online.
How Is First-Party Data Used?
The simple answer is that first-party data is used by the company to know its customers better. The more data a company knows about its customers, the better and more effectively it can market to these customers. By being able to segment these customers into groups, any marketing efforts toward these customers can be more personalized and targeted, which greatly increases the percentage of conversion. First-party data is used to do the following:
- Gain insights: This helps you to understand your audience and allows you to tailor your content to their preferences.
- Predict behavior: Having the ability to predict behavior allows you to send customers focused marketing campaigns.
- Personalize content and campaigns: This gives you the ability to make any content and marketing relevant to your audience.
- Retarget audience: Retargeting is delivering ads and content to users who visited your site but didn’t convert to become customers.
- Convert new customers: Sophisticated software allows you to find new potential customers by targeting users with similar preferences to your current, successful customers.
The Security Risks Surrounding First-Party Data
There are risks and challenges surrounding all types of data, and first-party data is certainly no exception. First-party data falls under the umbrella of both business-critical data and private information, and enabling protection of some sort is mandatory. Data security is based on three principles, which are the following:
One of the tools that meet all these qualifications is a virtual data room, commonly known as a VDR. A VDR is an extremely secure online location — a vault for the storage and sharing of documents involved in data storage (and retrieval) of all sorts. A modern VDR boasts many features including enterprise-level encryption, multiple layers of security as well as version control and the ability to be configured to allow only certain parties access to specific documents.
The CapLinked Solution
CapLinked, an industry leader in the VDR space, is a provider of secure virtual data rooms that are used for all types of business transactions, including data collection and storage. CapLinked VDRs have many user-friendly features — including an interface that is compatible with virtually every type of computer and tablet, and, because of that, it gives users the ability to upload and download documents from anywhere around the globe. To see how CapLinked can help secure your first-party data, start a free trial.
Chris Capelle is a technology expert, writer and instructor. For over 25 years, he has worked in the publishing, advertising and consumer products industries.