The best way to use first-party knowledge for advert personalization
Have you ever felt that someone was watching you online? The shoes you were just looking for on Amazon suddenly appear in ads on Facebook. You might see ads on YouTube for a resort you researched for an upcoming vacation.
The truth is that you are being watched. In fact, marketers have been using cookies to track the actions of internet users for years – but that may change soon. Google has announced that it will discontinue the use of third-party cookies. As a result, most businesses have to rely on first-party data for data like ad targeting.
What does this mean for your marketing strategy? It might not be as bad as you think.
Here's what you need to know about first party data and how you can use it to create targeted paid ads. (Spoiler alert: it might actually be better for your PPC strategy in the long run!)
What is first party data?
Before we dive into the impact of this change on your paid ads, let's dig into the different types of data businesses use in marketing.
First party data is information that companies collect from their own sources about their customers. For example, the data from your website tracking tool, your e-mail subscribers or the survey of your target group.
Third-party data is data where two or more organizations come together to share their data. Third party data is collected from a source, often aggregated, and then sold to a third party that has no connection to the original source.
- First party data: Data that you collect about your customers or website visitors
- Third party data: Data that aggregates you and someone else
- Third party data: Data that is collected and sold by a party or disclosed to a third party
What is the difference between first party data and third party data?
Third party data leaked by Google refers to data collected by a third party (as you might have guessed), that is, from a website or entity with no direct relationship to the original source.
Third party data is collected, aggregated and sold to other parties. The problem is, the brands that buy the data have no idea where it came from.
There are other problems as well. For example, you can buy data from third parties, but so can your competitors. That makes it difficult to be competitive.
This diagram illustrates the difference between the different types of data.
Why is third-party data being phased out?
The main reason for third party data leakage is due to serious security and privacy issues.
David Temkin, director of product management, ad protection and trust at Google, shared,
People shouldn't have to accept being followed across the internet to take advantage of relevant advertising. And advertisers don't need to track individual consumers online to take advantage of the performance benefits of digital advertising.
Advances in aggregation, anonymization, on-device processing, and other privacy-preserving technologies provide a clear avenue for replacing individual identifiers.
Google isn't the only one to expire cookies. Firefox stopped using cookies in 2013, and Microsoft changed it to the default "Do Not Track" that same year.
In addition to privacy issues, cookies aren't as accurate as some might think. For example, they cannot always track users across devices.
If you buy a pair of shoes on your phone but buy them on your laptop, you may still see ads for those shoes on your mobile device. This is terrible for ad spend as brands waste money targeting users who have already converted.
How does using first party data affect ad personalization?
If Google expires third-party cookies, many brands will use first-party data to better personalize ads. What does this mean for your paid marketing strategy?
Do not worry; You don't have to create your marketing strategy from scratch. However, there are a few changes to watch out for:
- Brands need to focus on collecting first-party data: If you haven't already been collecting data on your audience, now is the time to do it. Consider hosting contests, using website tracking tools, or sending out surveys to gather more information about your audience.
- Competitive analyzes are getting more difficult: One of the drawbacks of third-party data is that you and your competitors are using the exact same target data. As you move away from third-party cookies, it may become more difficult to understand why your competitors are taking certain actions.
- Ads may become more personal: First party data is data from your actual website visitors and customers that make it easier to create a personalized experience.
Day by day, moving away from third party data is unlikely to have a massive impact on the marketing world. Most brands will increasingly rely on first party data. However, Google is also creating what is known as a "privacy sandbox" that brands can use to address users without invading their privacy.
Brands looking to be successful shouldn't rely entirely on Google's new data plan as there are tons of benefits to using this type of data.
Benefits of using only first party data to personalize ads
Why should you consider moving to first-party data rather than relying solely on Google's privacy sandbox?
For starters, most brands are relying heavily on first-party data, which likely means they are getting positive results. According to Google, 87 percent of APAC brands think this is critical to their marketing efforts.
Let's look at some other benefits that need to be considered.
First party data is more accurate
First party data is information that you collect about your customers. This makes it more accurate because you know who it is about and where it is coming from.
Third-party data is sold and sometimes resold, meaning brands don't have access to the source data and sometimes have very little idea of where the data actually came from.
Increase marketing performance
Some people are really concerned about the end of third party data, but I'm not. Why? Because first party data isn't just more accurate; It's also much more efficient when it comes to getting consumers to act.
According to a study by the Boston Consulting Group, marketers using first-party data see increases in marketing efficiency, generating nearly double sales from a single ad or placement.
Your competitors don't have the same data
Standing out online sometimes feels impossible. With millions of businesses, billions of internet users, and more content being produced every day, brands trying to get noticed are exposed to a lot of noise.
Third-party data lets you and your competitors buy the exact same data, which makes it pretty difficult to compete. However, your competitors do not have access to the data you have collected. This makes it easy to test new initiatives or uncover opportunities related to your own traffic and your customers.
You can double the personalization
Forrester says 89 percent of digital businesses are investing in marketing personalization. It's easy to see why when they say they are, 80 percent of customers are more likely to shop with brands that offer a personalized experience.
Using third party data for personalization has never been perfect. You may not know when a customer is converting from another device or if the data you are using is skewed. With first-party data, you can immerse yourself in personalization and rest assured that your data is correct.
It's more standardized
Imagine asking five people to create a piece of the puzzle. You give them all the same parameters for height, length and shape. Even with the same instructions, each of these parts won't quite fit together.
The same thing happens with third party data. Each platform can capture it just a little differently, which makes it almost impossible to pull all that data together. However, for first party data, you collect the data. This means you can make sure that it is standardized and works well with all of your tools and systems.
First party data is cheaper
Third-party data is purchased from another provider. This means that you are spending cash on data that is less efficient, less accurate, and more difficult to use. First party data, on the other hand, is information from your own audience.
That means you don't have to buy it. You have to pay a little to collect and store the data, but it is likely a lot cheaper than buying the data from another source.
How to use first-party data for ad personalization
We explained what first-party data is, why Google discarded third-party data, and the benefits of using that data. How do you actually use first party data? Here's what you need to know in order to use this data for ad personalization.
Determine how first party data will be used
Before you start collecting data, take the time to figure out how you will use the data to meet your marketing goals. How you plan to use the data affects what type of data you want to collect and how you collect it.
You could use it to:
- Build brand awareness
- Reduce churn
- Submit timely advertisements
- Drive more qualified leads
For example, if the data will be used to send personalized email marketing campaigns, you can collect the data through an email survey.
Create a plan for collecting first-party data
Unlike third-party data, you can't just buy first-party data. You have to collect it yourself. Fortunately, there is no shortage of ways to collect it.
For example, you can collect first party data from:
- Website visitor tracking tools like Crazy Egg
- Your mobile apps
- Offline polls
- Social media channels
- User registration for your website
Before creating a data-gathering plan, think about how you plan to plan the data to personalize your marketing. For example retargeting ads, personalized product recommendations or account-based marketing.
Ask permission to collect the data
One of the main problems with third-party data is that some web users don't even notice that it is being tracked. As first party data becomes increasingly popular (and privacy laws limit the data we collect about our audiences), it is important to be transparent about the data you collect.
Make sure your audience understands exactly what data you're collecting, what you're doing with it, and how it's being stored. Transparency about the data collected from you and how it is used is not only the right thing to do, it is also required by law in some places, for example in the EU's GDPR.
Test, optimize, and retest
With third-party data, you get what you get. There is no way to change the type of information we collect or customize the way we collect it.
With first-party data, you can test to see how best to collect data by customizing how you collect it, or test and tweak how you use the data using A / B test displays to see what your target audience reacts to.
Third party cookies are running out. What does this mean for marketers? It's time to start using first-party data for personalization. The good news is that it is more accurate, cheaper, and can even improve marketing efficiency.
The first step in using first party data is to find a way to collect it using surveys, customer surveys, or website tracking tools. Then make a plan for its use. If you need help getting set up, we can help.
Are you planning to use first-party data to personalize ads? What are your marketing goals?
See How my agency can drive Firmly Traffic volumes on your website
- SEO – Unlock tons of SEO traffic. See real results.
- Content Marketing – Our team creates epic content that is shared, links accessed and visitors drawn.
- Paid media – effective paid strategies with a clear ROI.
Book a call