Marketers rely on ad platforms that have for years used third-party cookies to track user behavior on the internet. But the GDPR and CCPA regulations have paved the way for Google’s announcement on phasing out third-party cookie tracking, Apple iOS 14+updates and android privacy update. This has created a need for marketers to leverage first-party data for sending personalized messaging to customers and improve ad campaign performance.
Here is an insight into how you can use first-party data to create paid targeted ads. It can help improve your ad campaigns.
What is first-party data?
First-party data is data that a company has collected directly from its customers or end-users. It can be collected from various sources such as web interactions, mobile applications, and loyalty programs straight from the customers.
We can classify First-party data into two types:
1. Anonymous visitors
Anonymous visitors are visitors who browse your website without providing details such as email id, first name, last name, and contact number. And this usually comprises 98%.
2. Known visitors
The remaining 2% can be your customers or subscribers who provide you with the necessary details such as email id, first name, last name, and contact number while making a purchase or filling out a form.
Why is first-party data on every marketer’s radar now?
👉 Struggle with third-party data
The other disadvantage of using third-party data is that you and your competitors end up using the same data for targeting.
👉 A decline in ad campaign performance
iOS 14+ update gives Apple users the option to opt out of being tracked (data sharing) every time an app is downloaded. This has resulted in poor ad performance. Retargeting audience size is reduced by more than 50% and match rates are at an all-time low of 25% with most of the users opt out of tracking. This has adversely impacted the advertisers, as they have been using this data for ad targeting purposes.
Since the Facebook and Google ad platforms’ behavioral tracking ability is limited, advertisers are not able to segment audiences and run personalized retargeting campaigns.
Facebook, Google, and other ad platforms allow marketers to use only the default audience segments. Whereas, first-party data can be collected using CDP tools like CustomerLabs which lets marketers use various advanced audience segments.
How to collect first-party data?
E-commerce businesses will not be able to rely on collecting user behavioral data from ad platforms like Facebook and Google with the above-mentioned recent updates.
It is time to collect your data, own it, and understand your user behavior since the ability to collect data is severely limited.
Most marketers think that first-party data is collecting known visitor’s data. But collecting anonymous data is equally important as collecting known visitor’s data or customer’s data. Even a 2-3% increase in sales from anonymous website visitors can reflect positively on your revenue.
You can consider using CDP tools like CustomerLabs to collect data of both anonymous and known visitors of your website.
How can brands use first-party data?
👉 Build customer profile
Get a complete view of anonymous visitor data and their activities within your E-commerce store. Similarly, create a separate customer profile for known visitors. This helps you to provide the marketing team with a 360° view of the customer profile. CustomerLabs aggregates IDs from multiple data sources and creates one single user profile containing all the IDs.
👉 Create customer segments
Classify your website visitors into smarter segments based on activity, traits, location, or events. You could create segments such as a customer visiting a product page, check-out page, shopping cart abandonment by shoppers, etc. Here is an example. Customers who bought products like candles during a festive season 6 months back can be segmented to run ads especially for them with a discount in the upcoming festive season.
👉 Personalized retargeting ads on anonymous visitors
Personalization can be effective in driving repeat engagement. Ads can be retargeted on anonymous visitors based on their behavior. These anonymous visitors can be grouped under different segments.
⚫ Product is viewed more than 5 times
⚫ Segmented users who have more than 5 products on their wishlist
Retarget the above-segmented audience for better ad performance.
👉 Personalized retargeting ads on customers
Similarly, you can run personalized retargeting ads based on their behavior and activities. For example,
⚫ Customers who bought kurtas during the end-of-season sale
⚫ Customers who only bought kurtas
⚫ Customers who purchased in the festive season
⚫ Customers who purchased power eye glasses-can be retargeted to buy coolers
Ads can be retargeted based on these segments and drive customers to make repeat purchases.
👉 Predict Customer behavior and interests
You also can predict customer behavior based on the customer purchase history. And you can predict the purchase of a website visitor based on their website behavior.
What is Second-party data?
Second-party data in general is termed as another company’s first-party data. As a business you’ll be getting other companies first-party data through some partnership or you’ll be purchasing the data from other companies which is their first-party data.
Let’s say you are running a ecommerce business selling high-end fashion clothes, and you partner with another firm which sells high-end shoes. You purchase the data from your partner who sells high-end shoes. And this data is called second-party data.
The Benefits of second-party data is that you can reach out to new audiences who have similar interest to your product as well. Like in first-party data, with second-party data you can segment data based on interest and can run campaigns as well.
What is Third-party data?
Third Party data is data that can be bought from the data aggregators by paying them. The data providers will aggregate the data sets from various platforms and websites where it was generated, they are not the original collectors of that data. Further data aggregator segments the data based on category, interests, etc.
The GDPR and CCPA regulations, iOS 14+updates, and android privacy updates have limited the behavioral tracking abilities of ad platforms like Facebook and Google. To overcome these problems Facebook and Google introduced Conversions API and Enhanced Conversions to improve the tracking of user behavioral data.
Times are changing. Now is the time for businesses to use first-party data to collect user behavioral data and use ad platforms like Facebook and Google exclusively only to run ads.