The Big Impact of First-Party Data

First-party data isn’t new. What is new is the growing realization among brands of how vitally important this data is to their business. And further, it turns out that companies reporting the greatest impact from their customer data are much more likely to be using first-party data than other companies.

Today, along with Econsultancy, we’re releasing the results of a survey of more than 300 senior marketers, and what they told us adds to the mounting evidence on the importance of first-party data. The results are powerful: First-party data garners the highest return on investment of any data type, and it has the potential to do still more. Two-thirds of marketers surveyed said that first-party data provides the best path to customer understanding and high performance.

Among their major initiatives, marketers say that first-party data drives better results than all other kinds:

  • 74% said first-party data gives great insights into their customers
  • 64% pointed to first-party data as driving the greatest increase to their customer lifetime value
  • 62% found that first-party data causes the highest lift among their data sources
  • 68% selected first-party data as the easiest data investment to justify financially

First-party data—all of the data that is collected and owned by your brand—is most likely sitting on servers at your company right now. Some of this data is used frequently, such as customer email addresses for your email marketing campaigns. And some of this data has probably never been activated, as it’s sitting in silos where it hasn’t been connected to your other sources of customer engagement data.

Among the vast array of data sources, first-party data is what will give your brand a competitive advantage, such as a higher ROI and stronger capabilities. This data is the foundation for understanding your customers, because it’s based on their actual interactions with your brand across touchpoints, both historical and real-time, rather than the behavior of lookalikes that occurred weeks or months ago. It’s the data the customer entrusts to you.

When shoppers visit your website or use your mobile app to browse your inventory and read about your offerings, they are willingly giving your company information. In exchange, they want your help in meeting their needs and they expect you to provide a higher level of service.

A case in point is Kraft Foods, which embarked on a strategy to leverage first-party data from more than 100 million monthly unique visits to its digital properties, as well as billions of ad impressions.

From its customer interactions, Kraft collects more than 22,000 individual attributes, including flavor and product preferences, and uses them to target billions of dynamic, personalized ads to specific customer segments such as loyal buyers of Philadelphia cream cheese or K-Cups.

Rather than purchasing third-party audience data, Kraft used first-party data to build its own customized segment of dessert-loving consumers who celebrate Easter. To drive sales around the Easter holiday, Kraft pushed its popular “Bunny Cake” recipe to this target audience. The result: a 23% sales increase for four Kraft products used in the recipe and a 4x return on their ad spend.

The tide is turning toward first-party data. It’s easy to see why marketers are so drawn to a strategy that relies on their own data:

  • It’s accurate. Your customers gave this information directly to you.
  • It’s unique to your brand. This is your valuable proprietary information.
  • It’s current. You know exactly where and when this data came from.
  • You’re already collecting it. It’s important to drive all the value you can from your investments.

This data makes it easy for you to really know your customers, personalize their experience, and engage them across mobile, web, and every other channel.

The digital advertising industry was largely built on third-party data. But the advantages of first-party data are quickly making it the strategic priority for the vast majority of marketers.

Welcome to the age of first-party data! It’s a great time to be a marketer.

Read the Signal + Econsultancy report, and learn more about how marketers are driving big value with their own data.

Originally published June 22, 2015

Mike Sands

Mike Sands is a co-founder of Signal. Prior to joining Signal, Mike was part of the original Orbitz management team and held the positions of CMO and COO. Mike also has held management roles at General Motors Corporation and Leo Burnett. His work at General Motors led him to be named a “Marketer of the Next Generation” by Brandweek magazine. Mike holds a Bachelor of Science degree in Communications from Northwestern University and a Masters in Management degree from the J.L. Kellogg School of Management.

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