What is first-party data?
First-party data (1st party data) is information about your own users or visitors that you have collected yourself based on their behavior on the website. Such data is very high quality and useful and primarily used for marketing purposes.
In the digital world, we distinguish 3 types of data about users or more precisely - about visitors to digital channels, whether it is a website, eCommerce or social network.
First-party data (1st party data)
First-party data (1st party data) are data about your users or visitors that you have collected yourself and may include online and offline data. These are :
- Information about the behavior, activities, or interests that users have displayed on a page, webshop, or application
- CRM data (purchase frequency, logging pattern…)
- Data on subscriptions, complaints, refunds
- Social media data obtained if there is a login via social networks
- Completed surveys
- User feedback
- Any other information you enter into the CRM (e.g. customer interview notes, related parties)
Second-party data (2nd party data)
Second-party data (2nd party data) are by definition someone else's first-party data used for your business's purpose. The goal of using such data is to expand the target group and increase the base of potential customers. The information may vary depending on the data source.
When purchasing or using such data, it is important to know whether users have been aware of the fact that the source from which you receive the data plan to sell and pass it on to someone else and whether they have given their consent. Often consents do include that item.
Second-party data are data that you receive directly from the owner, without intermediaries, and you believe in their accuracy and relevance.
One example of use is the collaboration of two companies with similar target groups, with non-competitive or complementary products or services, which come together in a joint campaign to expand the target group, so one of the items of cooperation is data exchange.
Third-party data (3rd party data)
Third-party data (3rd party data) are data that can be purchased, obtained or used through intermediaries, ie third parties that are not also a source of data. Such data is found mainly on platforms that buy or receive it from first-party owners, format it into a single database and sell it on. With such data, one should be careful in terms of security whether they really include what we need for business development.
Third-party cookies – a thing of the past
In addition to these three types of data, the following term is often mentioned: third-party cookies. These are actually cookies that are placed on your website by a third party. For example, you can have a Facebook LIKE button on the webshop. By pressing this button, a cookie will be stored on the user's computer that will allow Facebook to later identify visitors and see which pages they have visited.
It could therefore be said that Google and Facebook are the most well-known aggregators of 3rd party data, at least in terms of eCommerce marketing. Numerous data obtained in this way are used to determine the target groups, to profile the audience and for optimal placement of ads.
As Google discontinues support for 3rd party cookies in Chrome in 2022 (as Firefox and Safari have already done, for example), such data ceases to be the basis for digital marketing activities through Google's Ads platform, and in fact the focus shifts to 1st party data.
However, it should be noted that Google has come a long way in developing so-called Federated Learning of Cohorts (FLoC), data that should replace advertisers with valuable information provided by now-almost-former cookies, and promises that conversions will remain at least 95% of current. With the world’s largest consulting firms such as BCG, Google is actively researching how this will affect advertisers.
How to collect and use 1st party data on the webshop?
As we wrote a few weeks ago in an overview of trends in digital marketing in 2021. (read the full article here), quality management of a first-party database involves several steps:
- Create a fair and transparent value exchange system between your company and users, so you can start building your database
There are many ways to do this in eCommerce, these are just some of them:
- Offer benefits in the form of free shipping for registered users with a 100% completed user profile
- Offer a one-time discount to perform a certain action, e.g. completing the survey
- Introduce a loyalty program that rewards the frequency of purchases, not just the amount
- Ensure compliance with local regulations and data protection laws – inform yourselves about them, formalize data management within your company (where the data is, who has access to it, how it is secured)
- Work on developing innovative data collection by creating new and useful ways to communicate and interact with your clients
- Introduce regular customer satisfaction surveys
- Create different types of content to get to know users better and get more interactions and feedback (infographics, videos, guides)
- Create content and platforms (eg Facebook groups, online workshops) that may reach a smaller number of users, but describe them in a better and more detailed way
For users and visitors, 1st party data is much safer and more private, and for website and eCommerce owners, a much higher quality data set. The "problem" arises in the mechanism of collecting and processing such data.
1st party data on Shape Core eCommerce websites
We at Shipshape have taken this topic very seriously, and the result of this effort is Internal Customer Tracking – an automatic, CMS-integrated solution for collecting and processing 1st party data on the website.
The system works by anonymously recording the behavior of visitors on your webshop before becoming a customer, and after registering and becoming a customer, the data is saved in the background of his account.
Once we established this, the next step was to develop internal Marketing Automation – automation of marketing activities based on the collected data.
Automatic customer tagging considers a certain pattern of behavior, it groups customers into groups (eg. buys only category XY, buys once a week, constantly puts in the cart, but never buys) according to which custom marketing messages are then automatically sent.
We will write more about internal customer tracking in one of the following blogs.
We recommend that you check by then whether your webshop has the ability to collect 1st party data and how it is used.
Also, if you are getting ready for ecommerce website building, be sure to include this topic in the list of items you will discuss with your developers.