First-party data

What is first-party data?

First-party data is information about your own customers or visitors that you collect directly, for example from their behaviour on your online store or website. This information can be highly valuable for marketing.

In the digital world, we distinguish three types of information about users of websites, online stores and social media channels.

First-party data

First-party data is information you collect directly about your customers or visitors. It can include online and offline information, such as:

• Behaviour, activities or interests that people show on a website, online store or application.
• CRM information, such as purchase frequency and login patterns.
• Subscription, complaint and return information.
• Social media information obtained through social login.
• Completed surveys.
• Customer feedback.
• Other information entered into your CRM, such as notes from customer conversations or associated contacts.

Second-party data

Second-party data is another organisation's first-party data used for your business purposes, usually to expand your target audience and reach more potential customers. The information available depends on its source.

Before buying or using it, you need to know whether users were told that the original collector intended to sell or share their information and whether they gave the necessary consent. Consent statements may explicitly address that possibility.

You obtain second-party data directly from its owner, without an intermediary, and rely on its accuracy and relevance.

One example is a joint campaign by two companies with similar audiences and non-competing or complementary products or services. They cooperate to reach a wider audience, with an agreed exchange of data forming part of the arrangement.

Third-party data

Third-party data is information bought, obtained or used through an intermediary that is not the original source. It is often available on platforms that acquire data from first-party owners, combine it into a database and sell access to it. Care is needed when deciding whether the data is reliable and actually contains what your business needs.

Third-party cookies: the historical context of this article

Third-party cookies are cookies placed on a website by another organisation. For example, a Facebook Like button can allow Facebook to store a cookie that later helps it recognise visitors and understand which pages they have visited.

In the context of eCommerce marketing, Google and Facebook have been among the best-known aggregators of third-party data. Such information is used to define target audiences, build audience profiles and place advertising more effectively.

At the time this article was originally written, Google planned to end support for third-party cookies in Chrome during 2022, while browsers such as Firefox and Safari had already introduced restrictions. That anticipated change was one reason marketers were moving their focus towards first-party data.

The article also referred to Google's then-proposed Federated Learning of Cohorts, or FLoC, as a potential replacement for advertising insights previously obtained through cookies. Google cited a goal of retaining at least 95% of previous conversion performance and was working with consulting firms such as BCG to study the implications for advertisers. These references describe the proposals and expectations at the time, not a statement of current Chrome or advertising-platform policy.

How can an online store collect and use first-party data?

As discussed in our overview of digital marketing trends for 2021, building a high-quality first-party database involves several steps.

Create a fair and transparent exchange of value

Give people a clear reason to share information with your company, so that you can begin building your own data resources. The illustration above shows this exchange of value between a brand and a consumer. Source: Google.

There are many ways to do this in eCommerce. For example:

• Offer benefits such as free delivery to registered customers who complete their profiles.
• Offer a one-time discount for an activity such as completing a survey.
• Introduce a loyalty programme that rewards purchase frequency as well as spending.

Manage data responsibly

Understand the data protection laws and rules that apply to your business. Formalise how information is managed within the company: where it is stored, who can access it and how it is protected.

Develop useful ways to interact with customers

• Run regular customer satisfaction surveys.
• Create different types of content, including infographics, videos and guides, to understand customers better and encourage interaction and feedback.
• Develop content and communities, such as Facebook groups or online workshops, that may reach fewer people but provide a deeper understanding of them.

A direct first-party relationship can give visitors greater transparency and control, while providing website and online store owners with more relevant information. The practical challenge lies in how the information is collected, processed and protected.

First-party data in Shape Core online stores

At Shipshape, we have taken this subject seriously. One result is Internal Customer Tracking: an automated solution integrated into the CMS for collecting and processing first-party information in the online store.

The system records visitor behaviour before someone becomes a customer. Once that person registers and becomes a customer, the information is associated with the background data of their customer account.

The next step was to develop internal marketing automation: automating marketing activities using the information collected.

Automatic customer tagging groups people according to particular behaviour patterns. Examples include customers who buy only from category XY, purchase once a week, or repeatedly add products to their cart without completing a purchase. Tailored marketing messages can then be sent to the appropriate groups.

We planned to cover Internal Customer Tracking in greater detail in a subsequent article. In the meantime, check whether your online store can collect first-party data and how that information is used.

If you are planning a new online store, make sure this topic is on the list of questions to discuss with your developers.