Third-party cookies are crumbling, but there’s a sweeter data collection strategy that businesses can use to gather valuable insights while protecting consumer privacy.
Consumer concerns over data privacy are driving transformative changes in industries across all sectors. According to the Pew Research Center, 79% of consumers in the U.S. are worried about how their data is being used by companies online, putting pressure on both private and public entities to rethink how data is managed and regulated. In response to these concerns, Google is rolling out plans to do away with third-party cookies that track users’ behavior across the web by 2024, and others, like Safari, have already made the switch. This change is a win for consumers, but poses a challenge for enterprises wanting to understand their audience better. Adhering to strict data privacy regulations requires companies to invest in advanced data protection strategies, develop comprehensive privacy policies, and establish mechanisms for obtaining informed consent.
That’s why many organizations are turning to first-party data: information that’s collected on company-owned websites, mobile applications, and marketing emails with users’ consent. As businesses navigate this evolving landscape, it has become crucial to not only understand the importance of first-party data but also develop robust strategies that leverage its full potential. By developing an effective and flexible first-party data strategy, businesses can gain a competitive edge, enhance customer engagement, and drive sustainable growth — without compromising privacy.
First-Party Data: Where Personalization and Privacy Coexist
Third-party cookies help businesses generate highly personalized ads by tracking users’ actions and preferences across websites to create detailed consumer profiles. The problem is, users don’t usually offer their consent for businesses to do this — nor do they know that their data is being collected in the first place.
Data privacy laws, such as the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA), have been passed to give consumers more security, transparency, and control over their data as they browse the internet, heavily limiting the use of third-party cookies. This is where first-party data comes in. With enterprises still needing a way to understand consumer behaviors while remaining compliant with privacy laws, first-party data enables organizations to collect detailed insights on consumer insights and trends by getting data voluntarily provided by users.
Maximizing the Benefits of First-Party Data
A first-party data strategy can help organizations use direct customer data to create relevant and future-proof ads, even as cookie-based tracking becomes less reliable. Plus, organizations can keep their strategy current by regularly tailoring their messaging, recommendations, and offers to meet fluctuating needs and preferences. By doing so, businesses can greatly improve customer retention. Cutting out the middleman also reduces costs, saving your enterprise money.
To start unleashing the potential of privacy-first data, businesses can follow these tips for building an impactful first-party data strategy:
- Hone into your data’s purpose: Define the specific objectives and use cases for leveraging first-party data. Think about what your current business goal is, whether it’s consumer retention, brand awareness, or social impact, and figure out how first-party data can provide the insight you need to meet those benchmarks.
- Identify potential sources and gaps: Make a list of the first-party data sources within your organization you can already use, such as your company website, e-blast lists, and social media pages. Consider exploring other engagement points your business may be missing out on that can help fill in the blanks of your data analysis.
- Prioritize cybersecurity and privacy: Ensure that cloud data governance practices are in place to protect customer privacy and secure data. Implement measures like notices, disclaimers, and transparency to build consumer trust and comply with privacy regulations.
- Develop a data & analytics plan: Define key metrics and indicators to measure the success of your first-party data strategy. Otherwise, you could be losing potential leads.
- Embrace other types of data: Incorporate other data types, such as zero party data, as well as interest-based and contextual advertising to complement first-party data insights.
- Stay adaptable and compliant: Stay informed about the latest developments in online privacy and data management to ensure compliance and make necessary adjustments to your first-party data strategy when needed.
The Rise of Zero Party Data
While helpful, first-party data on its own can only go so far in helping build a comprehensive consumer profile. Simply knowing the what doesn’t necessarily mean organizations know the why regarding consumer behaviors. For example, first-party data can give companies information such as purchase history and demographics, but not tell them why someone favors a competitor’s site or what other types of products they’re interested in buying.
Zero party data can help. This type of data gives insight into the reasoning behind consumer behavior, allowing businesses to understand the underlying motivations, preferences, and decision-making processes of their target audience. While first-party data is passively collected, zero party data is explicitly provided by customers through surveys, preference centers, or interactive experiences. This type of data can include anything from interests and purchase intentions to product feedback and other valuable insights that customers are willing to share.
By directly soliciting and obtaining zero party data, businesses can empower customers to have more control over their data and the type of experiences they receive, fostering a sense of trust and transparency. Businesses wanting to truly create a holistic data strategy should integrate zero party data to gain a deeper understanding of customer motivations and create more personalized and targeted experiences.
Strategize Confidently with SEI
From media conglomerates to mom-and-pop shops, SEI can help businesses from an array of industries achieve excellence with personalization and privacy in mind. First-party data, along with other sources of voluntary consumer input, are invaluable ways to optimize any outreach strategy while prioritizing data protection in the cloud.
As technology and regulations continue to evolve, partnering with a knowledgeable consulting firm like SEI can make all the difference. Our capabilities in security, risk and compliance, combined with a deep industry expertise, enable businesses to unlock the true potential of their data assets and achieve sustainable growth. To learn more about how SEI can help your organization develop a winning data strategy with a first-party data-dominant approach, talk to us today.