Interviews, insight & analysis on digital media & marketing

How to build powerful customer experiences through first-party data in the new era of marketing

By Tido Carriero, Chief Product Development Officer, Twilio Segment

Earlier this year, Google announced plans to phase out the third party cookie, the tool brands everywhere have used to track and target their audiences across sites. In a similar move, Apple’s iOS14 now requires users to opt into cross-app tracking, the mobile equivalent. 

With tech’s biggest players leading the way, it’s clear we’re on the verge of a new consumer privacy-first future. But where does this leave marketers? 

Third-party data has long been used by brands to fuel ad campaigns and power personalisation. Without it, many are worried that we’re going back to square one at a time when the pressure to deliver highly personalised customer experiences has never been greater. 

Those fears are understandable, but they’re unfounded. The reality is that brands now have an opportunity to rebuild consumer trust from the ground up, harnessing first-party data to deliver far more powerful experiences than third-party data could ever hope to offer.

Recognising the power of first-party data

Providing respectful, hyper-personalised customer experiences is now the expectation, not the exception. Marketers therefore need to shift their focus to first-party data – the information about their own interactions with their own customers. This form of data can include the likes of how often a customer visits your site, or what products they view.

Unlike third-party data which is aggregated from multiple websites and shared without permission, first party-data puts consumer privacy first. As it comes from your own channels, it’s more reflective of your audiences, and it can be used to drive powerful applications like advanced analytics and marketing campaigns. 

The challenge for brands in 2021 is therefore not just how they use their customer data, but what customer data they take advantage of in the first place.With first-party data now a necessity, here are three considerations to help you adapt to the new reality:

1. Build a solid data foundation

First-party data comes from hundreds of sources across your company’s digital universe, from social media channels to customer service chatbots. But if it’s not reliable, organised and readily accessible, it won’t be of much use. If you want to deliver truly world class, multi-channel marketing campaigns, a centralised, clean source of first-party customer data is crucial.

The truth is that for many brands, their data infrastructure is a tangled mess that has been patched together over time. Many tech teams aren’t big enough to build and maintain a consistent data infrastructure, and that often leads to data siloing and inconsistencies – a problem for marketing, sales and product teams alike. 

A customer data platform (CDP) is a good plug-and-play alternative, as it centralises, cleans and consolidates all the first-party data your business is collecting in one central place. CDPs provide a real-time view of the customer, and can easily integrate with a wide range of martech tools on the market without needing any engineering support or maintenance. 

2. Assemble a martech stack that puts first-party data, first

First-party data is only as good as what you make of it. Once you know you can trust your data foundation, you need to choose the right martech tools to ensure you’re harnessing its full potential.

From advanced analytics platforms like Amplitude and Mixpanel to message automation services like SendGrid, there are plenty of powerful martech tools that can work perfectly using first-party data alone. When weighing up your options, look for tools that have been purpose-built for first-party data, as these are likely to be the most innovative and future-proofed on the market.

When assembling your martech stack, keep flexibility in mind. Your business priorities will evolve over time, so look for versatile tools that can be easily switched in and out of your data infrastructure as it matures.

3. Rethink how you’re targeting customers

First-party data can shake up your approach to targeting customers – and that’s a good thing. 

For example, the more complete view of the customer that first-party data provides allows marketers to build out more specific audiences. For example, a retailer could single out loyal customers that have made no purchase in the last month and tailor messages to this segment through platforms like Facebook and Google Ads. This is more powerful than what was possible through third-party data, as it relies on a deeper understanding of the customer and your historic relationship with them. 

Lookalike audiences are another powerful application of first-party data. Facebook, for example, offers ‘lookalike’, similar audiences from their first-party data for you to target. It’s an approach that is a powerful, privacy-centric alternative fit for 2021.

The future is now

By 2023, 65% of the world’s population will be governed by privacy regulations, and it’s safe to assume more brands will follow Apple and Google’s lead and put privacy first in the coming years. 

But the death of the cookie is an opportunity – not a loss – for marketers everywhere. By leaning into first-party data and building direct relationships with customers, brands can power hyper-personalised customer experiences never before possible.