A cookieless future: Why first-party data matters to marketers more than ever
Ever since their creation back in 1994, cookies have played an integral part in the way that both businesses and individuals interact with the internet.
For individuals, cookies made it possible to experience a web that remembered them. This meant that a person didn’t need to log back into a website every single time they visited it; it also meant that they could experience a version of a website that was tailored to them — even if tailoring was slight in those early days.
For online businesses, meanwhile, cookies offer a means of tracking customers between multiple sessions. This provided the business with a wealth of customer data that could be used to better target those customers with advertisements and marketing efforts.
In recent years, however, consumers and lawmakers have become increasingly concerned with issues of online privacy — as seen with the passage of laws like GDPR in the European Union and the CCPA in California. This has caused companies like Google and Apple to make plans to restrict and eventually kill the use of third-party cookies on their platforms: Apple in 2020, and Google by Q3 of 2024.
For businesses that rely on third-party cookies, this means the loss of valuable data. Without a replacement, it will be much more difficult to segment your customers with any sort of granularity. It’ll also be virtually impossible to understand who your customers are on an individual level — or to offer a personalized experience when they visit your website.
The good news is that third-party cookies aren’t your only option for collecting this data. Zero- party and first-party data are fast becoming the new gold standard.
Below, we take a closer look at what zero- and first-party data are, and how they work. We also walk through different ways you can begin collecting this data and strategies you can deploy for utilizing it once you have it.
Zero- and first-party data: The new holy grail
To understand what zero-party and first-party data are, it’s first important to understand what third-party data is.
Third-party data, as its name implies, refers to any customer data that is collected or aggregated by a third party — someone without a direct relationship to your customers.
It’s not data that you are collecting; it’s not data that your partners are collecting. It’s data that a data provider is collecting and sharing with you. As such, third-party data is typically stitched together from multiple sources, including (as you might have guessed) those third-party cookies we mentioned earlier.
First-party data, on the other hand, is any customer data that you have collected yourself — importantly, with consent from your customers. Because you’ve collected this data yourself, you have direct control over it without needing to worry about the policies or motives of other companies (third-party data providers, platforms, etc.).
And because the user has consented to the collection of this data, you don’t need to worry about running afoul of GDPR, CCPA, and other privacy regulations.
First-party data can come from a variety of sources, including your business’s website or app, your POS system, CRM, accounting system, and more. Examples of first-party data includes things like:
- Transaction history
- Average order value and lifetime order value
- Page and product views (including repeat visits)
- Products added to carts
- Mouse clicks
- Keystrokes
- and more
Zero-party data, meanwhile, technically isn’t data that you collect. Instead, it’s data that a customer chooses to share directly with you voluntarily.
Any time a customer fills out a form, signs up for a newsletter, completes a survey, answers a quiz, takes a poll, or voluntarily shares some other sort of information directly with you, they are helping you generate zero-party data.
Zero-party data comes with all of the benefits of first-party data, plus the knowledge that it came directly from the customer — making it an extremely powerful tool for personalization.
Building a first-party data fortress
If you’re still relying on third-party cookies and data to understand who your customers are, you must begin putting in place a plan for transitioning to zero- and first-party data. Failure to do so may mean you’ll be left in the dark when Google finally pulls the plug on cookies later this year.
Luckily, there are many strategies you can use to start generating this data. Some options you may want to consider include:
Website forms
When you embed a form on your website, you’re giving potential customers who are not yet ready to make a purchase an opportunity to still interact with your business — and provide you with valuable zero-party data that you can use to begin marketing to them.
How much data, and what data, a person is willing to share with you will usually be directly tied to how much value they believe they’re getting out of the interaction. While perceptions about value vary from person to person and from industry to industry, generally speaking, you want to keep the length of your forms aligned with the perceived value you are providing. The guidelines below can help you design your form strategy:
- Newsletter signups: Usually perceived as low value. Keep forms short. At a minimum, collect the individual’s email address and possibly their first name. Provide an option that allows users to self-segment, for example, an “I’m interested in…” checkbox.
- Coupon codes: Provides direct value in the form of a discount. Tie the length of forms to how generous the discount is. Customers will usually be willing to share more information than they would in a newsletter signup. They might, for example, agree to opt into SMS marketing and provide you with their phone number on top of their email address.
- Downloadable assets: Value depends on the asset you are offering. If you are helping the individual solve a real problem they’ve been experiencing, they will likely be willing to tell you anything you want to know. A B2B company offering a high-value asset, for example, might ask the individual to segment themselves by industry, job title, company, and even “challenges faced.”
Don’t be afraid to get creative in your forms, so long as the questions you ask are always proportionate to the value you provide.
Behavior tracking
How a customer interacts with your website — what pages they navigate to, what videos they watch, what links they click on, what text they read — can provide you with a lot of valuable first-party data.
Once you’ve collected enough of this data, it’s possible to use it to conduct A/B testing on site design and layout, and to ultimately optimize your product pages and landing pages for conversion.
You can even use it to tailor your marketing efforts to individuals, such as offering them a discount on an item that you know they viewed, or by making them aware of similar products they might be interested in.
Not sure what customer behavior to collect? Some options that you may want to consider include
- Click maps: This shows you every time a user clicks on your website, which can help you understand how a user navigates your website.
- Scroll depth: This shows you how far down on a web page a user scrolls before they navigate to a different page or end their session altogether, which can help you prioritize what information belongs closer to the top of the page and what information should fall lower on the page.
- Mouse movement: People often move their mouse along with their eyes as they read text and navigate a website. This can help you see where text or images are hitting the mark — or, conversely, where they are not.
Surveys, polls, and quizzes
Another great way of collecting zero-party data from your customers is creating surveys, polls, and quizzes for them to complete, which can be embedded directly on your website or delivered to your customers via email.
Not only are these interactive tools more fun and less intimidating for your customers than form submissions, but they also make it easier to collect data that can be difficult or impossible to collect in other ways.
Surveys and quizzes, for example, can help you gather information about your customers’ preferences — information that you can use to individualize your product recommendations, promotions, email marketing, and other efforts.
Like behavior tracking, they can also help you conduct A/B tests to optimize your website and products based on user feedback.
First-party data strategies for customer marketing success
Once you've collected zero- and first-party data from your customers, you can begin leveraging it in several ways. A few powerful examples include:
Personalization across the customer journey: Once you’ve acquired a customer, first-party data can help you re-engage them periodically after their initial transaction. Imagine you are an online retailer that sells clothing, shoes, and accessories. The behavioral data you collect shows that a particular customer has only ever engaged with product pages on your website related to shoes.
This allows you to be more targeted in your email marketing approach, tailoring your offers, recommendations, and messaging to the products that they’ve already demonstrated an interest in.
Customer loyalty: First-party data can provide you with insights that make it easier to provide value to your customers, instilling loyalty and preventing churn. Knowing a customer’s birthday, allows you to gift them a coupon code that a.) brings them back to your website and b.) makes them feel like they’re being rewarded for shopping with you.
Customer retention: A customer’s behavior on your website can sometimes be a clue that they are a retention risk; collecting this information makes it possible for you to implement targeted retention campaigns.
Imagine a company that provides a subscription service to its customers, for example, noticing that a particular customer has visited the cancellation page of its website multiple times in the past few weeks. They may choose to preemptively send that customer a discount or credit to keep them around, or an email poll to gauge their level of satisfaction with the service.
Deeper audience understanding: Once you’ve collected enough first-party data, it’s possible to analyze your customer base en masse to potentially uncover hidden trends and segments for more targeted marketing efforts. This can lead to higher campaign relevance, conversion rates, and ultimately ROI.
How a CDW and CDP help
As you can see, zero- and first-party data are extremely powerful assets, and a crucial part of successfully navigating the cookieless future that we are transitioning into. But it doesn’t come without its challenges.
One key challenge lies in the fact that this data typically doesn’t all come from a single source. In most cases, it will be generated by many different tools and systems — your POS system, accounting system, CRM, website management system, and behavioral tracking tools — which don’t always intuitively communicate with each other.
Effectively leveraging your first-party data will require you to find a way to unify all of these disparate pieces of data into a single profile of your customer.
Turning your zero- and first-party data into actionable insights is a two-step process.
The first step involves extracting all of that data from its various sources and bringing it under one roof. This is what a cloud data warehouse (CDW) like Snowflake is for: Storing, structuring, and unifying first-party data safely and securely, regardless of where it originated.
The second step involves taking that data from its raw state and turning it into easily understandable assets. This is where a customer data platform (CDP) like Simon Data comes into play: Quickly and intuitively turning your raw data into customer profiles, segments, and audiences that you can use to drive personalized marketing campaigns.
Ready to start building your first-party data strategy? Take a look at our CDP Buyer’s Guide to learn more about what to look for as you evaluate your options.
Interested in learning more about how Simon Data and Snowflake can help you truly unlock the power of zero- and first-party data? Request a demo today.
