First-party data has emerged as a cornerstone for successful paid media campaigns in a digital landscape reshaped by privacy regulations and the phasing out of third-party cookies. This blog describes how to effectively use your first-party data to drive better results, improve efficiency, and deliver personalized experiences to your customers.
You can also watch our webinar on this topic, available on demand here.Â
What is first-party data – and why does it matter?
First-party data refers to information that companies collect directly from their audiences. This includes data from website interactions, purchase history, and other direct engagements. Unlike third-party data, which is often bought from external sources, first-party data is unique to your business, making it more reliable and tailored to your customers’ needs. This opens up the opportunity to be even more personalized, which will help you build stronger relationships with your customers. It’s also independent of external factors such as if and when Google decides to close down cookies. Using this data effectively allows companies to refine their paid media campaigns. Many brands have seen a return on investment increase of up to 20% or more by integrating first-party data into their paid media strategies. By better understanding customer behavior, preferences, and engagement, companies can not only create more relevant ads but also spend more effectively. Let’s say you look at sofas on IKEA’s website, then go to their store and buy one. If IKEA uses their customer data well, they’ll know you’ve already bought a sofa. This means they won’t waste money showing you more sofa ads. Instead, they might show you ads for things that go well with your new sofa, like cushions or a coffee table.
Why use first-party data in paid media?
Using first-party data in paid media campaigns and other activities offers several key benefits:
- Improved customer centricity: By personalizing campaigns based on customer data, brands can deliver content that resonates more effectively, improving customer satisfaction and loyalty.
- Higher ROI: In our case studies we consistently see a 20-50% improvement in Return on Ad Spend (ROAS) when campaigns are driven by first-party data.
- Targeted campaigns and activities: Precise audience segmentation allows brands to allocate budgets effectively, focusing on high-value prospects and excluding current customers where appropriate.
- Scalability and efficiency: Data-driven strategies ensure resources are allocated optimally, improving efficiency and reducing customer acquisition costs.
How to activate first-party data across the funnel
First-party data can enhance performance at every stage of the marketing funnel:
- Awareness: Use CRM data for lookalike modeling and exclude current customers to expand reach.
- Consideration: Target prospects with personalized content tailored to their preferences and behavior.
- Conversion: Retarget customers who abandoned their carts or showed purchase intent.
- Loyalty: Engage existing customers with tailored offers and recommendations, fostering repeat purchases.
Strategies to get started
Activating first-party data is not just about technology, it’s about strategy.
Here are some tips on getting started:
- Run pilot campaigns: Start small with targeted campaigns to demonstrate ROI and gain stakeholder buy-in.
- Leverage AI and automation: Use algorithms to enhance personalization and scale results efficiently.
- Focus on data orchestration: Build a solid data foundation that integrates multiple sources (CRM, ERP, and digital platforms).
- Prioritize privacy compliance: Ensure all data collection and usage align with relevant privacy laws.
To summarize
Using your own customer data isn’t just a choice anymore – it’s how businesses stay competitive. By understanding your customers better, you can make smarter ads, create better experiences, and grow your business.
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