What is first-party data?

With Google announcing the phasing out of third-party cookies and the development of its own Privacy Sandbox, companies are increasingly focusing on first-party data. 

But what is first-party data?

First-party data is data you collect directly from your customers and audiences via interactions with them. This includes demographics, purchase history, website activity, interactions, interests, mobile app data and behaviours-including clicking on an email or reading an article on a website.

Such data is usually collected through sales of your products and services via support processes, forms on your website, subscriptions, surveys and social media connections.

Other sources of data, such as the standard third-party data are collected from other sources.

And because you have collected it directly from your customers, you know that it’s going to be accurate and relevant to the products and services you offer.

It is stored in your business systems. This means in your CRM, marketing automation platform and other applications.

So why does first-party data matter?

The customer experience is constantly evolving as consumers continue to get smarter, thanks to the internet giving them more access to information which helps them make purchasing decisions, alongside how they expect businesses to treat them.

If they can get personalised experiences, customers will willingly trade their information. Ensuring you have access to first-party data ensures you have accurate data that will enable you to build those experiences.

Another reason why first-party data matters is due to growth of privacy expectations from customers. Under data privacy regulations one must ask customers for permission to collect and store their data and explain how their data will be used and why you are collecting it. 

With the shutting down of things like Google’s cookies, first-party data is the sensible way to both continue to understand your consumer base whilst respecting their desires for privacy and security. Whereas with third or second-party data, there is always the risk that a customer may complain about never having given permission for their data to be shared with you.