How to use first-party data to personalize ads

Have you ever felt that someone is watching you online? The pair of shoes you just searched for on Amazon suddenly appeared in an ad on Facebook. Maybe you start to see ads on YouTube that you are researching about a vacation destination.

The fact is that you are being monitored.In fact, marketers have Used cookies The behavior of Internet users has been tracked for years-but this situation may soon change.Google announced that they are Terminate the use of third-party cookies.As a result, most companies will have to Rely on first-party data Used for things like ad targeting.

What does this mean for your marketing strategy? It may not be as bad as you think.

This is the first-party data you need to know and how to use it to create information Targeted paid advertising. (Spoiler alert: In the long run, your PPC strategy may actually be better!)

What is first-party data?

Before we delve into what this change means to you Paid advertising, Let’s talk about the different data types that companies use in marketing.

First-party data is information about its customers that the company collects from its own sources. For example, data from your website tracking tools, your email subscribers or survey audiences.

Third-party data is when two or more organizations share data together. Third-party data is usually collected by one source, then aggregated, and then sold to a third party unrelated to the original source.

in conclusion:

  • First party data: Data you collect about customers or website visitors
  • Second party data: Data you are with other people
  • Third-party data: Data collected by one party and sold or shared with unrelated third parties

What is the difference between first-party data and third-party data?

Third party information, The type that Google is phasing out, refers to data collected from third parties (as you may have guessed), third parties refer to websites or entities that are not directly related to the original source.

Third-party data is collected, aggregated and sold to other parties. The problem is that the brand that buys the data hardly knows the source of the data.

There are other questions. For example, you can buy third-party data, but so can your competitors. This makes it difficult to compete.

This picture Helps illustrate the differences between different types of data.

What is the difference between first-party data and third-party data

Why should we phase out third-party data?

The main reason for eliminating third-party data is the main security and privacy issues.

David Temkin, Director of Product Management, Google Advertising Privacy and Trust, shared

People do not have to accept tracking on the Internet in order to obtain the benefits of relevant advertising. Moreover, advertisers do not need to track individual consumers on the network to gain the performance advantages of digital advertising.

Advances in aggregation, anonymization, on-device processing, and other privacy protection technologies provide a clear way to replace individual identifiers.

Google is not the only company to phase out cookies. Firefox stopped using cookies in 2013, And Microsoft sets “Do Not Track” as the default setting same year.

In addition to privacy issues, cookies are not as accurate as some people believe. For example, they cannot always track the user on the device.

If you buy a pair of shoes on your phone but on your laptop, you may still see ads for these shoes on your mobile device, which is very bad for ad spend, because the brand is wasting money to target conversions User.

How will the use of first-party data affect ad personalization?

As Google phases out third-party cookies, many brands will begin to use first-party data to better personalize ads. What does this mean for your paid marketing strategy?

Don’t worry that you won’t need to rebuild your marketing strategy from scratch. However, you need to be aware of some changes:

  • Brands will need to focus on collecting first-party data: If you haven’t collected data about your audience, now is the time. Consider hosting a contest, use a website tracking tool or send a survey to gather more information about your audience.
  • Competitive analysis will become more difficult: One of the disadvantages of third-party data is that you and your competitors use exactly the same positioning data. As third-party cookies are no longer used, it may be difficult to understand why your competitors are taking certain measures.
  • Ads may become more personalized: First-party data is data from your actual website visitors and customers, making it easier to create a personalized experience.

Today, a shift away from third-party data is unlikely to have a huge impact on the marketing field. Most brands will begin to rely more on first-party data. However, Google is also creating what they call a “privacy sandbox” to allow brands to target users without violating their privacy.

Brands that want to succeed shouldn’t completely rely on Google’s new data plan, because there are many advantages to using this type of data?

Advantages of using only first-party data for ad personalization

Why should you consider moving to first-party data instead of just relying on Google’s privacy sandbox?

First, most brands are increasing their reliance on first-party data, which may mean that they are seeing positive results. According to Google, 87% of Asia Pacific brands Think this is essential to their marketing efforts.

Google first-party data usage statistics

Let’s look at other benefits to consider.

First-party data is more accurate

First-party data is the information you collect about customers. This makes it more accurate because you know its purpose and source.

Third-party data is sold and sometimes resold, which means that the brand has no access to the source data and sometimes even little knows the actual source of the data.

Improve marketing performance

Some people do worry about the termination of third-party data, but I am not. why? Because first-party data is not only more accurate; it is also more effective in attracting consumers to take action.

According to a study by the Boston Consulting Group, marketers using first-party data have seen an increase in marketing efficiency, almost resulting in Double the revenue of a single ad or placement.

Your competitors do not have the same data

Standing out online sometimes feels impossible. With millions of companies, billions of Internet users and more and more content emerging every day, brands that want to stand out face huge noise.

With the help of third-party data, you and your competitors can buy exactly the same data, which makes competition very difficult. However, your competitors do not have access to the data you collect, making it easier to test new plans or discover opportunities about your own traffic and customers.

You can double the customization

According to Forrester, 89% of digital companies Invest in marketing personalization.It’s easy to see why 80% Of customers say they are more likely to buy from brands that provide a personalized experience.

Personalization using third-party data has never been the perfect choice. You may not know when customers switch from other devices, or whether the data you use is skewed. Using first-party data, you can gain insight into personalized information and ensure that the data is accurate.

More standardized

Imagine asking five people to create a puzzle. Provide them with the same height, length and shape parameters. Even in the same direction, each of these components is not completely combinable.

The same thing happens with third-party data. The way each platform collects it may be slightly different, which makes it almost impossible to collect all the data together. However, with first-party data, you will collect data. This means you can ensure that it is standardized and can work properly with all tools and systems.

Cheap first-party data

The third-party data is purchased from another supplier, which means that you have to spend a lot of cash to purchase data that is less efficient, less accurate, and difficult to use. On the other hand, first-party data is information from your own audience.

This means you don’t have to buy it. You will need to spend some time collecting and storing data, but it may be much cheaper than buying data from other sources.

How to use first-party data to personalize ads

We have already introduced what first-party data is, why Google gave up third-party data, and some of the advantages of using it. How do you actually use first-party data? When using this data to personalize ads, you need to know the following information.

Determine how to use first-party data

Before you start collecting data, take a moment to figure out how to use this data to advance your marketing goals. How you plan to use the data will affect what type of data you want to collect and how you collect it.

You can use it to:

  • Build brand awareness
  • Reduce churn
  • Send ads in time
  • Attract more qualified potential customers

For example, if the data is used to send more personalized Email marketing campaign, You can collect data through email surveys.

Make a plan to collect first-party data

Unlike third-party data, you can not only buy first-party data, but also third-party data. You must collect it yourself. Fortunately, there is no shortage of ways to collect it.

For example, you can collect first-party data from:

  • Website visitor tracking tools, such as Crazy eggs
  • Your mobile app
  • Offline survey
  • Social media channels
  • User registration for your website
  • game

Before planning to collect data, consider how to plan the data to personalize your marketing.For example, retargeting ads, personalized product recommendations, or Account-based marketing.

Ask for permission to collect data

One of the main problems with third-party data is that some Internet users are not even aware that they have been tracked. As first-party data becomes more popular (and privacy laws restrict the data we collect about audiences), Be transparent about the data you collect.

Make sure your audience clearly understands what data you collect, how to process the data, and how to store the data.It is not only the right thing to be transparent about the data you collect and how it is used, but in some places, such as the European Union, it is also required by law GDPR.

Test, adjust and retest

With third-party data, you will get what you get. It is not possible to change the type of data you collect or adjust the collection method.

Using first-party data, you can find the best way to collect data by adjusting the collection method or testing and adjusting how the data is used A/B test ads Look at the audience’s reaction.

in conclusion

Third-party cookies are coming to an end. What does this mean for marketers?This means it’s time to start leveraging first-party data personalise. The good news is that it is more accurate, cheaper, and can even improve marketing efficiency.

The first step in using first-party data is to find a way to collect data through opinion polls, Customer survey, Or website tracking tool. Then make a plan for use. If you need help setting it up, We can help.

Are you planning to use first-party data for ad personalization? What is your marketing goal?

Consult with Neil Patel

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