Are you already late to the First Party Data party? Yes.

Whether you want to be, or not, you are a data company, and the bad news for you is The Wild West of Data is over. 

Before data privacy legislation like GDPR and CCPA existed, there were few guardrails that prevented how companies collected data. You could cookie, paint, and tag users and track them all over the internet. 

And companies that controlled access, such as Google, Apple, Facebook, and Microsoft have had a unique advantage in their ability to track customers since they each control a major gateway. Not to mention the amount of data the ISPs themselves collect and track. 

Long before data protection was in vogue and the consumer was privacy savvy, these large companies have been engaged in a battle to collect and control your user data, identity, and more.

But over the last few years a combination of new legislation and general consumer awareness has made it increasingly difficult for enterprises to collect and leverage 1st, 2nd, and 3rd Party Data (including the new popular term Zero-Party Data). It’s technically challenging, it requires good user experience, smart data collection practices, and a well thought out data and martech stack. And there’s still no clear roadmap for a solution for how to handle the impact of killing off 3rd Party cookies on the ad marketplace, with different proposals floated by various conglomerates.

Additionally, the marketplace continues to evolve. “Data Clean Rooms” are becoming more and more common as companies try to figure out new ways to enhance their own data with data from 2nd and 3rd Parties. Particularly larger scale publishers looking to sell more targeted ads.

Therefore, regardless of how large or small you are, and no matter what type of company you are, you are also a data company, whether you know it or not. 

If you want to market to users, if you want to effectively target customers with ads, if you want to communicate with your users/consumers, you need to think of data as a core part of your business. 

With all of that, how do you ensure that your business thrives in an era when digital marketing has become increasingly difficult? 

The rise of the data titans and the impact of changing the rules on the data rails.

Digital marketing was once hailed as the answer to every marketer’s prayers. Compared to traditional advertising on television or magazine ads, digital advertising provided easier targeting, tracking across the internet was easier, and direct attribution was finally possible. Unlike traditional media, digital gave marketers more control and understanding over almost every aspect of the funnel.

And consumers were fully on board, whether they knew it or not. Meta (Facebook, Instagram, Whatsapp and more) grew to over 4B users worldwide with over 300M in the US, providing them with robust first party data. Over half the planet has volunteered their data onto Facebook, making it the largest identity database in the world. 

But they aren’t alone – Google has over 2B users worldwide through Gmail, Maps, YouTube, etc, and Amazon has has 200M Prime users with 170MM in the US, providing name, address, browsing and purchase history, and entertainment choices. 

Between these three major players (and not even counting other channels such as TikTok, Snap, and Twitter), every aspect of our life as a consumer is documented and monetized. As these companies realized the value of this first party data, they also realized they could control the end points/last mile with consumers, and any changes in the last mile would have major effect on other businesses that share the ecosystem.

For a great example, look no further than how the introduction of new privacy features in Apple’s iOS14 had such a huge impact on Facebook’s ad business that Meta had to revamp their entire approach, and it still hasn’t fully recovered. (And if you’re looking for some info on why and how you need to use Facebook’s CAPI, read about it here.)

Why you’re already late to the first party data party.

Off the back of the Cambridge Analytica scandal, the EU mandated GDPR in May 2018, drastically affecting companies in Europe and anyone globally who does business in the EU. This was followed by CCPA in California, which is likely just the start of new US legislation directed at providing more privacy and control of data back to users.

Prior to GDPR, data titans such as Meta/Facebook, Google, and Amazon had a huge head start on data collection and collecting demographic and psychographic data on consumers. They spent almost 20 years collecting vast amounts of data, and creating marketplaces to resell that data, either directly or through ad targeting products. 

Everyone else spent years being almost completely reliant on 3rd party data with a collection of pixels placed on all their web pages – feeding data to other people, and collecting little themselves. These companies have now realized that they have to own data about their own customers. 

But their ability to obtain data has been greatly hampered because of the opt-ins required for compliance in new legislation – even if you think GDPR doesn’t apply to you, CCPA makes things more complicated for you, while providing more control and privacy for consumers. And general awareness of data privacy as critical issue has moved to the forefront, with companies like Apple using it as a major aspect of their marketing campaign for new iPhones. 

Additionally, the platforms that users interact with – browsers and operating systems – and the companies who control them, namely Google, Microsoft, Apple, etc.) are increasingly adding more privacy-focused features, in some case even when it could hurt their own ad business, with a commitment to ultimately remove support for 3rd party cookies and tracking altogether. 

What’s important to note here is that the platform owners still have access to all the data while restricting newcomers. 

How does this impact you? One example is the new privacy controls in Apple’s Mail client. You can’t track an “open” any longer on Apple devices thanks to their new features. If a user has opted in to a newsletter from their favorite journal, the tracking pixel is blocked from reaching the publisher’s email systems, and the publisher no longer reliably knows which users are opening the newsletter, even though those users have opted in to receive it! This boon for user privacy obviously has an inverse impact on the publisher, removing an important metric that could previously be relied on for understanding how to create content for their customers.

And data restrictions will only continue to get stricter globally as more and more nations adopt GDPR-like policies, and consumers become more data conscious. 

While you already have a data lake (and probably a data swamp) you probably need to work hard to catch up.

So now what? 

Here are some recommendations from our team to make the most of your company’s 1st party data:

  • 1

    Perform a data audit against your most important use cases.

    Pay attention to Monetization & Analytics use cases in particular.
    Think about how you want to use Lookalikes, Exclusion Lists, Targeting.
    Don't forget about how you need to use data for omnichannel messaging, CRM, and personalization.

  • 2

    Use your audit to ensure there is no gap between what you need, and what you have.

    What are your essential data elements?
    Do you have full agreement on your critical KPIs?

  • 3

    Evaluate your schema and ensure that all of your data is properly organized and structured.

    Can all of your teams that need data ask and answer questions easily?
    Can all downstream systems receive data easily?
    Is everything accurate?

  • 4

    Identify opportunities to collect additional 1st Party Data.

    Do you have a value proposition that will interest users?

  • 5

    Do you need data enrichment or help improving your identify graph?

    Do you need to leverage data brokers to build a stronger set of enriched data?
    Do you need data such as education level, household income, age, etc.?
    Do you need to set up a data clean room?

  • 6

    Finally, accept that you'll never going to be "done".

    Your needs will continue to evolve, so make sure your approach and your data systems aren't so brittle that you can't change them as you need.

You're late to the party, here's your roadmap on how to catch up.

Getting it right can be technically challenging, requiring good user experience, smart data collection practices, and a well thought out data and martech stack.

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