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What is First-Party Data?

By Privacy Research Team
Published on February 20, 2023

No matter where you are, data is all around you and powers everything you do. Estimates suggest that a whopping 25,000 petabytes of data are created every day. By 2025, the amount of data generated daily is expected to reach 463 exabytes globally.

With data being generated at an exponential rate, businesses are increasingly focusing on how to curate and profit from that data to survive in the market, innovate, and increase the profitability of their goods and services.

With technology and digital devices becoming mainstream, the term "data" has been used to describe information that is collected, processed, stored, and shared by computers. In the digital realm, marketers gather first-party data to understand their customers better. So, what is first-party data?

What is First-Party Data?

The information businesses own and obtain through myriad digital channels is first-party data, also called 1P data. First-party data refers to all information about customers that comes directly from both online and offline sources, including:

  • Company's website
  • App behavior
  • Surveys
  • Social media platforms
  • Customer relationship management
  • Email and newsletter subscription
  • Lead generation campaigns
  • Time spent on site
  • Customer feedback
  • Online chat
  • Sales conversations

Why Do Organizations Collect First-Party Data?

Since first-party data is the most reliable source for customer information, it enables organizations to develop highly personalized content, advertising, and experiences tailored to specific individuals (i.e., what customers are interested in, what problems they are facing, what their needs and preferences are, etc.).

First-party data enables organizations to monitor users’ behavior on a website or app and the subjects they find interesting (for example, what items they like). An individual’s IP address, preferred language, timestamps, and visited URLs are also considered first-party data.

All of this data is gathered by online businesses and stored in a database (preferably the customer relationship management system) to build a reliable data bank of visitors and their preferences. This helps the organization to develop a unique, reliable profile of an individual over time so that their marketing activities and channels can target the individual with relevant content at different touchpoints accordingly.

Benefits of First-Party Data

First-party data provides excellent insights into an organization’s audience because it belongs solely to the organization unless they share it with others. When businesses have a complete understanding of their consumers' preferences and actions, it gives them an added advantage over competitors, such as:

  • Personalization and Integration
  • Target the right customers
  • Accuracy and control
  • Strengthen customer relationships
  • Compliance with privacy laws
  • Transparency
  • Lower cost

Enables Accuracy and Control

First-party data provides reliable insights and provides organizations added control to process data accurately for targeted, customized campaigns. Since businesses get their data straight from customers who visit their websites, it is also more accurate than information from other sources.

As data gets accumulated from various customer-facing touchpoints, marketers can create distinctive brand experiences tailored to specific interests, tastes, locations, purchase histories, etc.

Builds Trust

By accurately targeting and offering customers a personalized user experience, organizations can build a long-lasting relationship with the customer and ensure they comply with local and international data privacy laws by only obtaining information the customer has willingly consented to provide.

Ensures Compliance

Organizations must be transparent about their data collection, processing, storage, and sharing activities to ensure business continuity, improve brand reputation, and avoid penalties for noncompliance. This enables organizations to target their exact narrowed-down audience with high-quality data insights without incurring added costs.

Difference Between First-Party, Second-Party, & Third-Party Data

First-Party Data:

First-party data is a fairly easy concept to understand. The data collected by an organization on its own website for its own internal use is first-party data.

The organization collecting this data can use it to create ads, content, and experiences that are most likely to appeal to their customers’ likes and interests, thereby increasing their chances of making a purchase.

Second-Party Data:

Second-party data is comparatively a more complicated concept to understand. Essentially, it’s first-party data from a trusted partner that a second organization can use.

Its value comes from the fact that this data can be used to scale up an organization’s operations and that, compared to third-party data, it isn’t as easily available. With responsible use, organizations can maximize their chances of getting a potential customer to make a purchase.

Third-Party Data:

Third-party data is when a user’s data is collected for an organization by a third party. This collected data is then sold to an organization that wishes to buy it for use in their advertising needs.

Third-party data’s value comes from the sheer volume of data it can provide as well as the variety of data. This can help organizations target their potential customers on a mass scale.

First-Party Data Amidst Data Privacy Laws Era

First-party data can be gathered without additional cost, and the organization that holds the data obtains this information with the customer’s consent, which is crucial in the age of privacy laws, such as the European Union’s General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA).

First-party data is the easiest data to utilize and demonstrate consent since organizations can explain when and how consumers agreed to have their data collected. Like the GDPR, the CCPA demands that businesses demonstrate that their data collection practices are lawful and transparent. This is made simpler and more visible by using first-party data.

Some data protection laws, like the GDPR, require opt-in consent. It means that GDPR-regulated businesses must first obtain the consent of the users for data collection and processing. More importantly, the updated European Data Protection Board (EDPD) guidelines restrict businesses from using pre-ticked boxes since it is not a valid method to obtain consent.

Some other data privacy laws, such as the CCPA or CPRA, require opt-out consent. Opt-out consent means that businesses can collect data by default, but they must provide visitors with a mechanism to opt-out of data collection, such as by providing an opt-out button at the footer of their website.

Learn more about opt-in consent vs. opt-out consent.

First-party data is one of the most important types of data. Thus, every business should consider gathering it and leveraging it. More importantly, first-party data is now even more critical for businesses as Google declared that third-party cookies would gradually be removed from Chrome browsers by 2022 (delayed to 2024).

Concerns about data security and privacy rank among the principal obstacles marketing faces when trying to improve the effectiveness of advertising. Business and financial hazards emerge with improper handling of user data. When these laws are broken, there are serious repercussions. For instance, fines under the GDPR alone can reach 20 million euros, or 4% of your annual revenue (whichever is higher).

First-party data makes it simpler for businesses to adhere to requirements as users typically consent to the processing of their data when they proceed to browse websites and apps or make transactions.

How is First-Party Data Collected?

Most websites collect data on their users. Any data collected on their own website or app on a PC, mobile, tablet device is considered first-party data. In most cases, this data is collected via the use of cookies. These cookies are smartly designed pieces of code that collect information about each visiting user, such as the language the access the website, the device they use, their region, what OS they have installed, their phone number, IP address, etc.

While data regulations put certain obligations on organizations when collecting this data, any organization can continue to collect it as long as they have the users’ informed consent. This data can then be used to personalize a user’s experience on the site or the app and improve their experience.

Automate First Party Consent Preferences with Securiti Privacy Center

Making sure data responsibilities are properly carried out can be a time-consuming and labor-intensive task. Automation is, therefore, not only the most effective means to ensure first-party data consent but also the most efficient.

When it comes to offering autonomous business solutions for data privacy, security, governance, and compliance, Securiti has established itself as a revolutionary and a front-runner. Many renowned and reputable businesses rely on Securiti’s array of privacy-focused solutions to guarantee adherence to data regulations worldwide.

With Securiti’s Privacy Center, businesses can eliminate complexities and seamlessly automate all their key privacy functions, such as privacy notices, cookie management, consent preferences, Do Not Sell and Do Not Track signals, and individual privacy rights.

By automating first-party consent preferences, businesses can provide personalized preference experiences to their users and, thus, increase opt-in rates significantly.

Organizations of all sizes can capture and manage real-time consent activity by creating specialized ways to collect consent from various sources, such as websites, online forms, SaaS applications, and consent databases.

Sign up for a Free Trial now- no credit card is required.

Additionally, intuitive dashboards help visualize consent at the visitor and organizational levels for sheer transparency. Organizations can also record consent information from each location where data is collected, together with the timestamp, the policy, and the source.

The tool enables organizations to organize consent processes at a large scale and increase customer trust throughout the relationship. For a great user experience, rapidly capture queries, honor consent settings, and utilize a streamlined, guided approach to manage consent revocation and automatically preserve a consent compliance audit trail.

Request a demo today.

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