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What Is First-Party Data And How Do You Use It?

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9 months ago

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What Is First-Party Data And How Do You Use It?

First-party data has been the talk of the marketing industry for years now.

With ever-tightening user data privacy laws and regulations, it’s imperative that marketers embrace a world with little-to-no data cookies.

We have to get more creative on how to legally, and ethically, capture customer information.

Not sure what first-party data is? Or not quite sure where to start with a first-party data marketing strategy?

Follow along to understand what first-party data is, how it differs from other data types, and how to apply it to your own business.

What Is First-Party Data?

First-party data is information or data points a company collects from its customers.

This type of data is collected through the business’ owned digital channels, with the consent given by the users to have their data collected.

Compared to second-party and third-party data, first-party data is usually considered the most reliable because it comes directly from the customer.

First-Party Data, Second-Party Data, And Third-Party Data Explained

Let’s dive in further between the three data types, how data is collected, and when and where to use them.

First-Party Data Explained

First-party data is any data point collected by a business directly from users or customers.

There are many ways first-party data can be collected from an audience. Some examples include:

  • Website or app analytics. Typically, this information is gathered from user interactions on a website or in an app. Data points can include demographics, location, page views, clicks, purchases, or time on site.
  • Email marketing lists. Subscriber data from email campaigns, newsletters, or additional email interactions.
  • Customer relationship management (CRM) systems. Data housed within a company’s CRM system, usually after a customer purchases. It usually stores customer profile information, purchase history, customer service interactions, and more.
  • Social media accounts. Data collected from social media profiles and interactions with a company through their social media accounts.
  • Surveys. Responses from customers, which can include data points like demographics, email, contact information, and more.
  • Customer feedback. This type of feedback can be collected through multiple channels, such as website online chat or product reviews, just to name a few.

In order to collect first-party data, a user has to consent to their data being collected.

Typically, companies put a tracking pixel on their website or app. Upon a customer’s first visit to one of those, they are usually served some sort of banner or pop-up asking them to consent to track behavior.

If a user consents and accepts, numerous data points (like the above described) are gathered and stored in a CRM system.

Companies primarily use first-party data for personalized marketing efforts and improving customer experiences.

Additionally, it helps businesses make more informed decisions from the data by analyzing the behavior of their actual customers.

Second-Party Data Explained

Second-party data is sometimes confused with third-party data.

Simply put, think of second-party data as “secondhand” data. It is data that a company didn’t collect itself but shared directly from one company to another.

What makes this different than third-party data is that it’s not sold or purchased from another company.

Usually, the data is shared as part of a partnership or mutually beneficial agreement between two companies.

Below are a few examples of how second-party data can be used in practice.

  • A travel agent partners with certain airlines, hotels, or car rental companies to gain access to their booking and reservation data. This then can allow a travel agency to provide personalized packages, discounts, and recommendations to customers.
  • A health and wellness app collaborates with a wearables device company (i.e., smartwatch). The app can collect wearable data points from a user, such as heart rate, step counts, and sleep patterns. The wellness app uses that data to provide personalized insights and recommendations to a customer.
  • An educational technology company wants to partner with schools or universities to gather data on student academic performance and learning. The technology company then uses this data to inform future educational content to improve student learning.

Second-party data is primarily used to expand datasets on a company’s first-party data set.

This type of data sharing allows companies to gain data from trusted partners to get a better, more comprehensive view of their target audience without having to go through the heavy lifting of collecting the data themselves.

Third-Party Data Explained

Third-party data is data collected by an external source, which is then sold to businesses for various reasons.

The biggest difference between third-party and first/second-party data is that there is no true connection to the customer.

Additionally, because third-party data is purchased in large quantities, the data is aggregated and anonymized to meet privacy regulations.

Third-party data can come from a variety of sources, including information from:

  • Public records.
  • Government agencies.
  • Online activities or website cookies.
  • Social media accounts or profiles.

There are both benefits and drawbacks to third-party data.

One of the main benefits of third-party data is that it’s relatively easy to buy large data sets of demographic or behavioral information on your target audience.

Perhaps the biggest downfall of third-party data is the reliability or accuracy of the data purchased.

A few examples of third-party data used in practice include:

  • A real estate company gets third-party data from public records, including information on property values, property characteristics, and more. This helps the real estate company with property appraisals, market analysis, and how to better market real estate listings.
  • An online retailer wants to cross-sell or upsell additional products to its customers, so it purchases third-party data to analyze customer purchase behavior to help predict relevant cross-selling opportunities on its website.
  • Pharmaceutical companies may purchase third-party data on prescription medication usage in order to align their marketing efforts with existing healthcare trends.

Compared to first-party data, it’s considered less reliable as it’s not information coming directly from your customers.

Third-party data is primarily used by companies to complement first-party data. It’s not practical to rely solely on third-party data for marketing efforts.

Using third-party data to analyze trends and behavior in your greater target audience is a better way to leverage large data sets.

What Are The Limitations Of First-Party Data?

While first-party data is considered the most reliable and accurate for businesses, it does come with some pitfalls and limitations.

Below are a few drawbacks to first-party data collection.

  • Limited scale. Since first-party data is limited to the information a customer provides, or the interactions a company has with its users, data sets can be limited by size. Especially for newer businesses or niche companies, it may be difficult to gain statistical significance or be able to reach a wider audience at scale.
  • Sampling diversity concerns. Similar to the above, with limited scale, a company could run into a low sampling diversity when analyzing data. It could lead to skewed customer demographic insights and may not accurately reflect a wider target market.
  • Data privacy concerns. All companies, regardless of how they’re collecting first-party data, need to stay up-to-date on user data privacy regulations at all times. This takes time and employee resources to ensure compliance is reached.
  • Data decay. This is referred to when customer profile information becomes outdated. Examples of this can include if a customer moves, changes their phone number or email address, and can lead to inaccurate customer profiles.
  • Resource intensive. Gathering and collecting first-party data takes time. It’s not a “one-and-done” task. First-party data requires a level of maintaining after its collected, whether that comes from investing in technology, data analysis, and/or maintaining accurate customer information over time.

Don’t let these limitations scare you away from using first-party data to its full potential.

Next, we’ll dive into different ways to make your data work harder, and smarter, for your business.

How To Use First-Party Data

You’ve spent all this time collecting and organizing first-party data for your business.

So, what’s the best way to use it?

Believe it or not, there’s a lot more you can use first-party data for than marketing campaigns.

Below are five examples of ways to use first-party data more holistically for your business.

1. Expand And Optimize Marketing Campaign Targeting

If you’re looking to expand your marketing efforts to a wider audience but are unsure where to start, start with your first-party data.

If large enough, first-party customer lists can be turned into lookalike audiences in advertising platforms to help reach a broader audience with similar characteristics as your current customers.

For existing campaign optimization, try segmenting customer groups by certain characteristics.

Smaller, custom segments allow for more accurate and personalized messaging to those users, which can help increase conversion rates, customer loyalty, and more.

2. Encourage Customer Loyalty

Most customers like to feel rewarded by repeated loyalty to a brand. This could come in the form of a specific loyalty program, special discounts or sales, or birthday recognition gifts.

Using first-party data that captures purchase history and personal information like date of birth and turning it into special incentives can help retain valuable customers longer.

3. Prioritize Product Improvements

This is an often overlooked way to utilize first-party data because it comes back down to the company and product itself.

Taking the time to review customer feedback and survey responses helps identify customer pain points, opinions, and what they love.

Capturing these data points on a regular basis can help companies pivot to take action quicker on customer pain points and prioritize product development efforts to improve customer satisfaction.

4. Optimize Content Strategy

First-party data is also helpful for content optimization strategies.

Gathering information such as customer engagement metrics can inform what topics or categories users resonate with most.

Shifting ad, social, or website content to what resonates with customers can help better attract users quicker, which can then help lead to more customers.

As with all content development, keep in mind to ensure brand voice and tone are consistent and authentic across all channels.

5. Predictive Analytics For Data-driven Decisions

If you have a large set of first-party data, it can be used to build predictive models to forecast customer behavior, future sales and revenue, churn rates, and more.

Using this information strategically guides better decisions made directly from your data.

Predictive modeling also lends a hand at outlining a typical customer’s journey, which helps identify steps and interactions a user takes before purchasing.

Do We Need To Consider Zero-Party Data For The Future?

Third-party cookie deprecation has been on the docket for a while now.

As of October 2023, Google announced it will disable third-party cookies for 1% of Chrome users starting in Q1 2024.

While that may not sound like a lot, the start of disabling cookies means marketers need to be proactive in 2024 about a zero-party data strategy in the future.

Zero-party data is considered data given to a company directly from the users themselves.

The data is willingly shared with a company through outlets such as:

  • Surveys.
  • Forms.
  • Direct interactions with a business.

Examples of zero-party data are similar to first-party data and can include:

  • Personalization data.
  • Purchase intent.
  • User account data.
  • Feedback and reviews.
  • Survey responses.

Integrating a zero-party data strategy benefits businesses because it can take personalized marketing and customer experiences to the next level.

To start gathering zero-party data, it may be worthwhile to incentivize users to provide their valuable information – also known as a value exchange.

A user provides a company with their personal information in return for something of value to the customer, such as a product discount.

Ultimately, zero-party data helps build customer trust, increases user engagement, and drives higher conversion rates and repeat customers.

When integrating any type of data strategy, always be sure to keep user privacy and consent at the forefront of your mind.

Not only is it ethical, but it’s becoming a legal requirement in almost all regions.

More resources: 

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WordPress Insiders Discuss WordPress Stagnation

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7 hours ago

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August 31, 2024

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WordPress Insiders Discuss WordPress Stagnation

A recent webinar featuring WordPress executives from Automattic and Elementor, along with developers and Joost de Valk, discussed the stagnation in WordPress growth, exploring the causes and potential solutions.

Stagnation Was The Webinar Topic

The webinar, “Is WordPress’ Market share Declining? And What Should Product Businesses Do About it?” was a frank discussion about what can be done to increase the market share of new users that are choosing a web publishing platform.

Yet something that came up is that there are some areas that WordPress is doing exceptionally well so it’s not all doom and gloom. As will be seen later on, the fact that the WordPress core isn’t progressing in terms of specific technological adoption isn’t necessarily a sign that WordPress is falling behind, it’s actually a feature.

Yet there is a stagnation as mentioned at the 17:07 minute mark:

“…Basically you’re saying it’s not necessarily declining, but it’s not increasing and the energy is lagging. “

The response to the above statement acknowledged that while there are areas of growth like in the education and government sectors, the rest was “up for grabs.”

Joost de Valk spoke directly and unambiguously acknowledged the stagnation at the 18:09 minute mark:

“I agree with Noel. I think it’s stagnant.”

That said, Joost also saw opportunities with ecommerce, with the performance of WooCommerce. WooCommerce, by the way, outperformed WordPress as a whole with a 6.80% year over year growth rate, so there’s a good reason that Joost was optimistic of the ecommerce sector.

A general sense that WordPress was entering a stall however was not in dispute, as shown in remarks at the 31:45 minute mark:

“… the WordPress product market share is not decreasing, but it is stagnating…”

Facing Reality Is Productive

Humans have two ways to deal with a problem:

  1. Acknowledge the problem and seek solutions
  2. Pretend it’s not there and proceed as if everything is okay

WordPress is a publishing platform that’s loved around the world and has literally created countless jobs, careers, powered online commerce as well as helped establish new industries in developing applications that extend WordPress.

Many people have a stake in WordPress’ continued survival so any talk about WordPress entering a stall and descent phase like an airplane that reached the maximum altitude is frightening and some people would prefer to shout it down to make it go away.

Acknowledging facts and not brushing them aside is what this webinar achieved as a step toward identifying solutions. Everyone in the discussion has a stake in the continued growth of WordPress and their goal was to put it out there for the community to also get involved.

The live webinar featured:

  • Miriam Schwab, Elementor’s Head of WP Relations
  • Rich Tabor, Automattic Product Manager
  • Joost de Valk, founder of Yoast SEO
  • Co-hosts Matt Cromwell and Amber Hinds, both members of the WordPress developer community moderated the discussion.

WordPress Market Share Stagnation

The webinar acknowledged that WordPress market share, the percentage of websites online that use WordPress, was stagnating. Stagnation is a state at which something is neither moving forward nor backwards, it is simply stuck at an in between point. And that’s what was openly acknowledged and the main point of the discussion was understanding the reasons why and what could be done about it.

Statistics gathered by the HTTPArchive and published on Joost de Valk’s blog show that WordPress experienced a year over year growth of 1.85%, having spent the year growing and contracting its market share. For example, over the latest month over month period the market share dropped by -0.28%.

Crowing about the WordPress 1.85% growth rate as evidence that everything is fine is to ignore that a large percentage of new businesses and websites coming online are increasingly going to other platforms, with year over year growth rates of other platforms outpacing the rate of growth of WordPress.

Out of the top 10 Content Management Systems, only six experienced year over year (YoY) growth.

CMS YoY Growth

  1. Webflow: 25.00%
  2. Shopify: 15.61%
  3. Wix: 10.71%
  4. Squarespace: 9.04%
  5. Duda: 8.89%
  6. WordPress: 1.85%

Why Stagnation Is A Problem

An important point made in the webinar is that stagnation can have a negative trickle-down effect on the business ecosystem by reducing growth opportunities and customer acquisition. If fewer of the new businesses coming online are opting in for WordPress are clients that will never come looking for a theme, plugin, development or SEO service.

It was noted at the 4:18 minute mark by Joost de Valk:

“…when you’re investing and when you’re building a product in the WordPress space, the market share or whether WordPress is growing or not has a deep impact on how easy it is to well to get people to, to buy the software that you want to sell them.”

Perception Of Innovation

One of the potential reasons for the struggle to achieve significant growth is the perception of a lack of innovation, pointed out at the 16:51 minute mark that there’s still no integration with popular technologies like Next JS, an open-source web development platform that is optimized for fast rollout of scalable and search-friendly websites.

It was observed at the 16:51 minute mark:

“…and still today we have no integration with next JS or anything like that…”

Someone else agreed but also expressed at the 41:52 minute mark, that the lack of innovation in the WordPress core can also be seen as a deliberate effort to make WordPress extensible so that if users find a gap a developer can step in and make a plugin to make WordPress be whatever users and developers want it to be.

“It’s not trying to be everything for everyone because it’s extensible. So if WordPress has a… let’s say a weakness for a particular segment or could be doing better in some way. Then you can come along and develop a plug in for it and that is one of the beautiful things about WordPress.”

Is Improved Marketing A Solution

One of the things that was identified as an area of improvement is marketing. They didn’t say it would solve all problems. It was simply noted that competitors are actively advertising and promoting but WordPress is by comparison not really proactively there. I think to extend that idea, which wasn’t expressed in the webinar, is to consider that if WordPress isn’t out there putting out a positive marketing message then the only thing consumers might be exposed to is the daily news of another vulnerability.

Someone commented in the 16:21 minute mark:

“I’m missing the excitement of WordPress and I’m not feeling that in the market. …I think a lot of that is around the product marketing and how we repackage WordPress for certain verticals because this one-size-fits-all means that in every single vertical we’re being displaced by campaigns that have paid or, you know, have received a a certain amount of funding and can go after us, right?”

This idea of marketing being a shortcoming of WordPress was raised earlier in the webinar at the 18:27 minute mark where it was acknowledged that growth was in some respects driven by the WordPress ecosystem with associated products like Elementor driving the growth in adoption of WordPress by new businesses.

They said:

“…the only logical conclusion is that the fact that marketing of WordPress itself is has actually always been a pain point, is now starting to actually hurt us.”

Future Of WordPress

This webinar is important because it features the voices of people who are actively involved at every level of WordPress, from development, marketing, accessibility, WordPress security, to plugin development. These are insiders with a deep interest in the continued evolution of WordPress as a viable platform for getting online.

The fact that they’re talking about the stagnation of WordPress should be of concern to everybody and that they are talking about solutions shows that the WordPress community is not in denial but is directly confronting situations, which is how a thriving ecosystem should be responding.

Watch the webinar:

Is WordPress’ Market share Declining? And What Should Product Businesses Do About it?

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Google’s New Support For AVIF Images May Boost SEO

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August 31, 2024

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Google's New Support For AVIF Images May Boost SEO

Google announced that images in the AVIF file format will now be eligible to be shown in Google Search and Google Images, including all platforms that surface Google Search data. AVIF will dramatically lower image sizes and improve Core Web Vitals scores, particularly Largest Contentful Paint.

How AVIF Can Improve SEO

Getting pages crawled and indexed are the first step of effective SEO. Anything that lowers file size and speeds up web page rendering will help search crawlers get to the content faster and improve the amount of pages crawled.

Google’s crawl budget documentation recommends increasing the speeds of page loading and rendering as a way to avoid receiving “Hostload exceeded” warnings.

It also says that faster loading times enables Googlebot to crawl more pages:

Improve your site’s crawl efficiency

Increase your page loading speed
Google’s crawling is limited by bandwidth, time, and availability of Googlebot instances. If your server responds to requests quicker, we might be able to crawl more pages on your site.

What Is AVIF?

AVIF (AVI Image File Format) is a next generation open source image file format that combines the best of JPEG, PNG, and GIF image file formats but in a more compressed format for smaller image files (by 50% for JPEG format).

AVIF supports transparency like PNG and photographic images like JPEG does but does but with a higher level of dynamic range, deeper blacks, and better compression (meaning smaller file sizes). AVIF even supports animation like GIF does.

AVIF Versus WebP

AVIF is generally a better file format than WebP in terms of smaller files size (compression) and image quality.  WebP is better for lossless images, where maintaining high quality regardless of file size is more important. But for everyday web usage, AVIF is the better choice.

See also: 12 Important Image SEO Tips You Need To Know

Is AVIF Supported?

AVIF is currently supported by Chrome, Edge, Firefox, Opera, and Safari browsers. Not all content management systems support AVIF. However, both WordPress and Joomla support AVIF. In terms of CDN, Cloudflare also already supports AVIF.

I couldn’t at this time ascertain whether Bing supports AVIF files and will update this article once I find out.

Current website usage of AVIF stands at 0.2% but now that it’s available to surfaced in Google Search, expect that percentage to grow. AVIF images will probably become a standard image format because of its high compression will help sites perform far better than they currently do with JPEG and PNG formats.

Research conducted in July 2024 by Joost de Valk (founder of Yoast, ) discovered that social media platforms don’t all support AVIF files. He found that LinkedIn, Mastodon, Slack, and Twitter/X do not currently support AVIF but that Facebook, Pinterest, Threads and WhatsApp do support it.

AVIF Images Are Automatically Indexable By Google

According to Google’s announcement there is nothing special that needs to be done to make AVIF image files indexable.

“Over the recent years, AVIF has become one of the most commonly used image formats on the web. We’re happy to announce that AVIF is now a supported file type in Google Search, for Google Images as well as any place that uses images in Google Search. You don’t need to do anything special to have your AVIF files indexed by Google.”

Read Google’s announcement:

Supporting AVIF in Google Search

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CMOs Called Out For Reliance On AI Content For SEO

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2 days ago

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August 30, 2024

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CMOs Called Out For Reliance On AI Content For SEO

Eli Schwartz, Author of Product-Led SEO, started a discussion on LinkedIn about there being too many CMOs (Chief Marketing Officers) who believe that AI written content is an SEO strategy. He predicted that there will be reckoning on the way after their strategies end in failure.

This is what Eli had to say:

“Too many CMOs think that AI-written content is an SEO strategy that will replace actual SEO.

This mistake is going to lead to an explosion in demand for SEO strategists to help them fix their traffic when they find out they might have been wrong.”

Everyone in the discussion, which received 54 comments, strongly agreed with Eli, except for one guy.

What Is Google’s Policy On AI Generated Content?

Google’s policy hasn’t changed although they did update their guidance and spam policies on March 5, 2024 at the same time as the rollout of the March 2024 Core Algorithm Update. Many publishers who used AI to create content subsequently reported losing rankings.

Yet it’s not said that using AI is enough to merit poor rankings, it’s content that is created for ranking purposes.

Google wrote these guidelines specifically for autogenerated content, including AI generated content (Wayback machine copy dated March 6, 2024)

“Our long-standing spam policy has been that use of automation, including generative AI, is spam if the primary purpose is manipulating ranking in Search results. The updated policy is in the same spirit of our previous policy and based on the same principle. It’s been expanded to account for more sophisticated scaled content creation methods where it isn’t always clear whether low quality content was created purely through automation.

Our new policy is meant to help people focus more clearly on the idea that producing content at scale is abusive if done for the purpose of manipulating search rankings and that this applies whether automation or humans are involved.”

Many in Eli’s discussion were in agreement that reliance on AI by some organizations may come to haunt them, except for that one guy in the discussion

Read the discussion on LinkedIn:

Too many CMOs think that AI-written content is an SEO strategy that will replace actual SEO

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