The digital marketing landscape is evolving at a very rapid pace. As businesses are trying to cope with growing consumer privacy concerns and increasing regulatory scrutiny by official bodies, it is getting more and more difficult to stay on the traditional third-party method of data collection. Furthermore, with Google making huge efforts to phase out third-party data in contemporary times, it would be an understatement to say that 2024 will be the year of first-party data!
There are not just privacy and scrutiny concerns involved with third-party data collection but it also lacks accuracy and utility. The marketing strategies based on this inaccurate data also turn out to be unfruitful in the long run. So why buy inaccurate third-party data when you can take feedback directly from your audience/customers?
First-party data collection means taking feedback and collecting insight directly from the consumers. This data is not only vivid and highly accurate as it directly translates consumers’ behaviour and needs but it also does not involve any privacy issues as the data is collected from consenting individuals. As per many marketing experts, first-party data is the next best thing in the world of marketing going into 2024, and businesses must evolve their strategies based on it if they want to stay ahead of the curve.
In this article, we are going to discuss why businesses should move on from third-party data to more accurate, precise, and useful first-party data going into 2024!
Third-Party Data – Why It’s Time to Say Goodbye
There are multiple reasons why third-party data collection is getting hard and why businesses should diverge from it. Here are some of them:
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Contents
- 1 Declining Confidence in Third-Party Data Practices
- 2 Increasing Regulations – The Impact of Privacy Laws
- 3 Increasing Use of Browsing Privacy Features and Ad-Blockers Among Users
- 4 Ongoing Industry Shift – Changing Attitudes of the Big Players
- 5 Improved Regulatory Compliance
- 6 Enhanced Data Reliability and Authenticity
- 7 Enhanced Privacy and Data Security
- 8 Enhanced Personalization and Better Customer Engagement
- 9 Long-Term Sustainability and A Competitive Edge
Declining Confidence in Third-Party Data Practices
Due to multiple scandals of data and privacy breaches over the last few years, today’s consumer have become highly aware of whom they should share their data with and whom they should not. Overall, there is a declining confidence in third-party data collection practices among users which puts a big question mark on the data’s accuracy and reliability.
Today, customers do not allow websites, apps, or platforms any kind of third-party access to their data because of a lack of trust and increasing privacy concerns. This not only makes third-party data collection extremely hard but also raises concerns about whether even the collected data, however less, is worth utilizing or not.
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Increasing Regulations – The Impact of Privacy Laws
Another reason why third-party data collection has become so hard is the increasing rules and regulations. Legislatures like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) provide detailed legal frameworks for the collection, storage, and utilization of data that has been collected from customers. These laws place primary significance on the privacy of users and ensure that their data is not misused.
However, these increasing rules and regulations create various hurdles and legal complexities for business and third-party data-collecting agencies. These hurdles and complexities ultimately make the whole data collection process extremely hard and even make the collected data questionable.
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Increasing Use of Browsing Privacy Features and Ad-Blockers Among Users
As users have become more aware of their privacy and data safety, web browsers have also introduced various privacy features. What’s interesting is that increasing demand and usage of these features have been seen in the last few years, stemming from privacy and data breach concerns as discussed earlier. Utilizing such privacy and internet security features, users secure their browsing to a great extent making the process of third-party data collection extremely difficult.
In addition to that, there is also an increasing trend in the use of Ad-Blockers and Anti-Trackers that make it even more difficult for businesses to collect data from their consumers through third-party means.
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Ongoing Industry Shift – Changing Attitudes of the Big Players
We are also currently seeing a huge industry shift where businesses are moving away from third-party data collection and towards first-party data collection in an attempt to regain the trust of their user base and to improve their marketing strategies with more accurate data. Big players like Google and Apple took the first steps in this regard and are still working to phase out third-party data.
For example, Apple introduced random emails for their users to sign up on apps and websites which greatly disrupted the whole scheme of third-party data collection. In addition to that, Google has also introduced various such features as well and the company even announced that they are planning to slowly phase out third-party data collection entirely from Chrome. With many more announcements from these as well as other tech giants expected this year, experts believe that third-party data may entirely die out by the end of 2024.
Evaluating the Risks of Third-Party Data – Rethinking Data Sourcing
Data sourcing is pivotal for businesses as it gives them an idea of their consumers’ moods, feedback, and demands. Considering the aforementioned reasons as well as the risks of third-party data, businesses are now rethinking their data sourcing strategies. These strategies are actually fundamental for businesses, especially established brands, as they design their entire marketing strategies based on the collected data.
Many businesses are shifting from third-party data sourcing towards other data collection strategies for all the reasons mentioned above. Let’s discuss the case of first-party data collection – a data collection strategy that is being called by experts as the next big thing in the field of marketing.
The Case for First-Party Data – Advantages and Opportunities for Businesses
First and foremost it is important to understand what exactly is first-party data sourcing. First-party data sourcing involves collecting feedback directly from active customers without the help of a third party. First-party data sourcing can be done through surveys, interactions on social media, engagements, purchase history, subscriptions, website visits, and activity on the website.
First-party data collection provides businesses with more accurate and immediate responses/data from their consumers which can be used to design highly effective and efficient marketing strategies. Here are some advantages and opportunities for businesses in first-party data sourcing strategy.
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Improved Regulatory Compliance
First-party data collection strategies allow businesses to deal with data protection and privacy regulations more comfortably. One of the primary reasons for this is that explicit consent is obtained from the consumers before collecting their data. For example, in case a business has designed a first-party data collection technique such as a survey form, customers’ full consent will be obtained before they can begin filling it.
In addition to that, first-person data collection strategies are highly transparent and simple which greatly reduces the risks of fines, penalties, or legal complexities.
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Enhanced Data Reliability and Authenticity
Data obtained from first-party data sourcing is highly reliable and authentic as it is obtained directly from the source (the consumers). Unlike third-party sourcing methods, there is very little chance of inaccuracies as the data directly depicts the consumer’s mood and feedback.
As the data is obtained firsthand in first-party data collection it most accurately depicts customer preferences, behaviours, and demographics, enabling more precise targeting and decision-making.
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Enhanced Privacy and Data Security
With events of data breaches and concerns about privacy on the rise, businesses must prioritize protecting their customers’ data. Organizations can exercise better control over the safety and privacy of customer details by focusing on first-party data collection techniques.
By maintaining and handling data internally, they can set in place strong security and privacy rules to prevent unwanted access, breaches and abuse. This increases consumer trust and confidence since customers are satisfied that their individual data is being handled carefully and securely.
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Enhanced Personalization and Better Customer Engagement
First-party data strategies enable companies to customize marketing campaigns and improve relationships with customers at a deeper level. Businesses can discover a lot about individual preferences, interests, and purchasing habits by monitoring direct interactions, transactions, and behaviours. This allows companies to adapt their messages, offers and experiences to their audience’s individual needs and preferences resulting in better relationships and higher levels of engagement, loyalty and support.
Platforms like Pipedrive and HubSpot CRM play an important part in this process by offering strong customer relationship management features. These technologies let businesses collect, organize and use first-party data at scale allowing for focused marketing campaigns, tailored communication and active customer relationship management.
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Long-Term Sustainability and A Competitive Edge
Businesses that embrace first-party data as a fundamental component of their data strategy are better positioned for long-term sustainability and an edge in the competitive landscape. Brands can prepare for the future by investing in comprehensive first-party data assets. This will not only improve their capacity to respond to changing market dynamics and customer preferences but it will also increase their competitive position
Conclusion
The international marketing landscape is moving from third-party data to first-party data collection strategies for a range of reasons. These primarily include the inaccuracy and unreliability of third-party data, increasing regulations, privacy concerns of users and the ongoing industry shift. On the other hand, first-party data collection provides a way for more accurate and direct data sourcing which offers many advantages and opportunities for businesses.
Stephen has been working with SEO and Digital Marketing since 1999 and has held a variety of senior roles in a wide range of companies both in the UK and Internationally.
