Marketers have long relied on third-party data for their data-driven marketing efforts. But the most successful data-driven marketers are using first-party data at a significantly higher rate than other marketers, according to a new report from Econsultancy and cross-channel marketing tech company Signal.
“Marketers are under pressure to provide more relevant customer experiences powered by insights from their users,” said Mike Sands, CEO, Signal. “This report highlights a sea change in the industry’s data landscape, as marketers increasingly turn to first-party data – data derived from their own customers – to fuel better personalisation, more precise targeting and improved marketing ROI.”
The survey of North American marketers found that among those who report the strongest ROI from their data-related investments, 81 per cent regularly use first-party data, compared to 71 per cent of their peers.
First-party data provides the richest, highest quality insights into consumer behaviour. It’s data that is collected and stored directly by website publishers about their customers. Marketers across the board are becoming more reliant on this valuable data source, with 82 per cent saying they plan to use more first-party data in their campaigns, and none reporting they will decrease their use of first-party data. In contrast, one in four marketers say they plan to decrease their use of third-party data, data collected by someone else who does not have a direct relationship with the consumer.
The study also sheds light on second-party data, e.g. data shared among trusted partners, as an effective but underutilized data source. Some 77 per cent of the highest-performing marketers regularly use second-party data, versus only 48 per cent of their counterparts. And 60 per cent of marketers plan to increase their use of second-party data, suggesting marketers are becoming more aware of the value in sharing their engagement data.
First-party data is marketers’ top choice for success across key metrics: 74 per cent said it gives the greatest insight into customers, 64 per cent said it offers the highest increase to customer lifetime value, and 62 per cent said it provides the highest lift among data sources. Less than 10 per cent of marketers surveyed reported the same benefits from third-party data.
Not only do companies with the most profitable data-driven initiatives prefer first-party data, they also report stronger capabilities in important data-related practices. For example, 66 per cent excel at campaign targeting and analysis, 60 per cent have strong personalisation capabilities, and 59 per cent are more successful at attribution and audience segmentation.
The report found striking differences in how high-performing marketers manage their data-driven efforts versus their peers. They have adapted to the explosion of new devices and channels by collecting data from beyond the web: 60 per cent collect data from mobile applications, versus 41 per cent of their peers; 61 per cent collect data from email/SMS, versus 47 per cent; and 23 per cent collect data from beacons, versus 8 per cent.