The data landscape is, if anything, one of continuous change. Some changes, like regulatory measures such as GDPR and CCPA, are seismic in nature, while others, like evolving user preferences and expectations of site speed, are more subtle. The end result is the same: modern enterprises must take a good, long look at their data collection strategy.

Data is sometimes referred to as the new oil – and like fossil fuels, it powers industries both great and small. E-commerce and retail media players use customer data to personalize experiences through real-time streaming, creating hyper-tailored, geo-specific ads. SaaS vendors fine-tune their onboarding and application experiences based on past behaviors and demographic predictors of future actions. The data ecosystem, while undoubtedly rich and full of potential, is also changing to meet modern challenges such as training AI/ML models to be unbiased and addressing the phasing out of third-party cookies.

If data is the new oil, then the “drilling” methods of data collection are just as important for keeping data pure, filtered, and, above all, highly usable. For an industry going through seismic shifts and looking for steady ground, we’re making the case that first-party data collection is the way to future-proof your data strategy.

This post will be a deep dive into the world of first-party data and how to prepare for the coming data resource boom.

What is First-Party Data?

First-party data is data that you collect directly from your customer, whether through online sources, e-commerce shopping experiences, in-app interactions, or visits to brick-and-mortar locations. With first-party data, you control the data collected, can verify its authenticity, and ensure it complies with data and privacy laws.

The value of this data is high because of its veracity—you collect it, you know precisely what those data signals mean (or have analysts who can help), and you can map it directly to your customer experience. First-party data collection is an essential part of this story. How you collect the data adds to its value, especially when we talk about things like consent and compliance.

Not all first-party data is created equal. First-party data collected without consent is still a no-no in a world where privacy regulations like GDPR and CCPA reign supreme. Whether user data is collected directly from properties you own or not is immaterial; it is required that all data collected from users have their explicit consent. We’ll go deeper into this later, but there’s an important movement in the world of first-party data to enforce compliance at the moment of data collection. In effect, consent itself is the first key data point in your data's lifecycle.

Comparing First, Second, and Third-Party Data

The three main types of data are first, second and third-party data. Each one can offer the same information about customers but vary in terms of data sources, the verifiable accuracy, and ownership of the data. 

Let's break it down with a comparison chart to fully understand this.

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The Benefits of First-Party Data

For data-driven organizations, the value of first-party data is hard to overstate.Data collected directly from your customers with their consent gives your organization a wealth of highly usable, valuable information. If you're considering tuning up your first-party data collection strategy, consider these benefits to help strengthen your case:

• Higher Data Quality and Accuracy
• Full Control and Ownership
• Compliance and Privacy Advantages
• Improved Customer Experience
• Cost-Effective
• Future-Proofing Against Privacy Changes
• Enhanced Segmentation and Targeting
• Better Data Governance and Security

Higher Data Quality and Accuracy

The data collection mechanism ensures that first-party data is inherently of high quality and accuracy. It's not to say that first-party data is infallible and that all collection methods are created equal (they are not) but that, as a general rule, you can bank on first-party data being of good quality. This is because you’re collecting data directly from your customers and can ascribe meaning to those interactions. Website interactions with call-to-action buttons, forms, or e-commerce checkout pages all carry meaning and can be used to enhance your understanding of your customers.

Full Control and Ownership

First-party data is data you have full control and ownership over, assuming you've obtained and continue to respect consent. This means you can control how you collect, store, and use that data without relying on an intermediary party. Not only does this allow you to make greater use of the data—for example, integrating it with your CDP—but it also enhances your data governance strategy.

Compliance and Privacy Advantages

Regulations like GDPR and CCPA clearly outline legal requirements for collecting and using customers' data, primarily in the form of explicit consent. In an ideal world, first-party data is collected with a tool like MetaRouter, which helps enforce consent at the moment of data collection and allows for safe use of data in alignment with your data governance strategy. First-party data dramatically reduces the surface area for potential exposure to legal issues related to privacy violations.

Improved Customer Experience

Consumers want personalized experiences – 91% of consumers say they are more likely to shop with brands that provide personalized recommendations. First-party data is the key that unlocks real-time personalization. Understanding what your customers want requires clear, accurate data that paints the picture of your customer in a light they want to be seen. The customer journey isn’t a shot in the dark; it’s illuminated by data points that guide their path to a better customer experience.

Cost-Effective

First-party data is inherently cost-effective because the data collection mechanisms are all based on properties which you own: be it your website, mobile app, or e-commerce store. Rather than buying third-party data from a vendor, you can build up a high value dataset based on digital and real-world interactions. There is no shortage of tools to measure both online and offline interactions, and combining those tools with MetaRouter is a cost-effective way to future-proof your data pipeline.

Future-Proofing Against Privacy Changes

The phasing out of third-party cookies in many browsers and the continued trend of tightening privacy regulations provides a clear message to modern enterprises: first-party data is the best path forward. The privacy landscape is evolving but it's clear that ethically-obtained, consent-compliant data will remain valuable. It's data you control and that will help you future-proof your data strategy.

Enhanced Segmentation and Targeting

The data signals required to build an effective segmentation and targeting strategy start with first-party data. The data collected has more meaning because it’s a direct interaction between your customers and your brand’s online and offline properties. This nuanced approach to data collection and segmentation means you can build a reliable dataset to base segmentation strategies off of.

Better Data Governance and Security

Companies can enforce more secure and compliant data practices by maintaining first-party data in-house. This aligns with best practices for data governance allowing for full control and transparency of data throughout its lifecycle. You control how consent is obtained, can enforce security protocols like encryption and safe handling of data, and how that data is used. Data governance strategies are key components of future-proofing your data strategy.

How First-Party Data is Collected

If first-party data is the result of the direct interactions between your customer and your brand, then how do you collect that data? This is the billion dollar question (and a billion dollar industry). How you collect first-party data depends greatly on "where" your customers are interacting with your brand. Typical collection sources include:

• Website interactions: By tracking user behavior on websites such as clicks, form submissions, time spent on pages, and checkout processes.
• Mobile App Engagement: Data from in-app interactions include app usage patterns, time spent using features, and in-app purchases.
• Customer Relationship Management (CRM) Systems: Your CRM platform includes purchase history, service requests, and interactions with your sales and support teams.
• Email Marketing and Marketing Automation Platforms: Interactions such as email opens, clicks, and engagement with content are also valuable data points.
• In-Person or Brick-and-Mortar Interactions: Customer interactions at physical locations provide valuable data on consumer behavior such as recent purchases.

Tools and Platforms for First-Party Data Collection

From website and mobile app interactions to in-person engagement, the potential for collecting a rich trove of first-party data is clear. The "how" of data collection can be achieved through many point solutions–for example, Google Analytics 4 for website data, Braze for customer engagement–however this may oversimplify the process.

The true pinnacle of first-party data collection is not just collecting data but assembling that data into a single-source of truth that is usable for your entire organization. Two important tools play a key role here: Customer Data Infrastructure (CDI) Platforms and Customer Data Platforms (CDPs).

The Role of CDIs in First-Party Data Collection

With data coming in from a diverse and unique set of sources, there's a lot of opportunity for that data to get tangled together in a confusing web. What's needed is a robust set of internal data pipelines that deliver data to the right locations for analysis, normalization, and further distribution. For example, data collected on your website may be used for programmatic advertising through personalized marketing campaigns. This is great, but without a clear pipeline from one system to the next, it’s possible to create a jumbled data picture that results in subpar messaging and performance.

CDIs act as a data pipeline for your various first-party data endpoints: your website, mobile app, CRM, email system, and even physical locations. Using a CDI you standardize data collection at the origin of those customer interactions and then distribute that information to the requisite systems. For example, instead of collecting data using a single point solution, you collect that data using your CDI and then distribute that data as needed to various endpoints. Your website interactions can then be sent to your web analytics tools, marketing automation platform, and advertising partners.

CDIs like MetaRouter have another built-in advantage: they eliminate the reliance on third-party tags to collect data. This lessens the impact of ad blockers and browser restrictions by using a first-party tracking solution to collect data. You no longer need to load scripts from 3rd parties, which browsers increasingly view suspiciously, and can use, in effect, your own script to track data. 

In the era of privacy and data protection regulations like GDPR and CCPA, CDIs also allow you to directly build consent enforcement into your data collection mechanisms. Users provide consent for tracking and the CDI respects this by only distributing data to approved vendors. Because you don't have any 3rd party code on your website that may be inadvertently tracking user behavior, you greatly decrease the risk of committing a privacy violation. 

The Role of CDPs in First-Party Data Collection

If CDIs are the data pipelines for your organization, then CDPs are the central repository for your customer data. CDPs provide a unified database for your customer data, allowing you to create a single source of truth for your organization. CDIs deliver data to your CDP from various endpoints and sources, allowing you to create a truly unified customer profile.

CDPs are the backbone of distributing the first-party data you collect across various systems. Acting as a central hub, CDPs keep all of your various systems aligned and working off of a common dataset. This ensures that the data you have in your CRM is in line with your marketing automation platform, ecommerce system, and offline data systems. CDIs collect the data and distribute it; CDPs store it and keep other systems in check.

CDPs are an integral part of the modern marketing toolkit, specifically by enabling true cross-channel activation. Customer behavior, collected through first-party data mechanisms, can be used to trigger campaigns and messaging across platforms. For example, interactions on an e-commerce website like an abandoned cart can then be used to trigger real-time advertising to that customer. CDPs provide integration capabilities that enable marketers to fully utilize the customer data. 

When it comes to data governance and compliance, CDPs and CDIs play equally important but different roles. CDIs enforce compliance at the moment of collection, ensuring that the data distributed to your CDP and other systems is compliant and usable from the get-go. CDPs ensure compliance data is shared and enforced across all systems, and that it is managed uniformly across all those systems. Together, CDIs and CDPs are a fantastic solution to concerns about data privacy and compliance. 

Why First-Party Data is Essential for Modern Enterprises

The value of first-party data cannot be overstated. From the challenges of collecting digital data with the rise of ad blockers and browser restrictions to increasingly strict privacy and data protection regulations like GDPR and CCPA, first-party data is perhaps the only future-proofed method of building your data engine. It’s data you own, can prove the chain of custody to meet compliance standards, and is full of rich insights about real-world interactions your customers have had with your brand.

First-party data is at the heart of providing better, more personalized customer experiences. Not only do customers want tailored experiences, they want to trust that brands will safely and responsibly handle data they provide your organization. Respecting privacy while getting rich insights is a win-win in the modern data landscape.

CDI tools like MetaRouter play a critical role in this data ecosystem. MetaRouter helps you to maximize the value of first-party data by standardizing data collection and enforcing compliance as part of your data collection process. Once collected, MetaRouter distributes data to modern systems like CDPs to allow you to fully utilize your data to improve your marketing and customer experience.

Take the next step in future-proofing your data strategy by considering how MetaRouter can help you collect, manage, and activate first-party data in ways that benefit both your business and your customers. Reach out today to learn more about how MetaRouter can support your organization in building a stronger, more compliant data infrastructure.