As a data-driven ad agency, we understand that knowing information about your audience is essential to keeping them happy. In the modern world, we do this via data collection through our in-house team. You can garner this information through a variety of means, but as with most things in life, not all data is created equally. First-party data is information that you collect in-house, but third-party data is assembled by other companies. While both can benefit your business, there’s an undeniable advantage to keeping your data in-house.
Benefits of First-Party Over Third-Party Data Collection
It’s important to note that not all data collected by other companies is considered third-party. Third-party data is pre-packaged information gathered from general consumers. This isn’t data that comes from your audience. By collecting data on your own or contracting a company that focuses on your customers, you can more effectively communicate with prospects.
When it comes down to it, keeping your data in-house is better than third-party collection in every way. Here are just some of the benefits you’ll see by opting for first-party data.
Cost Savings
Instead of having to buy a new dataset every time something changes in the market, you’ll have constant access to your own real-time information.
Improved Data Collection
You have no control over how third-party data is collected. If this is handled in-house, however, you can identify flaws as they occur. This makes it easier to adjust collection strategies.
Lack of Reliability
Unfortunately, there’s no guarantee that proper third-party collection methods are being used. The data could be completely unreliable, and if you use it to create business strategies, you’re not going to see good results.
Advantage Over Competitors
Always remember that third-party data is available to anyone who wants to purchase it. You could be creating your strategy with the same information used by your competitors. First-party data means you’re connecting to your target audience.
Creating an Effective Data Strategy
Creating an effective first-party data strategy can be tedious. This is why so many companies settle for less. Even with that being the case, at least two-thirds of marketers agree that first-party data allows businesses to better understand and communicate with audiences. With that in mind, here are some of the most effective tools to building a data strategy.
Have a Team in Place
Collecting data can’t be an afterthought. It’s an active process that must continually be monitored and updated. This makes it necessary to have a team focused solely on data collection. This can be in-house or outsourced.
Build a Framework
Before data collection begins, it’s essential that a framework be put into place. Start by identifying your prime marketing objectives. Once these are pinpointed, a framework that includes which data should be targeted can be created.
Ensure Full Data Collection
Knowing which data to collect involves more than just, “They looked at that page.” Data must be structured in a format so it’s representative of the information you’re trying to understand. This includes metadata that can be used to improve collection methods.
Package Data so it’s Reusable
Data collection once involved collecting and storing information via one app. This seemingly made things easier, but when it needed to be extracted for use in another app, a developer was needed. You should avoid this altogether.
While there are countless steps and methods to an effective data strategy, this framework will set you in the right direction.
How to Avoid Being Intrusive
Personalized data collection is necessary to better communicate with your audience. In fact, it’s become expected by consumers. At what point, though, does “personalized” become “intrusive”?
Recent data breaches have made people more careful about what they share, and some companies have even violated laws through the information they gather. You can avoid these mistakes with the following knowledge.
Contact Information is Fine
People elect to give companies their contact information. This helps to better communicate with consumers individually. While asking for phone numbers could be intrusive, it’s really dependent on the offered service.
Use Appropriate Retargeting
Consumers often find retargeted ads intrusive, but this can be avoided by making banners dynamic and interactive. You should also identify the appropriate time frame to send an ad. This can vary by industry.
User Data Experience is Fine
It’s okay to collect data about how your customers are using your products and services. This allows you to determine what’s working and what’s not.
Don’t Abuse Trust
There’s no single solution for how much data is too much. The answer will vary depending on what you’re providing. The main point, however, is to not abuse the trust given to you by customers. This is a quick way to send them to the competition.
Why Do We Need Data Anyway?
For those on the fence about data collection, it’s important to understand that it’s all about better meeting your customers’ needs. Data helps you personalize marketing messages, and since over half of consumers anticipate a personalized discount within 24 hours of sharing their data, it’s important to not let your audience down.
Even outside of customer expectations, data-driven marketing simply works. When looking at revenue goals in 2017, 83% of organizations that exceeded their goals were using personalized marketing through collected data. There’s no denying that data will make or break companies today. The only question is how many firms will notice this in time.
First-Party Data is Essential
In the current business environment, choosing to not collect data simply isn’t an option. You can rest assured that your competitors are gathering as much information on consumers as possible, and if you’re not keeping up, it becomes impossible to succeed in any industry. Fortunately, your competition could very well be collecting data in an ineffective manner. As long as you opt for first-party data rather than third-party, you can excel where they’re dropping the ball.
