Draft:First-party data

First-party data is information collected directly by an organisation from its own audience, such as customers, website visitors, or social media followers. This type of data includes user behaviour, purchase history, contact details, and engagement across digital platforms, CRM data, email or product subscription data, purchase history. First-party data is considered valuable because it is collected with user consent and is typically accurate and privacy-compliant .

This first-party data is stored within the business systems, such as CRM, marketing automation tools, call center platforms, and other sales, support, and marketing applications.

First-party data became essential with rising privacy concerns (privacy laws and regulations such as GDPR and CCPA) and shifting consumer expectations to a more personalised experience .

Many brands don’t have direct access to their customer data, and instead, they rely on second- or third-party sources. Even some Fortune 50 companies struggle to understand their customers clearly, making it challenging to create products that genuinely align with their needs .

Mechanism

First-party data is collected using different methods such as analytics software, requesting and analysing customer feedback, engaging website visitors through polls and surveys, and connecting a website with social media platforms.

Depending on the first-party data source, different tracking mechanisms are used. Starting by implementing tracking solutions such as Google Tag Manager or server-side tagging to monitor user interactions across the website or app. Customising tracking with tools like custom tags, consent management platforms, and analytics software to collect data on user behaviour, purchases, and preferences.

Tracking cookies are used to gather first-party data. Cookies allow collecting information on user preferences and activity, but using cookies requires a compliant cookie consent mechanism. Consent Management Platforms (CMPs) are used to handle user consent for data collection; they maintain compliance with privacy laws.

After collecting the first-party data, it is stored in a customer relationship (CRM) system. It allows storage, management, and segmentation of customer data.

Server-side tracking is often used to manage first-party data. Server-side tracking gives complete control over data transmission and management. It also offers the ability to protect sensitive user data.

Sources of first-party data

Website analytics tools

Tools like Google Analytics are used to collect first-party data directly from website users. It allows insights into user behaviour and engagement to be gained. Encouraging account creation enables gathering personal data such as names, email addresses, and shipping information.

Analytics tools allow for the collection of customer data across key touchpoints. A good practice is to prioritise gathering first-party data during critical moments in the customer journey, such as onboarding, checkout, or post-purchase interactions .

Customer Match, introduced in November 2024 by Google, contributes to using first-party customer data to improve ad targeting. Google Ads’ Customer Match allows you to upload your own data, like email lists, to reach users across Search, Display, and YouTube ads .

Social media

Platforms like Facebook and Instagram provide valuable insights into existing followers, serving as a first-party data source. The data from social media includes detailed breakdowns of the audience: age, gender, geographic location, education level, job title, relationship status, interests, and hobbies.

Purchase history

Purchase history, along with order frequency and average order value, is a crucial source for e-commerce websites. This data helps deliver tailored product recommendations, assisting users in making more informed purchasing choices.

Besides, purchase history is helpful for customer retention efforts. Purchase history is useful for launching targeted email campaigns that offer exclusive deals and share content adjusted to individual interests.

Surveys and polls

As a first-party data source, surveys provide insights into your audience’s opinions and help better understand customers. They can collect detailed feedback on the products and services. By using this first-party data source, businesses gain a deeper understanding of existing customers and their preferences.

Difference with other data types

Zero-party data vs First-party data

Zero-party data refers to the information customers willingly share with a business. It’s the kind of data they’re happy to provide in return for something valuable, such as exclusive discounts, customised offers, membership in a loyalty program, early access to product launches, and more . Unlike first-party data, which is usually gathered by observing customer behaviour, the customer provides zero-party data directly and voluntarily.

While zero-party and first-party data can sometimes overlap, the key difference lies in how they’re collected. First-party data is derived from observing customer behaviour, whereas the customer directly provides zero-party data. Since the data comes straight from the customer, it is highly reliable.

Second-party data vs First-party data

Second-party data is information that the organisation does not collect directly. Instead, it originates as first-party data from another entity. Businesses might acquire second-party data from trusted partners.

In many ways, second-party data is the same as first-party data, as it's gathered using the same methods, just by a trusted partner instead. However, the reliability can be lower if the external data source is not checked well .

Third-party data vs First-party data

Third-party data is the information collected by entities that do not have a direct relationship with the user. This data is compiled from multiple websites and platforms, then sold to businesses by data brokers or aggregators.

When comparing the two, first-party data is more accurate, better aligned with the audience, and can be more easily adjusted to privacy standards.

Third-party data helps supplement existing customer information with details the business doesn’t collect directly or can’t access. Many brands invest in third-party data to gain key demographic insights like age, income, gender, and interests, strengthening customer profiles.

Legal and compliance

With or without cookies, privacy remains a top priority, and users still expect personalised experiences . Data privacy regulations across the globe shape the way businesses collect first-party data. Regulations such as GDPR, CCPA, and LGPD form data privacy standards. They are designed to protect individual privacy rights and place specific responsibilities on organisations regarding data collection, use, and security .

GDPR

The General Data Protection Regulation (GDPR) is a law established by the European Union (EU) to promote the transparent collection and management of personal data by organisations and businesses. To comply with GDPR, any personal data collected within the EU must only be transferred to locations that offer a level of data protection equivalent to that of the EU. This includes all EU member states and a list of approved countries such as the United Kingdom, Argentina, Switzerland, and Japan .

CCPA

The California Consumer Privacy Act (CCPA) is a privacy law in the U.S. that gives California residents greater rights and control over their data. CCPA governs how businesses in California collect, use, and sell personal information. It grants individuals the right to access the data collected about them, request its deletion, and opt out of its sale. The law applies to businesses that meet certain thresholds, including annual revenue, the amount of data they handle, or their engagement with California consumers .

LGPD

The Lei Geral de Proteção de Dados (LGPD) is Brazil’s data protection legislation, modelled after the GDPR. It regulates the handling of personal data within Brazil and empowers individuals with higher control over their information. The law prioritises transparency, limits the use of data to specific purposes, and promotes data minimisation. Under the LGPD, organisations must secure consent for data processing, clearly inform individuals about how their data is used, and adopt security measures to protect personal data.

Ethical considerations in collecting and using first-party data

Ethical considerations involve respecting individuals' privacy, securing their consent, maintaining transparency in data use, and allowing customers to control what personal information is collected .

Practices for lawful data collection and usage

To manage first-party data effectively and stay compliant with regulations, such practices are used:

1. High data security. Protecting first-party data from unauthorised access is achieved by security measures like encryption, access controls, and regular audits .
2. Data retention and deletion policies. It includes implementing and maintaining clear guidelines on how long data is stored and how it’s deleted .
3. Building a data governance framework. Developing a comprehensive framework that defines roles, responsibilities, and procedures is beneficial for compliant personal data handling .
4. No use of Personal Data or Personally Identifiable Information (PII). Companies are prohibited from using unique identifiers to track individuals across websites and campaigns .
5. Regular privacy audits. Consistently performed data protection impact assessments and audits allows for uncovering potential risks and weaknesses in data processing operations .
6. Technical Infrastructure. Allocate resources to Customer Data Platforms (CDPs) for effective data management and in-depth analysis .

Use cases

Creating personalised customer experiences

First-party data is key to understanding the audience and creating tailored experiences. So, the data can be used to personalise customer interactions, from product suggestions to design inspirations that suit customers’ tastes. Brands can build lasting customer relationships by delivering personalised experiences that honor privacy and provide value .

Segmentation and targeting

Using first-party data for segmentation and targeting includes a structured approach to grouping the audience based on information available. Firstly, the key segmentation criteria (e.g., age, location, and purchasing behaviour) are defined, and then the data is analysed to see patterns.

Such data allows for creating customised marketing efforts, including personalised email campaigns, website content, and dynamic ads, to meet each segment's specific needs and interests.

Retargeting campaigns

Sometimes, customers visit the website without completing a purchase. However, using first-party data allows regrouping and improving future interactions. With first-party data, businesses can personalise the experience for visitors based on their specific interests, motivating them to return to the site .

Cross-selling and upselling

Analysing first-party data reveals cross-selling opportunities, allowing businesses to suggest complementary products or services that align with prior purchases. Upselling offers can be personalised based on a customer’s spending habits and interests.

Improving product/service

Gathering customer data gives a better understanding of their preferences and needs. Whether it's adding a new product, creating a service, or finding new ways to meet customer needs, insights from first-party data can help fulfil customers’ requests .

Customer Retention

Businesses can identify patterns and gain insights into customer behaviour by analysing customer purchase history, preferences, and interactions. Using such data helps to strengthen relationships with existing clients.

First-party data for customer retention can be used to run targeted email campaigns based on past purchases to offer exclusive deals. Another use case for first-party data usage is developing loyalty programs to retain customers .