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As the cookie crumbles, we look at the basics of building your first-party data strategy and why businesses should get to know Customer Data Platforms (CDPs).
When Google announced a delay in Chrome’s phasing out of third-party cookies until the second half of 2024, the collective sigh of advertisers’ relief was almost audible. Whilst new targeting technologies, like Google’s Privacy Sandbox, are in the works, ad blockers, cookie opt-outs, and the hit-and-miss of cross-app tracking means third-party cookies are now only a shadow of their former self.
With 81% of companies dependent on third-party cookies and 55% indicating they’re not prepared for a cookieless future (1), the transition to the new advertising paradigm is
not easy. A journey of a thousand miles begins with a single step. With pragmatic planning that increases short-term effectiveness and long-term strategic advantage, it’s worth taking a dip (and then a plunge) into first-party data.
Quick wins with first-party data
Here’s some good news – chances are your organisation already has some first-party data, which will most likely be your customers’ email. Starting from an email, your organisation can collect further data across online and offline touchpoints, enabling you to better understand customer behaviour, lifecycle, and retargeting and provide personalised experience and offerings.
Here are some ways you can quickly build up your first-party data;
+ Grow your database by designing lead magnets that add value to your customers. Depending on the value offered, this may be an opportunity for you to gather additional information for segmentation.
+ Tag your website and utilise analytics software like Google Analytics 4 (GA4). It is worth noting that when Google phases out third-party cookies, your website can still collect data and analyse behaviours on site.
+ Data match to create more personalised and accurate customer experiences (see Customer Data Platforms below)
+ In-store transaction data such as frequency, location and value
+ Call centres if the customer service process includes adding additional data points. A useful one is phone numbers, which provide an additional method of engagement and the ability for enhanced custom audiences in your digital advertising.
Increasing the amount of data collected from your customers will likely increase frictions that hinder goal completion. Therefore, always consider your use case and data strategy before implementing lead magnets.
Respect your customers’ privacy
No matter which method you use to increase first-party data generation, respecting and protecting your customer’s privacy must remain a top priority. From ensuring you are specific when asking for permission (including how the data will be used and what kind of communication your customer should expect) to educating your staff on the rules of engagement, frequent usage of first-party data can sometimes require a process or mindset change within your business.
Create your competitive advantage with Customer Data Platforms
As you accumulate a wealth of customer data, how insightful it is and the ease of usage for marketers will be critical to success. Like customer relationship management systems (CRMs), customer data platforms (CDPs) collect customer data to help your team deliver a more personalised experience. The differences between the two are how data is collected, the types of data, and how it can be used.
How is data collected?
Whilst CRM data is predominantly manually generated through interactions between a customer and your business’ sales and support teams, CDPs are automatically collected across various digital touchpoints owned or used by your company.
What types of data?
Like CRMs, CDPs collect and store first-party data. However, CDPs can track and combine interactions from a range of company-owned touchpoints, including customers’ behaviour on your website, how they engage with your email marketing, apps (if your business has one), the ads they clicked on, subscriptions and more. By unifying data that often sit in different software, CDPs help you better understand your customers.
How can it be used?
CDPs are used mostly by marketers to provide more targeted and nuanced campaigns, customer segmentation, attribution and analysis. The use of CRM and a CDP are not mutually exclusive and often can help each other create a more personalised experience for a customer.
CDPs won’t replace third-party cookies, and neither should they try to. By using CDPs, the data your business collects, with permission from your customers, can help boost campaign performance and advertising ROI. Furthermore, when used in conjunction with CRMs and marketing automation tools, CDPs can enhance your relationship with existing customers and enable your marketing team to offer more relevant communication and offers.
(1) “With First-Party Data, Marketers Are Finally in the Driver’s Seat”, September 2022, Harvard Business Review