Embrace The Shift To First-Party Data

February 8, 2022

Okay, third-party cookies are dead. Got it. We’ve all read the headlines and have tried to comfort our fellow marketing friends, but many folks in the marketing industry are still panicking and throwing out phrases like “cookiepocalypse” and “the end of remarketing.”

Those make great headlines, but I have to say that I see things a little differently. I know change is often challenging, but in this case, I think it’s a very positive thing. (And I make my living doing digital marketing!) Change typically presents an opportunity and often leads to more innovation and, perhaps, a better way of doing things. I believe that a new approach to digital marketing will be good for everyone and, more importantly, make the interwebs just a little less creepy.

So in the last part of our series, our very talented Katie Lawton broke down the difference between first-party data and third-party data. So, in review, what’s the difference?

It’s easy: First-party data is information that you or your organization collects through direct interaction with your prospect or customer. Third-party data is information collected about your prospects or customers by someone other than you or your organization. Hence the first-party versus third-party types.

Got it. But why is using third-party data often considered creepy?

Because it breaks what I refer to as the normal conversational model. Wait, model? I thought we were talking about cookies?

I’m getting to that, but yes. The normal conversational model is this kind of unsaid protocol that we use to communicate with each other on a daily basis. It’s a comfortable exchange of information that builds over time. It’s the difference between talking to someone you might think is being nosey and someone who is being friendly. In my opinion, over the last decade in digital marketing, we’ve bent and eventually broken that model. That’s why you are hearing so much talk of privacy lately. But that’s a whole different article, so for now, I’ll get back on track.

I’m a big fan of analogies, so for this article's sake, I will use the analogy of an “old-fashioned,” in-person sales encounter to help explain. Remember when you used to physically walk into a shoe store to buy shoes? No? Well, work with me here while I embrace (or mourn) my place in ancient history next to the invention of the wheel.  Let’s pretend that we’re out running errands one day and end up at a shoe store called If the Shoe Fits! We’ll use two different encounters at the same store to show the difference between a first-party data experience and a third-party data experience.

First-Party Data Collection: The Normal Conversational Model

So an example of first-party data collection would be walking into the store and having a representative greet you with, “Hi! Welcome to If the Shoe Fits! My name is Sam, what’s yours?”

That’s first-party data collection, as well as a pretty normal interaction, right? They are clearly a representative of the store and have volunteered their name while asking you for yours, so they may address you correctly. It feels natural. You know who you are giving your name to, and you know why… and it feels kind of friendly.

So you respond. “Good morning Sam, my name is Sean. How are you today?” And Sam comes right back with “I’m great, thank you. Is there anything I can help you find today, Sean?” See how that next question feels so completely normal? But they are asking for just a little more information. Even if you respond with “Uh, thank you, but no. I’m just kind of browsing for a new pair of running shoes.” You have volunteered some information that could be helpful. Sam, making a mental note that you are a runner, says, “Great. I’m over here if you need me. The running shoes are over in aisle 7, and we have jogging apparel in aisle 12.”  All perfectly normal, right?

Right, and if you walk in the store a week or two later and Sam recognizes you and recommends any other running items, it still feels natural. In fact, it feels pretty good to be known and valued. That’s a good customer experience.

So what about third-party data collection, then?

Third-party Data Collection: Broken Conversational Model.

Okay, so let’s go through that same scenario, but from a third-party data collection perspective. Keep in mind that many of these things people got used to, over time, but it's jarring when you really look at it.

So, you ran a few errands before you came to the shoe store, and all of those stores were asking questions about you and logging your purchases. That’s right. The pharmacy down the road, your grocery store – even your personal trainer at the gym. Unbeknownst to you, they have also shared that information with your shoe store, but this is your first time there.

As you walk in, you are greeted by a cheerful voice: “Hi Sean! Welcome to If The Shoe Fits! My name is Sam. We’ve got those Asics Gel-Nimbus 23 running shoes you want in aisle 5.”

And of course, you respond with an “Uh.. do I know you from somewhere? Have we met?” With a bright and cheerful smile, Sam chirps back, “Of course not! But I have heard a lot about you. Oh hey, if that athlete’s foot problem is still bugging you from your last 10k, I would suggest you try our breathable running socks over in aisle 7. I’ll be watching you on the overhead cameras to see if you need any help!”

What? Creepy, right? Like, “looking over your shoulder on your way home” creepy. Why? Because Sam should’t have known any of that information about you without getting to know you first. You didn’t tell Sam any of that, and some of it is really personal. And that is exactly why third-party data collection is going away. It is seen as invasive to your customer.

And the way I see it, great! Let’s get smarter and more direct with people.

Good Riddance & Looking Forward!

Throughout my career, I have advised many clients on the capabilities of technology. But just because you can doesn’t always mean you should. Companies have tried to get people comfortable with third-party tracking techniques because it was easy. And how it was done was kept quietly out of the public eye. Once it all started to surface, customers, of course, pushed back. And the biggest mistake you can make in business is to ignore the voice of the customer.

So what does the customer want? Well…ask them! There are many techniques and technologies that allow you to work directly with your prospects and customers to create a more personal experience. Those techniques are here right now, and even more, are coming in the near future.

For example, the first experience above that felt pretty natural? That’s called progressive profiling, and it’s something that we’ve been doing through marketing automation and content personalization for our clients for many years. If Sam were to remember you when you walked in the next time, you might even volunteer more information, such as your upcoming marathon. It’s a natural exchange and, more importantly, a positive customer relationship. Techniques like that not only build trust, but they build loyalty. From where I stand, that’s taking things in the right direction again.

Would you agree or disagree? Leave your comments!

We’ll cover more techniques like that in a future article but, in the meantime, let’s embrace the change and make the internet a little less creepy!

Sean Rieger serves as President here at WiredViews. Before joining us he built digital marketing teams, tactics, and strategies for Honeywell, Rice University, the Houston Rockets, and the Cleveland Cavaliers.

When he's not connecting the dots for clients at work he enjoys racing cars, making music, building synthesizers, and camping with his family. Other than that, he's not all that interesting, but reach out to connect with him on LinkedIn he's always ready to talk about how he can help.