Business Impact
How Will First-party Data Be the Game Changer of 2022?
Last updateD on
January 26, 2022
A lot of things got easier in 2021 as technology advanced tremendously to continue making the digital world more accessible and integrated into our everyday lives.
But luckily there was something that got harder in 2021: being irresponsible with data. You see, with great power comes great responsibility, and as people’s data gets poured online, more and more restrictions appear to ensure that data is always safe, without exceptions. And that is great news for organizations that have figured out how to make the most out of their first-party data.
Restrictions and regulations are not new though, and the fact that the world celebrates Data Privacy Day this week demonstrates that keeping data secure has been a thing for a very long time. But in 2021, a lot of these regulations started coming from the industry itself.
We hinted recently that heightened risks surrounding data processing, potential misuses of data, and more overarching regulatory frameworks across many markets have pushed tech industries to change their practices from doing just the bare minimum to taking proactive measures to protect their users’ data at all costs. This is why third-party data will be a thing of the past in 2022 and first-party data will be the only way forward.
Before going deeper into what is going on, let’s get the basics right. What differentiates first, second, and third-party types of data, is the distance between where data originated and the organization that will be using it.
First-party data is basically data that an organization owns because the user gave it to them directly in the first place, without intermediaries. This includes any sort of service or product that collects data from users or customers directly, through any point of contact.
This information is extremely valuable because it gives the organization full rights to use it to understand their customers or users, their behaviors, their experiences, and their level of trust toward the organization itself. And trust is the key here because it’s the base of loyalty and a higher return over investment.
Second-party data involves adding a middleman between the organization and the user. However, this data partner or sorts is a trusted source who already collected the data on their own and has agreed to share it only as long as both organizations’ insights are mutually beneficial. In other words, Organization A will only offer data to Organization B as long as their business will not be affected negatively for sharing information and insights that were hard-won.
Third-party data has been found and aggregated from first-, second-, and other third-party sources and sold, thus having normally no direct connection to the user/customer. In this case, Organization A will find and cross-reference any data available across different databases, compile it, and sell it to Organization B.
The differences between the three types are becoming so important that, according to the American Marketing Organization, this year “approximately 86% of browser traffic will no longer be supported by third-party cookies”. And that leads directly to why the way that data is collected and stored is changing forever.
A lot of thought goes into the actual usage of first-party data and its applicability (examples of which we cover in the section below). However, not enough attention gets paid to how to make sure that this data gets stored and how it gets accessed by all members of an organization.
As user-generated data and personally identifiable information (PII) falls straight from the audience and customers, there is a two-tiered decision that organizations must make:
First-party data is as secure as data gets: the organization that collected it, owns it. But choosing where exactly to keep it is not an easy decision, where infrastructure and security costs, geographical availability at time of growing portability, and other factors come into play.
Response: Data owned by an organization needs to stay that way, regardless of whatever storage and tech stack solutions are ultimately chosen.
A crucial aspect of data is that, when used properly, it can lead to great things. Therefore, the more people within an organization that can get their hands on the information, the greater the output of every team member — and the more amazing the product will be. However, data can be a double-edged sword, leading to organizations getting drowned in data lakes, watching data getting stored endlessly in siloes, never seeing the light of day again.
Response: Both data and its insights need to be accessible by all team members and in real-time, enabling them to create and collaborate with ease and speed.
Analyze it! First-party data is a gold mine for organizations that understand its value. And the best — if not the only — way to do so is to start by analyzing it, breaking it apart into insights that are flexible and shareable. Flexible because, as data evolves, so will the needs of the organization. And shareable because team members need to collaborate with the same data sets, even when different teams will interpret data in different ways.
Every organization will give value to data differently depending on their users/customers, industry, location, etc., but there are key possible outcomes from analyzing first-party data that need to be assessed when building any successful data strategy:
Developing a strategy that makes sense for the quality and quantity of data available is no easy feat. Obviously, being the owner of the data itself gives an organization the ability to determine focus areas and long-term metrics but regardless, there is no one-size-fits-all approach. There always is, however, one common goal: trust.
If users trust an organization, they will return. Meaning that an organization must ensure that:
For both cases, Countly is the solution to making the most out of your first-party data.
Get in touch with us or request your personalized demo to implement a strategy that will help you do everything listed above and more!
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