Over the past several years, consumers have become infinitely more aware of ways their private information is being shared. As a result, the foundation on which third-party data is used for marketing has shifted dramatically.
For example, web browsers such as Firefox and Safari have cracked down on online ad trackers, and GDPR and other data privacy laws have begun requiring that websites be more stringent about how they use peoples’ data. Not to mention data breaches the likes of what happened with Facebook and Cambridge Analytica have continued to be ever-present.
With all of this going on, it is presumably not a great time for marketers to be dependent on data that they acquire from other companies. Rather, perhaps more than ever before, there is incentive to supplement and, in part, replace third-party data with first-party data that they collect directly from their customers.
In fact, in an April 2018 survey of 522 brand marketers in the US and Europe, 85% of US respondents and 75% of respondents in Western Europe reported that increasing their use of first-party data is a high priority. In part, this may be due to less availability of third-party data based on the changes occurring within data giants such as Facebook. Fallout from the Cambridge Analytica controversy included Facebook announcing the shutdown of its Partner Categories, a product that enabled third-party data providers to offer their targeting directly on the platform.
For companies that harness data to inform their marketing, utilizing Partner Categories is no longer an option, but purchasing demographic data directly from aggregators such as Acxiom is still common practice. For now, similar data resellers continue to be in high demand. However, marketers should start to shift their focus to first-party data sources such as their own CRMs as well as the services of agencies that have the technology to collect and privatize more robust customer information.
None of this is to say that third-party data should be completely phased out of a marketing strategy — while it may be losing some of its glamor, few marketers can rely on first-party data alone to power their biggest campaigns — yet. Rather, brands should begin relying more on data from their own loyal customers, who willingly give information in exchange for something they value.