Retargeting and the Role of First-Party Data


With the sheer size and scale of the Internet, it is no surprise some individuals choose to browse several sites before committing to a product or service. However, every website visitor lost is a missed opportunity to create a loyal customer. This means that getting a visitor to return to a website is a monumental task. Here is where retargeting comes into play.

Retargeting is a form of online advertising which helps keep your brand front and center with website visitors by encouraging them to return to your site. The beauty of retargeting is the ability to stay top of mind with your site visitors.

Retargeting works. Venturebeat cited an AdRoll survey that found more than 90 percent of marketers claimed retargeted advertisements are as good or better than search ads, which are quite popular in modern digital marketing. In fact, according to the source, 71 percent of organizations surveyed by AdRoll spend as much as 50 percent of their digital marketing budgets on retargeted ads, which is up 34 percent compared to 2013’s statistics. However, there are better methods out there.

The best way to retarget consumers and businesses is to understand visitors’ intent. Adam Burke, president and CMO of AdRoll, explained to VentureBeat that marketers are finally discovering the many ways to leverage their website’s internal behavioral data to meet advertising goals. However, retargeting campaigns need to rely more on finding new first party data sources in order to craft successful strategies. On top of first party data, organizations can also leverage third- and second-party data. Below we examine the different types of data and some of the benefits and challenges digital marketers face using each.

First-party data
Now is the best time to start leveraging first-party data. For one, this is information that the company already collects from CRM data to Web analytics data to customer feedback. It can be made up of concrete facts, such as a visitor lives in Michigan, or it can be more abstract, like if someone is just browsing or actually ready to buy a product.

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First-party data is the most relevant information that an organization can collect. On AdExchanger, Peter Kim explained that first-party data is critical for the future of marketing mainly because no competitor can access it. Its completely proprietary. In this way, advertising and retargeting campaigns will be unique in every way, and interactions can become more personalized. Both of which are virtues in the modern era.

Second party
Second-party data can be compared to anything else that is secondhand. In essence, the term refers to someone else​’s first-party information. Using a co-marketing ecosystem – whether marketer to market or marketer to publisher – organizations can acquire second-party data and learn how to better execute advertising campaign. In particular, it is great for finding and extending a website’s audience without any preconceived assumptions about demographics that third-party information offers. AdWeek reported that it helps fine tune augmentations to available information, but in that way it can be too specific to be valuable for a wide audience.

Also, because of the nature of its source, second-party data might not relate to any specific industry. This can be solved purchasing it from a direct competitor, that is just not a good business move. In fact, to gain any valuable insights that stand alone, an organization is going to have to combine second-party data with more reliable sources of information, like first-party data.

Visitors’ behavioral trends, for example, area form of first-party data.

Last but not least
This leaves third-party data, which is information that can be useful to identify larger scale trends such as general demographics and their behaviors and associations. The problem with third-party data, however, is that it is sold by organizations, which means everyone, including competitors, has access to it, and, therefore, third-party data is less valuable than the other two forms of information.

Third-party data is by no means useless, but it often works better when combined with other information. Digiday reported that combined with third-party information, first-party data will provide more context in specific areas, especially in retargeting efforts.

Retargeting armed with data
Retargeting is going to work best if visitors are first segmented into groups. This is where first-party data in the form of visitor intent comes in – it allows organizations to segment by the goals of the individual, such as whether they are a purchaser, doing research or anything else. Visitor intent is not about the person, instead it’s their purpose for visiting a website. First-party data allows for the personalization of retargeting advertisements that second- and third-party data alone could never achieve. Narrowing the playing field is essential when crafting new campaigns.

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Why the Internet’s Most Valuable Commodity Is First-Party Data


Most consumers already know the websites they visit collect their data, so when they get personalized offers and content, they’re not surprised. Consumers also are increasingly aware of the distinction between first-party and third-party data and that some companies collect third-party data and resell profiles of personal information to willing buyers.

Third-party data aggregation is under attack, which presents an opportunity and incentive for digital marketers to favor first-party data to build a more strategic and personalized marketing strategy.

The Power of First-Party Data

The more you know about the way your customers engage with your digital properties, the better you can align what you’re selling with what customers are interested in. Though third-party data can be useful in the marketing process, a skilled and nuanced first-party data strategy is a more reliable and respectful way to deliver offers with a higher likelihood of engagement and conversion.

To clarify the differences between the two, first-party data is generated when an organization collects visitor behavior about customers on its own digital property. Sometimes, this is anonymous data, but more often, an organization knows the visitor’s identity because he or she is either a registered user or has provided identifiable information in a previous visit. Brands then track consumers to serve up relevant information and offers.

Using first-party data means that the data comes from a company learning how its customers interact directly with its brand. This is its real value.

For example, first-party data lets a retailer know whether a customer favors brown shoes over black based on current or past shopping activity, or whether a consumer prefers to shop on a company’s website or via a mobile app. Typically, this approach is enabled through first-party cookies placed by your company and are almost universally accepted by consumers.

Understanding Third-Party Data

Third-party data collectors also use cookies to track consumer behavior. However, these cookies are typically dropped by a third-party ad provider, and they are now frequently rejected based on a consumer’s browser settings. But when those cookies are enabled, those third-party aggregators can track users across multiple sites and stitch data together to form a user profile. That tracking can ultimately be paired with a consumer’s identity and a host of other information, such as names, demographics, interests, and preferences, as well as potentially more sensitive data, such as medical information.

Data aggregators—which have neither relationships with consumers nor their explicit permission—then sell that data.

Third-party data also collects other personally identifiable information culled from entirely unrelated online experiences. For example, third-party data might tell an online news site to show a consumer an ad for women’s jewelry because of a gift he purchased for his wife months earlier. That sort of conflation is not only counterproductive, it can also undermine consumers’ trust in your brand.

Though third-party data has gained traction, it’s not new. Marketers have historically used the buy media approach to find new customers through third-party sourcing of information.

For example, direct marketers may send circulars to certain ZIP codes based on what third parties know about demographic information within that ZIP code. The technique hasn’t changed, but the sophistication and the ability to track consumers across multiple sites while collecting personally identifiable information has. This evolution has prompted the growing backlash from consumers and privacy groups.

Shifting the Focus to First-Party Data Collection

The answer for today’s marketer is first-party data: Marketers should collect and harness their own data based on one-to-one brand experiences instead of relying on third-party sources’ purchased and unrelated customer information.

Marketers ought to cultivate relationships directly with consumers and only augment with third-party data when appropriate. By shifting the focus to first-party data collection, marketers can evolve their processes before the current, largely prevalent one is made obsolete through legislation and consumer backlash. Not only is first-party data richer and better in quality, it allows marketers to enhance the customer experience continually without raising the hackles of privacy advocates and consumers.

If your company is investing the time and money in technology to know customers better, one of the best ways to do that is to build upon how customers are already interacting with your organization and its digital properties rather than based on what a third-party aggregator may put forth.

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