Our own Bill Furlong, GM of B2B Marketing USA, extols the virtue of first-party data
FPF, yes I am adding to our industry’s alphabet soup, or, better yet, I am endorsing a new cheer that B2B marketers urgently need to embrace. First-Party First? Huh? This is OUR owned data, residing within our enterprise. And it is high time we spend a lot more time understanding, vetting and leveraging these data assets.
Marketers are spending a majority of their time and budget frantically rolling out all the tools, content and externally generated data to build the funnel. We are crushed by demands for technology solutions, and what new-fangled SaaS platform we should add to our stack. Not that this isn’t important, but I think we have failed to start in the proper place and need reframe the hidden value in our existing first-party or “owned” data.
Why enter the frenetic game if you don’t know what you’re equipped with? I recall meeting with a Fortune 500 CMO when I was working with Bizo, a business data platform firm, and he said “you know more about my customers than I do! In fact, I have customer data in excel within 20 different divisions and programs running with several agencies and search firms and have no idea how often I am talking to my customers.” This is a lament I hear all the time.
Also, the data sets are customarily owned by different teams. And most likely cast across a number of vendor SaaS solutions with no macro aggregate “engine” in place. Goes without saying that having troves of data is of little value in and of itself.
Defining the lingo
For some perspective, let’s define the terms in play: First-party data is what the company has built over its history, residing in a multitude of silos and likely not connected to each other. It is comprised of data from behaviors and actions from visitors engaged to your websites, content marketing landing pages. It is CRM system data; loyalty data, e-commerce/point of sale data; Channel partner data; social data, cross-platform data from mobile web or apps.
The newest data segmentation is now “second-party” data, which is basically first-party data that you are getting directly from another source. You can make a deal with a media company, list broker or exhibition company to cross-reference and append new signals to your existing customer profiles. For example, you may be running a search marketing campaign. Google provides you access to interest data that you can match to specific profiles. That is a second-party data application. Many marketers create personas; this is where first and second-party data combine to build more expansive understanding of customers.
Third-party data – you guessed it – is everything else. Typically you buy it from your outbound advertising partners, and usually it is more valuable for broader audience insights and not so much at the individual level. When purchasing this data, marketers are deploying it to build insights or to model new customer segments. This data feed comes from many of your vendors and in the digital media space that can come from companies like Acxiom, Lotame, Oracle, Experian, comScore or your B2B media partner.
Now back to first-party data. Embracing its importance means you need a core technology platform, often called a data management platform or DMP. There are all sorts of players in the business and the reputable research firms like Forrester, Gartner and Winterberry are issuing regular reports on the companies in this space.
At their core, DMPs are buyer-side platforms that allow marketers to take control of their own first-party data, to understand, from a macro point of view, all the signals your customers generate with the brand experience from both offline and online data. Taking control of your first-party data will enable you to:
- build an “omni-channel” view of your customers and prospects;
- slice your own data to create audience segments for display, search and social campaigns;
- target various stages of the funnel with various combinations of stages and engagement in sales cycle;
- pinpoint real ROI, not only on the discretionary marketing spend, but also the role of each tech stack investment;
- build another corporate asset as valuable as, for example, the physical inventory of the company; and
- generate internal insights for customer service, research and development, and supply chain departments.
What increasingly separates the winners from the losers is the ability to transform company-wide data into insights about consumers’ motivations and then turn those insights into strategy. Marketing sits at the crossroads of this opportunity. First-party data with the connected data management platform will put you in a position to own and operate the company’s “insights engine.”
Before you sign off on another tech stack investment or a substantive media spend why not take a look under the hood at your internal data landscape? In this day and age of accountability when the spotlight is on marketing to prove their ROI, why not make First-Party First?