The importance of 1P data—and how to leverage it

Data-driven advertising has never been more complex, partly due to changing regulations and growing, valid concerns about privacy.

Advertisers are faced with the challenge of both efficiently delivering on client objectives while also preserving that consumer privacy and building  trust. In the midst of all of this, the importance of data is constantly at the fore—namely, first-party (1P) data.

‍What do we even mean by ‘first-party’ data?

In the simplest sense, first-party data is any data that a company or brand “owns” because consumers have agreed to share it.

• This is data that a business collects straight from consumers—everything from email addresses and phone numbers via lead forms, to purchase history and app-use data that consumers have “opted in” to share.
• This unique data that a business has access to is considered “safe” (the source is known) and is powerful (it’s specific to the business’ own consumer base, which can lead to more personalized and impactful experiences based on actual preferences).

‍How a lot of brands use 1P data (spoiler alert: Not very well)

A recent HubSpot survey and report on 1P data underscored its growing importance: “62% [of respondents] say leveraging first-party data is now essential to a successful marketing strategy,” making it possible to “understand your most valuable customers, tailor your messaging, increase trust, and improve return on ad spend.”

Collecting 1P data is only the beginning. The true power comes in having the tools and know-how to leverage it to your brand’s advantage.

The sad reality is that there are tons of brands and businesses out there who are sitting on underutilized gold mines of 1P data—mainly because it hasn’t been a priority in the past. Perhaps 1P data was a hot topic when it seemed like cookies were about to go extinct; when that fear receded, temporarily, it’s possible that the focus on first-party data did as well.

At best, many brands may have added a retargeting line item to their media plans, hitting their “known” users with a retargeting message.

However, deeply understanding your first-party users and weaving that data into your CRM can help you not only create a more sophisticated media plan but also expand your target audience and help you find audiences you may not have considered before.

‍Tech that can drive insights while respecting consumer privacy

There are various ways that new marketing technologies can squeeze maximum value from 1P data without sacrificing consumer privacy or running afoul of regulatory frameworks like GDPR and CCPA.

Here are a few examples:

• Data Clean Rooms: These secure environments allow brands to collaborate with third-party data providers without sharing raw consumer data. Insights are generated within the clean room, ensuring privacy through strict data access controls.
• Identity resolution technologies and ID graph: Tools that leverage hashed email addresses (HEMs) or other anonymized identifiers allow brands to link 1P data across platforms while respecting user privacy. This ensures consistent messaging and targeting without exposing sensitive details.
• AI and Machine Learning (ML): AI-powered tools can analyze aggregated data to uncover trends and predict consumer behavior without exposing individual records.

Some ways that CUE can help maximize your 1P data

At Stagwell Marketing Cloud, we’re helping our clients better understand their 1P data by providing an opportunity for clients to upload their 1P data such as hashed emails (HEMs) via our ID graph, and then extrapolating the data within CUE to expand the audience. (Here’s more on what features CUE offers, as well as some typical use cases.)  

Clients are able to gain learnings about their audiences and can layer on additional segmentation to create more precise audience groups for their marketing. These audiences can then be directly actioned upon and pushed to DSPs for activation.

‍What does this look like in practice?

Here’s a simplified version of how this would work with CUE.

• First the client shares their 1P hashed emails (HEMs) via the Data Clean Room, or uploads them onto a privacy-compliant s3 bucket.
• The HEMs are then matched against the ID Graph and CUE’s Data Universe, which yields a match rate percentage.
• The matched IDs are available in CUE as an audience, which can then be analyzed however you need. CUE’s report dashboard can show demographics, psychographics, purchase behavior, and more—and can also include a benchmark to index against.

At this point, the client can proceed in a variety of ways:

• They could simply use these learnings to better understand who their consumers are and how they behave.
• They could more directly unpack the audiences by adding layers within CUE to segment their 1P data further—for instance, looking only at 30–44 year olds, or only at soccer fans—and then using this data for marketing purposes.
• The client could also create distinct, premium audience groups that they could then sell on to third-parties, creating an additional revenue stream for the brand.

The future is 1P!

Overall, businesses are finding 1P data to be a strong revenue stream—not only in optimizing their own content and marketing, but also in developing new revenue opportunities.

Publishers like the New York Times are moving towards a “first party future” by phasing out 3P data entirely and instead doubling down on their own 1P data.

They surveyed their readers (with consent) to create precise audiences that then fuel their own direct-sold and programmatic ads. This not only boosts their on-site advertising revenue but also allows brands and advertisers to buy more premium audiences and move away from questionable 3P data sources.

As the industry evolves, needs and opportunities continue to change and develop; and as consumer privacy takes center stage, businesses are finding creative ways to continue a more sophisticated data-driven and privacy-compliant approach.

If you want to keep up, CUE can help. We’d love to show you how it works, work through your use cases, and answer any questions you might have.