First-Party Data vs. Third-Party Data: Which Is Better?

TL;DR:

• First-party data comes from your own audience, whereas third-party data is collected from outside sources.
• With first-party data, you maintain control over how it is collected.
• Because you have complete control over how you collect first-party data and because it comes from your own audience, it’s more accurate than third-party data.
• It’s easier to maintain compliance with data privacy regulations when you use first-party data instead of third-party data.
• See how brands like Bliss Cosmetics, the NFL, and Coca-Cola have implemented first-party data into their marketing efforts.

For marketers, there are many different types of data to consider. And when it comes to first-party data vs. third-party data, you should put a higher value on first-party data. There are quite a few reasons why, including ethics, data privacy, accuracy, and more.

Below, we’ll take a more in-depth look at the differences between these two types of data. We’ll also showcase a few brands that have successfully centered their marketing efforts around first-party data.

First-Party Data vs. Third-Party Data: Key Differences

What’s the big difference between first-party data and third-party data? You collect first-party data directly from the source (your customers), whereas with third-party data, you may not ever know how exactly it was collected or where it came from. That’s because third-party data vendors gather this information from their own sources — and they may not share those sources with you. 

That’s the broad-strokes distinction. However, there are lots of reasons why third-party data — and third-party cookies, for that matter — is on the decline. As you read through the key differences below, you’ll see why we recommend first-party data vs third-party data.

Sources

As noted, first-party data comes directly from your own audience. Data collection can happen in a number of ways: 

• First-party cookies
• Website analytics
• Loyalty programs
• Social media analytics
• Customer surveys
• Interactive customer experiences 

Virtually any point at which customers or potential customers come into contact with your brand is an opportunity to gather first-party data.

By contrast, third-party data can come from anyone and everyone. Often, you won’t know exactly where this data comes from because the datasets are purchased from providers who aggregate it from a plethora of their own sources. Third-party data can contain demographics, browsing habits, purchase histories, and more.

Control

With first-party data, you have total control over the information, from the time that you collect it up until it becomes obsolete. It’s one of the big perks to first-party data: You can — and should — constantly update it, refine it, and segment it, all in the name of keeping your data as current and useful as possible. It’s best to use a customer data platform (CDP) or customer relationship management (CRM) platform to keep your data in one secure, accessible space. This will make it easier to use the data and keep it updated. 

With this kind of control, you can really zero in on each of your audience segments to understand what motivates their customer behavior and how you can better target them with personalized experiences. First-party data enables you to form better customer relationships while gaining a greater understanding of the customer journey.

Third-party data, on the other hand, offers very little in the way of control. When you purchase it from a data provider, you get what you get. You can’t choose how to collect data nor can you update it to better suit your needs. If the data you’ve purchased isn’t helping you to refine your marketing campaigns, then the only option is to buy different data (or make the switch to first-party data).

Accuracy

Data sources and control are what make first-party data much more accurate than third-party data. If you’re continuously collecting first-party data from a broad variety of sources that are related to your brand, this information should be a good representation of your target audience and all of their needs, wants, and preferences. For example, if website analytics reveal that one customer visits a certain page on your website often, you can rest assured that this customer is interested in whatever that page has to offer.

You’ll get no such insights from third-party data. Since it’s a random collection of information unrelated to your customer base, it won’t help to inform personalization efforts — and at times, it can even prove to be misleading. For example, you could use third-party data to guide your ad spend. However, that data could very well include information about users who haven’t the slightest interest in your brand and its offerings, which would be a waste of money. 

Third-party data also tends to become obsolete more quickly. First-party data is a constant stream of new information, which helps you maintain data quality while keeping up with evolving trends and customer preferences. Third-party data is static. The only way to update it is to buy more.

Costs

We mentioned above that accuracy is one of the major benefits of first-party data. That accuracy leads to another benefit, which is more cost-efficient marketing.

The problem with third-party data is that it may not be representative of your audience. Thus, when you attempt to use it to target your customers, it can kind of feel like throwing darts with a blindfold on. You may be targeting the customers represented in the third-party dataset — but you’ll have no idea if any of them are actually interested in your brand.

Meanwhile, you know that the customers represented in first-party data are interested in your brand — and that’s because they are your customers (or potential customers). By targeting this audience, you’ll enjoy much higher engagement rates, and your conversions should be higher, too. First-party data can help you get the most from your marketing spend.

Privacy and Compliance

With rules like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) in place, data privacy regulations and compliance are huge concerns for today’s brands. First-party data makes it easier to ensure regulatory compliance. 

This goes back to the idea of control. With first-party data, you have complete control over your data protection practices, which means that you can make sure that they follow current regulations. Third-party data is riskier, because even when you purchase it from a trusted partner, you may not know how it was collected or whether it meets current privacy standards.

3 Examples of Brands Leveraging First-Party Data

Want to see for yourself how brands are making the most of first-party data? Below, we have three examples of brands that are prioritizing their first-party data strategies.

Bliss Cosmetics

In partnering with Jebbit to launch both a Product Recommendation Skincare Quiz and a Vitamin C Knowledge Quiz, Bliss Cosmetics made first-party data the centerpiece of their marketing strategy. The idea behind this effort was twofold: 

• To help customers learn more about products that might be right for them
• To gather insights about customer preferences and needs so that Bliss could create an effective personalized marketing campaign that connected with consumers on an individual level

Upon launching these quizzes, Bliss saw amazing results. Not only did they get 25 times more swipes on Instagram, but they also saw a 34% increase in captured leads. Plus, once they started using the collected data to personalize their emails, they saw a 167% increase in email open rates. 

The NFL

The NFL formed a partnership with Jebbit to create dozens of different quizzes and other types of interactive content. This represents a huge effort to create better experiences for football fans the world over.

One experience in particular — a quiz that asked fans to choose top-performing players — is the perfect example of this. It gave fans a fun activity during the off-season, which was a great way to build customer engagement during a time of year when people are overall less engaged with football.

It also achieved some impressive results. The NFL saw 17% higher values among fans who engaged with this experience versus those who didn’t, and these fans were twice as likely to make a purchase from the NFL store. This experience also raised the NFL’s digital data capture rate by 38%.

Coca-Cola

Back in 2019, Coca-Cola started making major moves toward first-party data by focusing on mobile device IDs and in-house data management so that they could maintain complete control over their relationships with their customers. 

One of their most recent efforts focused on Innocent Drinks, which is a beverage brand owned by Coca-Cola. They recently launched an out-of-home campaign featuring QR codes displayed on billboards throughout London metro locations. When passersby scan the QR codes, they’re invited to explore Innocent Drinks’ sustainability efforts.

This campaign has been an all-around huge success, netting a 65% engagement rate and a 10% repeat engagement rate. Most notably, the number of customer profiles collected exceeded the brand’s expectations by 5,000%

Ramp Up Your First-Party Data Strategy With Jebbit

Making the shift toward first-party data vs third-party data is the smart move. It’s more accurate, you’ll have more control over it, and you can collect it from your own sources, which enables you to use data to form direct relationships with your customers. The ability to connect with customers and create personalized marketing messages will in turn help you increase conversions — and that can only be a good thing for your bottom line.

To learn more about how Jebbit can help you collect first-party data through personalized experiences, schedule a strategy call with our Experience Experts.