Do you need a Customer Data Platform (CDP) for first-party data? Or, does a CDP need first-party data to build a unified customer view? The answer is yes to both these questions. Creating a unified customer identity is dependent on the quality and consistency of first-party data.
Tags have done their job in collecting first-party data for CDPs, but it has not been easy off-late with browser restrictions, a lack of paid media attribution, severe privacy compliance, and inconsistencies due to siloed data. Server-side tagging has provided many ethical and legal workarounds for marketers and data analysts in generating first-party data and building a unified customer identity.
This article answers some fundamental questions that will help you build a unified customer identity with first-party data.
- How are first-party datasets collected?
- What are the challenges that you may face in collecting first-party data?
- What are the benefits of taking the first-party data approach?
- How to use data streaming and identity creation to build a unified Customer ID?
- Why is a unified customer ID necessary for a better Customer Data Platform strategy?
Using first-party data to build customer identity
A first-party data is a key to building a unified customer identity. First-party data is the information about your customer that you collect from their interactions with your website or landing pages.
And hence, it sets the context to build customer identity that helps recognize customers who visit your website or landing pages. Third-party cookies choke this flow and disturb the accuracy of data that helps in creating the identity. Despite first-party cookies having the ability to build a customer profile, ingestion of first-party data is not fully supported with hazy data streaming abilities. Your tags need to be able to collect data accurately and stream them into the first-party cookies without any distortion.
“67% of marketers surveyed claim they feel a combination of being “overwhelmed, helpless and even confused” over making sense of cookieless tracking.”– Ad Age
There are many ways to do this, but one of the most effective ways is through cookies. Cookies are small pieces of text which a web server sends to a browser when it first loads a page on your site. When someone visits our site and we have set up our cookie correctly, they will send back first-party data every time they visit any other page on our website. This means that we can see what pages are visited and how often they’re visited and what items, in particular, were viewed by each customer who was logged in while browsing around on our site, for example. We can also see how long they spent on each page, and what other pages were visited during the same session.
Challenges of using first-party data for customer identity
Though there are many ways to source first-party data, it is not always ready to use for different marketing needs. Some of the reasons we see why this happens are because of:
Data from disparate sources: Every source has its own way of delivering first-party data, especially if you are working with multiple demand-side platforms. The formats are unique to the platform. With third-party cookies, sometimes these platforms fail to gather accurate data about the customers.
Assigning data points to customers: Inaccuracy of customer data poses another challenge to marketers. The different data points collected across different marketing sources and channels cannot be assigned back to the relevant customer. And this happens due to lack of customer identity.
No website or app sign-in behavior: If the user has not signed in, with pure client-side tagging, there is no way to know whether the a user’s activity an existing or new one. It cannot be assigned to a specific customer to explore the behavior before and after sign in. This requires a unique customer identity.
Types of first-party data sets that are available
First-party data that you collect directly from your audience or customers include:
- Goal conversions: Data from behaviors, actions or interests demonstrated across your website(s) or app(s). This could be their journey across pages to the final goal page, event, or call-to-action. It includes which channels are being used to discover your website and what on your website is most engaging.
- CRM: Data you have in your CRM through cold connect, website queries, chat, or form submissions. This information would also be updated using feed and inputs from the CRM platform.
- Subscription data: Another source of first-party data which gathers everything in it is about prospects converted as customers, their willingness to purchase, preferred plans, and so on.
- Social data: Social media also brings first-party data when they sign up for a social campaign, participate in a poll, or join your network as a connection.
- Offline data sets: It can also include offline interactions and information such as completed surveys, customer feedback, and other customer information stored in your CRM database.
How to use first-party data sets the context to build customer identity?
Using first-party data directly influences the return on investment (ROI) and increases the lifetime value (LTV). First-party data provides an accurate view of your customers’ behavior and preferences over time.
When you receive data from a demand-side platform, we assign a Magic Pixel ID to every user based on the email ID registered during the campaign. The same ID is stored and mapped back to other activity of the user detected on the website, mobile app, and other sources of marketing interactions. The ID that the DSP creates is also assigned back to the user. This happens with a combination of creating a unique ID and building first-party cookie-based identifiers.
- Unified ID: The unified ID is generated by hashing the email address which is further assigned to the unique Magic Pixel ID for deduplication and bidding on public sites. This is created with user consent or PII (Personally Identifiable Information) to maintain customer identity.
- Magic Pixel ID is used as a first-party identifier (IDs) similar to first-party domain-based identity systems used by many marketing software platforms. These anonymous IDs are rendered from your domain. . This holds the key to consented first-party data about the customer and hence belongs to your brand.
Magic Pixel ID becomes the primary ID for all your customers and ID graph built on MPID, ties to disparate identities assigned as FB ID and Google ID every time a tag is fired for the visitor.
Magic Pixel ID can be further aligned with the DCO for bidding and enriching audience segments based on the features, signals, and traits collected about the users can integrate the same enriched information with the DMP to identify and serve returning users in a personalized way.
Benefits of creating first-party data are beyond customer identity
While solving the customer identity issue is a primary and direct benefit of first-party data, it fetches for a lot more add-ons.
A Unified view:
It simply means you can attribute how a specific customer or consumer is behaving in the process of exploring your brand or making a purchase. A unified customer identity recognizes customers across all channels, devices, and interactions with your brand. This helps you plan and devise your campaigns better. You can avoid the grunt work that comes with guessing.
Better business decisions:
The end goal of any ad campaign or other marketing campaign is to make the most out of minimal costs. Based on accurate first-party data sets about past performance, Magic Pixel ID can be used for audience segmentation and targeting. Typically, knowing the audience at a granular level is a precursor to any campaign. The top layer of decision-makers and the conversion optimizers, ad campaign designers, bidding strategists can use first-party data for further ad optimization, bidding, and retargeting. It means you will know how to spend where, on whom, and for what.
Detailed customer insights:
Retargeting and ad optimization is treading towards the need for a better brand recall. Brands are investing more into gaining insights about customers to help them with what they are looking for. These detailed insights also help to personalize content and offer it for each individual. Magic Pixel ID Link tied to your data management platform (DMP) or Customer Data Platform (CDP) provides an accurate view of your customers.
Why is it important that your company accurately view your customers’ behavior and preferences over time?
In a post-COVID scenario, customers are more comfortable with digital interactions. In fact, new users also prefer brand discovery and exploration for the first time, through online touchpoints. Knowing the customer and extracting accurate data with offline means and long cycles, no longer prevails. The offline sources are weeding out.
Brands need to develop a digital and yet human-human connection with their prospects and customers. This boils down to the indispensable need of ‘knowing your customer’. Deriving an accurate view into your customer behavior patterns, preferences helps in constructing a rules gear within your system with precision.
Every touchpoint is perceived differently by a customer and is also discovered at a different stage of the brand-customer relationship. Customizing the experience and also keeping it consistent for a zillion permutations and combinations cannot be left to human deftness. It needs a quick, no-code interface that can mature over time and augment your entire martech stack.
And this is why more D2C brands are preferring to invest in owning their customer data in the form of first-party data.
The future of marketing with first-party data
For marketers, first-party data is a necessity. You may spend money on ad budgets, but it still gives you third-party that you don’t own. So, you are spending money on knowing your customers without owning the data and being unable to store it. Integration of a server-side tag manager into your data layers or data aggregation platforms such as a CDP or DMP that can stitch discrete datasets into a profile is the solution at hand for you. Further, a server-side integration with DSPs resolves this problem and ensures your money is well spent on building your own bank of first-party data.