How to Leverage First- and Third-Party Data in a Cookieless World

It’s not rocket science: the foundation of any successful marketing strategy is strong data. The tricky part is understanding the nuances of first-party and third-party data, to leverage each in a way that allows you to serve relevant ads to your target audiences. 

It’s also important to be aware that, as privacy laws crack down on third-party cookies, it will soon become more difficult for marketers to deliver on their goals.

Let’s dive into the advantages and disadvantages of first-party data and third-party data, and how you can use each to build a killer marketing program while complying with privacy rules.

The Benefits and Drawbacks of First-Party and Third-Party Data 

First-Party Data

First-party data is collected through your marketing campaigns when people voluntarily give you their information in exchange for your offer. For example, someone wants to download a gated ebook that you’re promoting via display ads or content syndication. You may require them to fill out a form with their information, including name, job title, company, and contact information. The same goes for event attendance, webinars, free trials, and demos. 

Because this data is coming straight from the contact source, it’s usually clean and accurate. Sales can trust that it’s reliable to follow up with, as well as use it in advertising, email marketing, analyses, and more. Equally important, first-party data is safe to use from a privacy compliance perspective because your audience has consented to sharing it. 

The drawbacks? “We’re in the age of the Great Resignation and people’s addresses are constantly changing,” says Hussam AlMukhtar, senior director of strategic and partner marketing at ZoomInfo. “That’s only increasing the rate at which data is decaying.”

Additionally, this data only describes the pool of prospects that are currently interested in your company’s products or services. So while the audience is highly relevant, it’s still a small pool of people in relation to your total addressable market.

First-Party Cookies

First-party data can also come from a company actively collecting information about its website visitors. This means when somebody navigates to their site, a company deploys a cookie that stores some of the user’s information, such as language preferences, pages visited, and actions taken, to ensure a seamless, relevant browsing experience. For example, if someone came to your website and added an item to their shopping cart, a first-party cookie remembers that action and enables that person to see the cart’s contents on the checkout page.

“There’s a misunderstanding that cookies are bad,” AlMukhtar says. “Cookies can actually be a great thing for both the consumer and the marketer. They create a better experience for how the consumer interacts with a website, and the marketer receives the information they need to provide a more cohesive and attributable experience.”

This information also helps a marketer infer where the visitor is in the buyer’s journey — if they visit a blog versus the free trial page — and it signals their level of intent. In turn, this can help you personalize their website experience or determine which content is best to serve them.

Third-Party Data

Third-party data is collected from websites and sources other than your own. Unlike first-party, it’s not restricted to only those who have already shown interest in your company. 

The primary advantage of using third-party data is that it broadens your universe of prospects — including ideal customers who may not have heard of your solutions, or may even be interested in your competitors. Third-party data is also dynamic and consistently updated, while first-party data is primarily static. 

However, there are restrictions that come with using third-party data, particularly around privacy. AlMukhtar notes the consent basis in GDPR, the European Union data regulation: “Marketers now have to work harder to obtain a customer or prospect’s consent to acquire and process their data. That’s a big burden and limitation to how many practitioners actually work.”

The best way to access this large network of data without breaking any rules? Knowing where the rules apply, implementing best practices, and partnering with a trusted GDPR and CCPA compliant B2B data provider

Third-Party Cookies

Third-party data also comes in the form of cookies. Third-party cookies are similar to first-party cookies, except that they collect data about how users interact with websites other than yours, to help advertisers better understand consumer behavior. 

One of the primary advantages of third-party cookies is providing high-fidelity audiences for digital advertisers by allowing them to see a graph of consumers’ behavior across multiple digital properties as opposed to exclusively their own. This helps them map out that prospect’s interest and target them with the right message at the right time based on their behavior.

Retargeting is a good example of this. It allows marketers to target people who have landed on a specific digital property or a set of digital properties. The benefit? The more you understand your audience’s behaviors, the better you can cater your ad towards them, and the more efficiently you’ll spend your money. 

The Power of Combining First-Party and Third-Party Data

“It’s kind of a hedging game,” AlMukhtar says. “There’s a lot of trial and error, so you’d want to hedge your bets. That’s what you’re doing in combining first-party and third-party data.”

Using both eliminates a large portion of inaccurate data and increases your campaign’s efficiency. For example, if you have stored in your first-party dataset, your third-party data provider can help you enrich that dataset and get new qualifying (or disqualifying) data points. This information can help you increase the accuracy of your audiences and improve your odds of matching at a higher rate with the advertising provider.

“Volume is king,” AlMukhtar says. “First-party data is undoubtedly great, but it’s not enough because the law of averages needs volume. And digital advertising is all about the law of averages.” 

Even if you receive millions of website visits and thousands of form fills every day, you’re still tapping into a market that already knows you. As a marketer, it’s your duty to find the markets that don’t know you, and bring them to you. Third-party data accounts for those that are educating themselves on the problem they’re facing, but maybe haven’t come across your solution yet.

However, because of privacy concerns, third-party cookies have been a source of hot debate for many years now. Firefox and Safari have blocked the use of these cookies, and Google Chrome is following suit. They’ll begin to phase out in the second half of 2024, forcing marketers to find creative ways to take their products and services to market with privacy-conscious strategies.

Creating Data Strategies Without Third-Party Cookies 

According to Deloitte’s latest CMO survey, the phasing out of third-party cookies “has marketers more concerned about how they can effectively engage and manage customer privacy concerns, as they lean into acquiring first-party data instead.” 

More than 58% of marketers are planning to create a stronger data strategy to lawfully capture better information, according to Deloitte. So, what might these stronger data strategies look like? 

“My money is on better user experiences,” AlMukhtar says. “For the longest time, marketers captured information by gating assets and requiring anyone who wants to download it to provide their information. But now we need to create better experiences that allow the prospects to consume a little bit more. We need to give value as opposed to offer value.”

For example, rather than providing a landing page to a whitepaper that says, “Download this whitepaper and you’ll learn X, Y, Z” (offering value), let them read the first few pages and then ask for their information if they want to continue reading (showing value). 

Content marketers will need to ramp up their strategies to improve digital experiences that can result in a higher volume of quality data. More than 50% of marketers in the Deloitte survey plan to invest in innovations to engage with customers directly. Conversational marketing tools like chatbots are an excellent way to conduct intelligent engagement using both first and third-party data.

For example, ZoomInfo Chat identifies who is visiting your website and which company domain they’re using with our leading IP-to-Company data (third-party data). When the prospect lands on a given page, it will either ask a series of automated questions and record the prospect’s answers (first-party data), or if the chatbot identifies the prospect’s domain is from a high-value account, it will route the chat to the appropriate salesperson to take over the conversation. 

Directly asking a user how you can help them is an excellent customer-centric approach to collecting data and helping them reach the next best step in their buyer’s journey. 

A healthy balance of both first-party and third-party data is critical to a successful marketing strategy. ZoomInfo Marketing does just that. 

When you import your first-party data, we’ll update and append any missing information to ensure it’s as accurate as possible. With our demand-side platform, you can build and manage campaigns using our best-in-class third-party data while also layering in your first-party data on top — hedging your bets while remaining privacy compliant.