Why Brands Are Focusing on First-Party Data

What's coming...

Chili’s has a stash of customer data. For each of its nine million loyalty members it has about 50 different points of data—one of them is total fajitas ordered. The impact of such a database is unparalleled, The company’s Senior VP of Marketing told WSJ reporters he credits the stash for curbing “major fallout” from Apple’s recent policy changes around privacy.

The near future of the internet is—well…already here. As anyone with an iPhone will know, Apple requires apps that track users to display a prompt with the option to “Ask app not to track.” Unsurprisingly, research shows only 4% of U.S. users “Allow” apps to track. Google is also driving towards a privacy-focused internet. By 2023 the company will remove support for today’s primary cross-site tracker, the cookie, from Google Chrome.

First party data is good for marketers

The change is a good one, even if it’s worrisome for marketers. It means the internet is shifting from an economy of data broker behemoths— think Facebook, Google—towards company collected, first-party data. Instead of Facebook selling individualized browsing data, people will be aware of when they’re sharing data. As a result, companies who have the capacity to collect info via their own channels will receive data that’s higher quality, more specific, and directly actionable. 

Chili’s has the ability to target people similar to those who eat lots of their fajitas instead of having to depend on Facebook’s idea of who might like them. When companies advertise using their first-party data they also see lower spends. PepsiCo reports having shifted the majority of its North American ad targeting to first party data for the tens of millions of dollars it saves the company.

First-party data has always been valuable, but with the growing concern over internet privacy it will only become all the more critical. A major component in the equation will be methods of harnessing that data, whether through a community site, loyalty program, sweepstakes or another of the many creative solutions we will begin to see companies develop.