First-Party Customer Data vs. Cookies

06.12.2022 Angelika Siczek
thinking man

The distinction between first-party, second-party and third-party data is important for the purposes of running effective advertising campaigns in e-commerce. All these types of data are of practical relevance to many businesses today. This data is used to improve advertising activities in the e-commerce industry and can influence business decisions in the area of online sales of products and services.

Types of data used in the world of e-commerce

1st party data activation occurs as a result of the company’s interaction with the environment. This data plays a key role in decision-making in advertising campaigns and in shaping the development of products and services in e-commerce.

Second-party data refers to data collected by other companies linked to the primary organisation, most often business partners in the supply chain, related companies or subsidiaries. It is often the result of analyses from previous advertising campaigns.

Finally, third-party data does not arise as a result of a direct organisation-client relationship, but is collected by companies from outside and made available to interested organisations through dedicated platforms. This data mainly relates to information on the demographic, behavioural and psychographic characteristics of potential customers.

1st party data – definition

In the definition of 1st party data, it is important to emphasise that these are data created as a result of direct interaction between the organisation and its customers. Such data include all those collected and used for the development of the company. 1st party data examples are:

  • data describing customer profiles and behaviours (both purchase and purchase abandonment);
  • data from computerised content management systems (CMS) and customer relationship management systems (CRM);
  • data generated as a result of customers visiting the company’s website;
  • ata received by the organisation through the collection of customer surveys;
  • data generated through the operation of the company’s call centre;
  • data generated by tools such as Google Analytics or Google Serach Console (1st party data Google Ads are particularly popular)
  • data from transactional systems;
  • data used through the shop’s loyalty programme;
  • specific leads, such as e-mail addresses, telephone numbers and company contacts to existing customers (e.g. mailing lists);
  • data resulting from interactions with the company via social media (for example, purchases made by the shop on Facebook).

 

1st party data sources are diverse, unique to the company, completely free and therefore crucial for online marketing. Such data are sources of information that have emerged from interactions between the company and its customers (actual and potential). The entrepreneur can control changes to his or her content on, for example, the company website or social media profiles. 1st party data allows the company to adapt more effectively to the expectations, needs and interests of its customers.

1st party data marketing concept

1st party data creates the basis for the implementation of more advanced activities known as 1st party data marketing. Companies manage first-party data in order to more effectively tailor online advertising strategies to the needs and expectations of customers. Online marketing advertising activities contribute to the creation and effective management of the company data ecosystem. This data offers extensive opportunities to strengthen customer relationships through owned media. Entities in many industries use 1st party data to formulate marketing objectives for effective customer service.

Cookies – importance in online marketing

Cookies are nothing more than files, fragments of data from a website, which are stored in a web browser and can be retrieved later by the website. When users return to the website, cookies provide information and allow the website to display selected settings and personalised content. Cookies remember the user’s preferences on the website, as well as where the user accessed the website from (this could be, for example, a direct visit to a company website, clicking on an advertising banner or being redirected from a partner website). Cookies store information such as the contents of the shopping cart and login data. Cookies are used in today’s online advertising campaigns to more effectively personalise advertising to different user groups.

Differences between first-party cookies and third-party cookies

It is important to distinguish between first-party cookies and third-party cookies in online marketing practice. First-party cookies are data about users visiting a website at a given time, created by the host domain. This data is defined as own cookies, which are stored directly by the visited website (or domain). Why is this data important? Because allow website owners to collect analytical data, remember language settings and other useful functions for advertising and product improvement.

Third-party cookies, on the other hand, are created by domains other than the one the user is currently visiting. They are mainly used to track the behaviour of internet users for advertising purposes. Third-party cookies are available on any website that loads the third-party server code. It is worth mentioning that Google has pledged to disable third-party cookies in its browser in 2023, in order to comply with legal obligations to guarantee greater privacy for internet users.

 

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