1st Party Data – How Does It Support Our PPC Ads?
A few years ago, the concept of “1st party data” burst into the public consciousness. But what exactly does this term mean?
“1st party data” refers to data collected directly from customers by a company. This includes customer information such as name, email address, phone number, purchase history, and behavioral data. 1st party data is valuable for companies because it allows them to better understand their customers and create more personalized marketing campaigns.
The ability to collect and utilize 1st party data will be crucial for all advertisers using online advertising in the coming years. This is due to the diminishing use of third-party cookies, which previously supported the functioning of online advertising. These cookies are now being increasingly restricted by device manufacturers (e.g., Apple) and web browsers (e.g., Firefox, and eventually Chrome). So, if we want to advertise effectively and measure results accurately, we need to leverage 1st party data in our online advertising accounts.
Therefore, 1st party data is key to:
- Gaining a competitive advantage over competitors (our 1st party data is our own asset, not accessible to others)
- Understanding our best customers and improving the precision of our ad targeting
- Informing business decisions and strategies
- Supporting machine learning, the magic engine behind PPC advertising.
(Third-party cookies are small pieces of information placed on our devices by companies or providers other than the website owner. These cookies help these companies track our online activities, such as the websites we visit and the content we’re interested in. This data can be used to enhance ad targeting and personalize online experiences.)
It’s high time to familiarize ourselves with the possibilities of using 1st party data in Google and Facebook ads, as well as other PPC advertising platforms.
Why Is 1st Party Data So Valuable?
The true value of 1st party data lies in the fact that we have explicit consent and lawful basis under GDPR to handle the personal data of individuals from whom we possess 1st party data (e.g., email addresses, phone numbers). This enables us to directly reach them with our marketing messages.
For example, if someone has provided us with their email address and consented to receiving email newsletters, we can directly engage them with such content.
Well-collected and used 1st party data is an incredibly potent marketing tool. Why? Because when we can reach individuals directly, we don’t need to rely on external advertising systems (like with third-party cookies, typically owned by platforms like Google or Meta).
Personal data is invaluable.
Amidst the ongoing technical changes, such as the diminishing importance of third-party cookies and the rising significance of 1st party data in the era of data privacy, understanding and effectively using 1st party data are becoming paramount.
How Can We Obtain 1st Party Data?
We primarily obtain 1st party data by obtaining explicit consent from individuals to manage their personal data.
For instance, if we operate a blog on our website, offering interesting and valuable content to visitors, we can sign them up for newsletters by collecting their email addresses, allowing them to stay informed about fresh content.
Similarly, those submitting quote request forms typically need to consent to the handling of their personal data according to GDPR, enabling our sales colleagues to contact them directly.
How Does 1st Party Data Help Our PPC Campaigns?
The application of 1st party data in PPC ads aims to make our result tracking more comprehensive and our ad targeting more accurate. Through these, we gain a competitive edge over other advertisers, including our direct competitors.
Enhancing Result Accuracy:
With the phasing out of third-party cookies, both Google and Meta advertising systems offer opportunities to supplement our result tracking based on advertising cookies on our website. How?
If we run Google ads, we can measure valuable interactions stemming from our online ads (like form submissions or purchases) using Google Ads conversion tracking. If a visitor rejects advertising cookies, our result tracking doesn’t work (on the browser side, via third-party cookies).
How can we still signal the advertising system when a significant event occurs on our website? For instance, by employing “enhanced conversions,” attaching 1st party data (email address, phone number) to result tracking. We use data given by users through contact forms or online shop orders. This shifts our result tracking from being solely third-party cookie-based to 1st party data-based.
By setting up “enhanced conversions,” we can prepare for the anticipated phasing out of third-party cookies in the Chrome browser in 2024.
Similarly, with Meta, there’s a special match feature resembling Google Ads’ enhanced conversions, linking 1st party data to our Meta event tracking.
Sharper Ad Targeting:
Both Google and Meta advertising systems allow for the uploading of customer lists.
This entails uploading data of users who have become customers to the advertising system (upon upload, it’s immediately encrypted or hashed, making it no longer personally identifiable data according to GDPR).
In the Google Ads system, we can use the uploaded customer list as a signal for certain campaign types, like Performance Max campaigns. This shows the system a sample of users we want to target with our ads. This sample isn’t based on cookies but rather on 1st party data (future-proof, from our own database).
With Meta, we can similarly upload a customer list and create a lookalike audience, aiming to target users similar to those on our list.
Important: Instead of uploading a list of leads or newsletter subscribers, we should upload a list of paying customers or those who have become buyers. This enables us to target users similar to our paying customers, not those who only engaged with our free content.
Personalized Ads:
According to Forrester, 80% of users prefer to buy from companies offering personalized experiences.
Collecting our own data is crucial for highly personalized ad experiences. If we know what content a user is interested in on our website, we can determine how to address them in ads.
Other Use Cases of 1st Party Data:
Apart from PPC ads, there are many other areas where we can use 1st party data. If we have suitable 1st party data, we can directly reach potential customers through email marketing, SMS marketing, or other direct marketing activities.
In Summary
The value of 1st party data is rising, and it’s an essential element in effectively reaching potential customers. It’s no coincidence that major FMCG companies and internationally recognized brands prioritize collecting and effectively using 1st party data in their marketing activities.
Let’s take inspiration from this and responsibly collect personal data in compliance with GDPR, utilizing it intelligently across our entire marketing efforts.
Make our PPC ad result tracking and targeting more precise by harnessing 1st party data consciously, and get ahead of competitors in this area as well.