What Is First-Party Data Onboarding—and How Does It Work?

Back to Blog 04/11/2024 - by Kyle Malone

No matter how many times Google delays the deprecation of third-party cookies on Chrome, today’s marketers cannot ignore the urgent need to get their data strategies in order for a privacy-first digital landscape. Going forward, brands and agencies are going to be held to a higher standard in terms of how they collect, manage, and leverage data for the purposes of personalizing marketing and finding new customers.

In a cookieless world, the process of first-party data onboarding will take on greater importance than ever. In this guide, you’ll get a complete overview of first-party data onboarding: what it is, why it’s important, its benefits, and how you can incorporate it into your larger marketing strategy.

What Is First-Party Data?

First-party data (often abbreviated as 1PD) refers to the information that a company collects directly from its customers, website visitors, or users. This data is gathered through interactions such as purchases, subscriptions, website visits, and social media engagement that occur directly between the company and the consumer. Unlike second-party or third-party data, first-party data is owned and controlled by the organization that collected it, making it a valuable asset for businesses. It includes details like customer behavior, preferences, purchase history, and demographic information.

Examples of First-Party Data

First-party data is defined by the way it is gathered rather than the information itself, meaning it can take a variety of forms. Some of the most common examples of first-party data include:

Demographic Information: Age, gender, income level, education, and occupation.
Geographic Information: Location data such as city, state, country, or even more precise GPS data.
Behavioral Data: User interactions on websites or apps, including pages visited, time spent on pages, and actions taken (like clicks and conversions).
Transaction Data: Purchase history, amounts spent, frequency of purchases, and product preferences.
Device Data: Information about the devices used to access services, such as mobile phones, tablets, or desktop computers, including device type, operating system, and browser type.
Social Media Engagement: Likes, shares, comments, and direct interactions with brand posts.
Customer Feedback: Data collected through surveys, feedback forms, and customer service interactions.
Email Engagement: Open rates, click-through rates, and interaction times from emails sent to customers.
Loyalty Program Data: Participation details, points earned, and redemption behavior.
Subscription Data: Information from newsletter sign-ups or other subscription services, including start dates, preferences, and opt-in details.

What Is First-Party Data Onboarding?

Data onboarding is the process of transferring offline data to an online environment for marketing purposes and further analysis. This has historically involved matching offline customer records, like those collected in-store or via phone, with online identifiers such as cookies or mobile IDs. The goal is to create a comprehensive digital profile that can be used for more targeted and effective digital advertising and customer relationship management.

When speaking specifically to first-party data onboarding, this refers to the process where a company takes its own collected offline data—such as customer names, email addresses, and transaction histories—and integrates it into digital marketing platforms. This allows the business to leverage its first-party data in online environments, enabling personalized marketing campaigns across the web and enhancing customer experiences.

How Does First-Party Data Onboarding Work?

First-party data onboarding typically involves several key steps. While the precise process might vary by onboarding platform, here’s an overview of the process:

Data Collection: Businesses collect first-party data directly from their customers through various channels, such as physical stores, call centers, websites, apps, and customer surveys. This data may include personal information, transaction details, and behavioral insights.
Data Preparation: Before uploading the data to an onboarding platform, it needs to be cleaned and formatted correctly. This involves removing any inaccuracies, duplications, and incomplete records to ensure the data quality is high.
Uploading to the Onboarding Platform: The cleaned data is uploaded to the data onboarding platform. Platforms that prioritize privacy will ensure that this data is encrypted and securely transferred. To protect customer privacy, personally identifiable information (PII) such as names and email addresses are converted into hashed IDs, transforming the original data into a unique string of characters that cannot be reversed to reveal the original information. This step is crucial for maintaining privacy.
Matching: The onboarding platform uses algorithms to match the hashed offline data with online identifiers (like cookies, mobile device IDs, alternative identifiers, etc.). This matching is typically done using privacy-safe methods to ensure that no personally identifiable information is exposed.
Activation: Once matched, the now-online data can be used across digital marketing platforms to create targeted advertising campaigns, personalized customer experiences, and more efficient customer relationship management strategies.

Choosing a secure and privacy-compliant onboarding platform is essential to ensuring that the data transformation process adheres to legal standards and ethical practices, safeguarding customer information from misuse and breaches.

What Is Identity Resolution?

Identity resolution, a topic that often comes up in the context of first-party data onboarding, refers to the process used in marketing and data management to consolidate multiple identifiers across devices and platforms into a single, cohesive profile of an individual customer. This is done by collecting various data points from different sources and devices—like email addresses, device IDs, social media profiles, and online behavior—and linking them together using various algorithms and data science techniques. The outcome is a unified view of a customer that reflects all their interactions with a brand, providing a comprehensive understanding of their behavior and preferences.

Identity resolution is an important part of first-party data onboarding, which aims to integrate all offline and online data to create a full picture of customer identity. The core of identity resolution lies in the data-matching process.

During onboarding, the platform uses the prepared offline data to match it against online identifiers (like cookies, mobile ad IDs, and a growing array of alternative identifiers). This matching process is where identity resolution technologies come into play, as they must accurately connect multiple identifiers to a single user profile, regardless of the source or device. Once matching is complete, the unified data creates comprehensive profiles that represent each customer’s interactions across all touchpoints.

Why Does Identity Resolution Matter?

Identity resolution plays a crucial role in multiple aspects of business, marketing, and data security, including the following.

It helps personalize messages across channels: By accurately identifying users across multiple platforms, companies can deliver consistent and personalized messaging to improve customer relationships and more effectively woo prospects.
It creates better data for decision-making: Reliable identity resolution consolidates user activities and behaviors into a single profile, providing high-quality data that supports more informed and effective business decisions.
It improves security by making it easier to identify fraudulent users: By verifying and tracking identities across systems, identity resolution helps in detecting anomalies and preventing unauthorized access, thereby reducing the risk of fraud.
It enhances customer experience: Identity resolution ensures that users receive a seamless and continuous experience across different services and touchpoints, which can lead to higher customer loyalty and retention.
It facilitates better analytics and insights: Integrating identities across various platforms and devices leads to richer datasets, enabling deeper analysis and more precise insights into user behavior and preferences.

Protecting Your First-Party Data Through Encryption and Authentication

The value of data—particularly first-party data—cannot be overstated. Some have even likened it to the “new oil of the digital economy.” For that reason, brands must ensure they’re not taking this asset for granted and are doing everything possible to protect it. That means employing strong processes and tools for encryption and authentication.

What Is Encryption?

Encryption refers to the process of converting sensitive information collected directly from customers into a secure format that only authorized parties can access. This ensures that even if the data is intercepted or accessed without permission, it remains unreadable and protected. By using encryption, businesses safeguard their customers’ privacy, comply with data protection regulations, and maintain trust by preventing unauthorized data breaches.

What Is Authentication?

Along the same lines, authentication is the process of verifying the identity of a user before granting access to sensitive information. This ensures that the person attempting to access the data is who they claim to be, protecting against unauthorized access and potential data breaches.

How Do You Use Encryption and Authentication for First-Party Data?

Together, encryption and authentication form a robust security framework that preserves the integrity and confidentiality of first-party data, ensuring compliance with data protection regulations and maintaining customer trust.

Encryption involves encoding the data so that it can only be accessed or deciphered by someone with the proper decryption key, typically only those within the organization who need it to perform their job duties. For instance, a business might encrypt customer data such as personal details, transaction histories, and browsing behaviors before storing it in their databases. This not only secures the data at rest but also when it’s transmitted over networks, preventing unauthorized access during data breaches or intercepts.

On the other hand, authentication is used to ensure that only authorized users can access this encrypted data. When a user or an employee attempts to access the system, they must prove their identity through various methods like passwords, biometrics (e.g., fingerprint or facial recognition), or multi-factor authentication, which might include a combination of something they know (a password), something they have (a smartphone or security token), and something they are (a biometric feature). This layer of security verifies the identity of users before they can interact with sensitive first-party data, effectively minimizing the risk of unauthorized data exploitation.

How Do You Create a First-Party Data Strategy?

A strong first-party data strategy will look a lot different than a strategy built on third-party data. As organizations look to improve their approaches to first-party data, here are some key steps and tips to keep in mind.

How to Build and Improve First-Party Data

If you’re looking to build or improve your organization’s first-party data, you’ll want to focus on the following key steps.

Implement user-friendly data collection methods: Optimize your website and apps to make data submission as intuitive and seamless as possible for users.
Enhance data quality with validation tools: Use automatic validation to ensure the accuracy and completeness of the data collected from users.
Offer value and incentives for data sharing: Encourage customers to share their information by providing value in return, such as exclusive content, discounts, or membership perks.
Look for new opportunities: Above all, advertisers must prioritize the collection of first-party data when planning. Whether through gated content, lead-gen forms, newsletter subscriptions, incentives, surveys, or engagement-based creative, always be looking for new ways in which your brand can acquire deeper customer data and insights.

Activating First-Party Data

Activating first-party data across marketing channels such as display advertising, connected TV (CTV), social media, and others requires a strategic approach to ensure that the data is used effectively to enhance engagement and optimize campaign performance. The first step is to integrate this data into a centralized marketing platform or a customer data platform (CDP). This allows for the aggregation of diverse data sources, providing a unified customer view that can inform targeted marketing strategies.

Once the data is centralized, the next step is to leverage automation and machine learning tools to segment this data effectively and craft tailored messages for each segment. For instance, in social media marketing, first-party data can be used to customize content, offers, and messages that resonate with individual user preferences and behaviors. Furthermore, lookalike modeling can be applied to expand reach on platforms like Facebook and Instagram by targeting new users who share characteristics with existing customers.

Best Practices for First-Party Data

Finally, here are some best practices for maintaining first-party data effectively:

Regularly refresh the data: Ensure that your first-party data is current by routinely revisiting and refreshing the information to keep it relevant.
Segment the data effectively: Analyze and divide your data into meaningful segments—such as new customers, loyal customers, and lapsed customers—to tailor marketing efforts and increase engagement specific to each group.
Enforce strict data quality controls: Implement processes to clean and validate data regularly to avoid errors and ensure accuracy.
Ensure data privacy compliance: Stay compliant with data protection regulations (like GDPR or CCPA) by continuously monitoring and updating your data handling practices.
Leverage technology for better data management: Use advanced data management tools and platforms to automate data collection, integration, and analysis, enhancing efficiency and reducing the likelihood of human error.

Do you have questions about the importance of first-party data onboarding for your brand? We’re here to help. Let’s talk about what Digilant can do for you.