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Spoiler alert! What third-party vendors don't want you to know about first-party identity

Author: Laura Ballam

Identity is the difference between a great customer experience and a poor – or worse, negative – experience. Without customer identity you can’t really be successful, but for it to work right it must be done in a first-party manner.

Since most identity resolution vendors are third-party, they’ll try to tell you first-party identity is overrated, or that they can do better – but there’s a reason they’re saying “give us your data” and “do this for us” instead of “we’ve got you covered.” They can’t do it, won’t be able to do it, and are hoping their customers will add in their own elements to fill the gaps in their identity profiles.

That’s why we’re shining the light on 11 things vendors don’t want you to know about first-party identity.

First, let’s examine the difference between third-party and first-party identity. It follows the same logic as the different data types. Third-party data is data you buy or license from an outside vendor who’s not the original collector of that data and doesn’t have a direct relationship with the consumers whose data is being collected. They get it from other sources, aggregate it, and sell it to brands. First-party data on the other hand is data you collect and own yourself, directly from your customers – it’s collected from owned domains, platforms, and apps through your direct relationship with users.

The same concept applies to identity – first-party identity is captured, assembled, and owned by you. Third-party identity is built and owned by an external party or vendor. This difference is critical – with a third-party identity resolution platform you don’t own the data and have no control over it. You also don’t know the original source or have insight into the quality or cleanliness of the data.

Here are 11 truths your third-party vendors don’t want you to know about first-party identity:

  1. You have full ownership and control of the data, and the identity profiles that use it, which is critical to ensuring compliance with regulations and browser restrictions – not to mention being the right thing to do for your customers.
  2. First-party identity isn’t affected by crippling data regulations including Apple ITP, browser changes, IDFA, third-party cookie deprecation, CNAME restrictions - everything that’s designed to restrict third-party vendors and what they can do.
  3. It’s the only way to do real-time personalization. True real-time isn’t possible with third-party because you must wrangle the data first before you can use it. If you’re not getting the data in real-time, it’s impossible to action it in real-time. Building a first-party identity graph using the data you collect means you have all the data you need instantly, ready to go for real-time personalization.
  4. First-party data is low/no cost. Eliminating third-party providers and compilers saves money because you don’t have to pay for the data or spend your valuable data scientist’s time wrangling the data just to make it usable.
  5. It addresses the challenges of inadequate data by layering data from all sessions, over time and across domains and devices, into one definitive identity. No more bad decisions made from misleading profiles based on missing or incomplete values, inconsistent formatting, conflicting data, inconsistent collection, or biased sampling.
  6. First-party identity has unlimited use cases. Since it includes all the information you collect about your audience directly, the possibilities are endless. The insights you gather can be used to execute and optimize marketing and customer experience campaigns across multiple channels – from email and in-app content to loyalty programs, in-person experiences, and even product decisions.
  7. It generates deeper product and service insights. First-party data related to which products and services your customers are using, and how and where they use them, gives companies important details about their marketing efforts, products, and customers. Analyzing how customers use your products and services helps brands forecast demand, predict product appeal by customer segment, identify revenue-drivers, and understand sales trends by account, product type, season, or region.
  8. Using first-party identity enables stronger lookalike audience targeting for higher conversions and acquisitions. With a complete picture of customer identity, it’s easy to create a subsegment of profiles of your best customers including behavior, interests, preferences, what offers they respond to, etc. and apply that to new target audiences.
  9. It’s highly reliable. There’s no middleman – you know the source, and it’s collected directly from consumers, so it’s automatically accurate and current
  10. A first-party Identity graph unlocks more customer understanding than a basic third-party customer profile by casting a wider net in order to identify someone in a compliant manner as quickly as possible.
  11. First-party identity empowers data-driven marketing, taking insights from the data you’ve collected first-hand about your audience and applying them to create more impactful, cost-effective marketing programs.