Marketing leaders can hardly escape all the talk about first-party data today: the need to focus on first-party data, to capture it, activate it and drive marketing transformation. When it comes to the why the answer is almost always, “Because you have to,” backed up by warnings about the shift to privacy, the cookieless future, etc.
But nobody ever got to the top by simply following what others tell them they have to do.
The trust is first-party data isn’t a next-best alternative — it’s the fuel that’s been driving the most innovative and customer-obsessed brands for the last two decades. Moreover, it’s proven to boost marketing value and create business advantage. That’s the call to action.
First-party data “natives” dominate every segment
A first-party data-first approach gets framed as a new phenomenon. But look at the brands we look up to across every segment: their commonality is that their greatest asset is the data they collect about their customers. First-party data “natives” like Amazon and Netflix have had this mindset for the past two decades — and they’ve risen to the top exactly because they are first-party data-first.
Let’s take a look at a few examples:
- Entertainment: We all know that Netflix collects robust data about our viewing patterns and preferences in order to deliver predictive and assistive experiences that keep up glued to the screen. Every social media app is built on similar algorithms, and TikTok rapidly became the most-visited site/app on the planet with its infamous algorithm that keeps users watching content for hours every day.
- Retail: Stitch Fix was an early innovator of the personalized retail experience, asking customers to complete a detailed survey and then using that information to send tailored outfit options. Prose Cosmetics has surged to the top in their space with a similar customer intake survey that’s used to create customized products. And of course, Amazon was perhaps the first to fully capture the potential of building an intelligent, personalized product recommendations engine.
- Not-for-Profit: It may surprise some to hear that some not-for-profit (NFP) organizations have been at the leading edge of first-party data strategy for years now. For example, Unicef USA captures information on which of its core “mission” (i.e., clean water or women’s education) a user browses — and then serves up personalized marketing communications and content recommendations to drive engagement and donations.
These organizations might not think of themselves as “first-party data brands.” But they would all agree that their customer data is their currency and greatest asset — and they all use this first-party/customer data as the foundation for their unique customer experience and strategic long-term advantage.
Now, every brand feels pressure to become first-party data first
The majority of brands have been chasing these first-party data natives with what has been viewed as a “shortcut”: buying easily and cheaply available third-party data to drive personalized customer experiences. But today, those brands feel themselves squeezed by two major market pressures:
On the one hand, there is the need to be “customer obsessed.” Those experience leaders we already mentioned and all look up to continue to push expectations for hyper-personalized, hyper-relevant, predictive, assistive and completely seamless experiences — and consumers now judge every brand by these constantly rising standards. Where first-party data strategies might have been the secret sauce of the very best brands a few years ago, it’s now clear that every brand needs to adopt first-party data strategies in order to meet a bare minimum for what consumer’s expect today.
At the same time, the drive towards privacy, the looming cookieless future and disappearance of other third-party data sources is forcing marketers to change how they achieve personalization.
The privacy shift is also exposing an ugly truth about the way most marketing programs have approached personalization for the last decade: We’ve all been drawn to the thrill of leaning on external data to tell us more about our customers. We want Experian, Google, etc. to tell us all about who are customers are, what they like, what they believe, etc. But it’s not that third-party data provides more actionable or more valuable insights. The reason most brands have gone the third-party route is because it’s much easier to ask external partners to tell us about our own customers (or, more specifically, to pay them for their data) than to put the tools and strategies in place to listen directly to our customers and get that information straight from the source.
Viewed this way, the converging pressures of customer obsession and data privacy are ultimately generating the right behavior: forcing all brands to adopt the first-party data-first approach that their leading peers have used all along.
Scarcity/urgency mindset is the wrong place to start
So, let’s recap where we’re at: Cookie deprecation and privacy pressures mean third-party data isn’t a viable path forward. Every brand needs to focus on first-party data to compete with CX leaders — and those that don’t will rapidly be left behind by demanding consumers.
But the scarcity or urgency mindset is a fundamentally bad place to start a major organizational change like marketing transformation. “Because we have to” is pressure without purpose. And that makes it far too tempting to find workarounds and stop-gap solutions that are ultimately unsustainable. Pressure without purpose also makes it much harder to gain buy-in, get budget and build the momentum needed for successful marketing transformation.
Put simply, it’s harder to win when your heart’s not in it. Brands need to look beyond the urgent pressures to see the bigger business value of the first-party data-first approach.
First-party data transformation is about growth
Instead of scaring brands and marketing teams into change, what if we recognized that first-party data was actually the key to better, faster customer insight? What if first-party data strategies could drive cost savings and other efficiencies? What if you knew your marketing team could increase media ROI and expand your effectiveness? What if you could prove, unequivocally, that activating your own first-party customer data could directly drive growth and give you a clear competitive advantage?
Clearly, the anecdotal examples of market leaders like Netflix, Stitch Fix and Unicef suggest this all to be true. But in fact, plenty of research demonstrates that organizations that embrace their own data and/or have a high level of digital marketing maturity see major, measurable results: They see double-digit increases in revenue, double-digits savings, and are 2x times more likely to increase their revenue share — in other words, they grow twice as fast as they’re competitors, surging to the front of their markets.
Winners play to win — not to avoid losing
The core takeaway here is that the first-party data shift isn’t about making the best of things — it’s about generating better insight and more marketing value, faster. It’s not a “because we have to,” it’s a powerful strategy to build competitive advantage. The mindset can’t be defensive — it needs to be offensive.
Because winners play to win — not to avoid losing. Marketing leaders need to eagerly and confidently embrace first-party data as the fuel for aggressive growth. Because winners play to win — not to avoid losing.
