There’s no denying that the past year has changed how we interact with and to our customers. First, Google stopped allowing third-party data to be collected. Then Apple announced changes to iOS14’s permission features for app builders. This one-two punch sent a lot of companies— and marketers especially— into a frenzy for the first few months. But necessity is the mother of invention. The cowboy era of data is over, but it hasn’t stopped marketers from getting creative.
Data Collection Used to be Simpler. But at What Cost?
Mobile devices produce vast amounts of personal information and data, ranging from history, calls, and text interactions. Apps need access to all user data stored in the iOS database to function correctly. As a result, apps are at the center of debates about privacy concerns in the digital age. 90% of app users indicate that having clear information about how apps will use their data is essential.
Previously, Apple used iPhone Identifiers for Advertisers, IDFAs, to track people’s movements online and collect their data. IDFAs are a random set of numbers that are linked to your iOS. It informs people, like advertisers, what type of device you use and how to tailor messages and advertisements to your interests. For years, IDFAs have tracked user data without most people knowing (or approving). As consumers became aware of this covert data collection, there have been calls for more regulation around how data is collected, sold.
New, stricter forms of permissions access are on the rise to enhance privacy and user trust.
iOS14, which was launched in June 2020, changes everything. With iOS14, users choose to opt-in to sharing data rather than being automatically tracked. When we think of data and the practices around how it is used, that is a massive paradigm shift. A shift that’s made marketing difficult but has boosted user trust.
Why the Big Change? Building Users’ Trust.
According to Google, most people don’t trust companies who gather their data through third-party cookies. In a study conducted by Pew Research Center, “72% of people feel that almost all of what they do online is being tracked by advertisers, technology firms or other companies, and 81% say that the potential risks they face because of data collection outweigh the benefits.”
Apple and Google listened to these findings and took steps to remove support of IDFA’s and third-party cookies.
Data Tracking and Transparency 101
Now that Apple has begun implementing these feature changes across the board for all industries, Google piggy-backed on this movement to end its use of third-party data. But, to understand what third-party exactly is, you need to know what first and second-party data are as well.
First-party data is information directly collected from your audience and customers. It is information based on how they interact with your website: behaviors, actions, and interests. For example, if someone visits your Tea and Teapot Shop monthly for your Earl Grey blend, you bet that they’d be interested in an Earl-Grey-specific teapot. To make this connection, you would have to be familiar with the user’s data profile. Thankfully, first-party data makes this possible. It is everything collected and controlled by the website.
Unlike third-party data bought from other companies, first-party data is collected for free from your sources.
Second-party data is essentially another company’s first-party data that is exchanged or sold. It is data that comes directly from their sole source: their audiences and customers.
Where third-party data is aggregated from various sources to compile a customer’s comprehensive analysis, second-party data is accumulated through specific deals between companies.
What exactly is Third-Party Data, then?
Cookies, or HTTP Cookies, are small bits of information stored on your computer by your web browser. These snippets of text make all website visits more personalized. For example, when you type Amazon.com into the search bar, you may be automatically logged in thanks to cookies.
Now, company websites that have cookies enabled need to ask the users to use their information to abide by privacy laws.
What Does This Type of Data Tracking Mean for Marketing?
Even though third-party data’s wild west days are over, we still have first-party data.
Historically, first-party data hasn’t gotten nearly as much use as third-party data. That’s because third-party data made it very easy to create a comprehensive profile on a user by tracking all their movements online, where first-party data only looks at how a user interacts with your site.
Now that companies are not allowing for this data wrangling, marketers have been looking at first-party data in a whole new light. Forced to turn to our own devices for insight, people are discovering innovative ways to look at this information.
It’s Time to Put Your First-Party Data to Work
Even after third-party data is long gone, first-party data will still be around, so it is paramount that you understand your first-party data and how to put it to work. This data is a vital part of the ecosystem for building a robust organic foundation of customers.
We have all the tools in our belt to build a better platform for understanding our customers. We have information on what they shop for, how often they come back, and how they shop. By focusing on the unique interactions between customers and products, we can build better relationships.
Trust us. iOS14 is a step in the right direction.
A significant step towards trust and privacy does not mean that customers will always have unrelated and irrelevant advertisements. It simply gives the users power to decide how, where, and when their data is used. Although iOS14, first and third-party data may seem confusing, it’s not much different than what we’ve been doing before. Accumulating data is the first step to creating scalability and customer insights.