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First-Party Data Vs. Third-Party Data: How Privacy Concerns May Affect The Future Of Your Influencer Marketing Program

first-party-data-vs.-third-party-data:-how-privacy-concerns-may-affect-the-future-of-your-influencer-marketing-program

Over the past few years, marketers have begun to rethink how they gather information on their audiences as major web browsers start to phase out third-party data due to privacy concerns. 

Many have placed a renewed focus on influencer marketing as a strategy to reach hyper-targeted audiences and create a more personal experience for their ideal customers. While influencer marketing can thrive without the use of third-party data, it is not wholly unaffected—especially when it comes to discovering brand-aligned creators. 

Let’s take a look at how marketers currently use various types of data (including first-party data vs third-party data) and what a transition into an exclusively first-party strategy means for the future of the creator economy. 

Understanding the different types of data

What is first-party data?

First-party data is user data collected directly from your audience, including your customers, website visitors, or social media followers, based on online interactions with your brand through various touchpoints. In a nutshell, it means you are the “first party” to obtain the unique data and have done so with the user’s permission. 

First-party data can include:

  • Audience demographics
  • Data in your CRM
  • Social media conversations
  • Survey data
  • User reviews and feedback
  • Purchase history
  • Subscription-based products and communication

What is second-party data?

Second-party data is behavioral data shared between companies. Second-party data usage is usually rare and will not apply to most organizations. 

What is third-party data?

Third-party data is any data acquired from a source without a direct relationship with the user they are collecting data from. Generally, this data comes from multiple sources and is compiled into a single set before being bought and sold through a data marketplace or exchange.

Some examples of common third-party data include:

  • General info (name, email address, phone number, etc.)
  • Business info (list of a company’s employees and their roles)
  • Internet browsing habits
  • Life events 
  • Hobbies
Stylized illustration of three people in a network symbolizing first-party data vs third-party data

Why are brands shifting from third-party data to first-party data?

In 2020, Google announced its two-year plan to phase out third-party cookie data on Chrome. The following year, Apple also released new privacy features in its iOS 14 update that allowed its Safari web browser to block cookies and prevent advertisers from tracking users’ web habits. 

Third-party cookies are essentially digital trackers placed on a user’s hard disk by a website other than the one they are visiting. The information obtained through third-party cookies can be sold to other entities for marketing purposes and has been widely criticized due to perceived privacy concerns. 

In the United States, roughly 86% of marketers relied on third-party cookies to some extent in 2021. For now, Google’s plan to eliminate third-party cookies has been pushed to 2024. However, many companies have already begun experimenting with strategies to collect first-party data to prepare for the shift and comply with General Data Protection Regulations, CCPA, and other recently enacted privacy laws. 

The transition will surely include growing pains in the beginning. However, first-party cookies will likely benefit marketers in the long run. Some of the perks of using first-party cookies include:

Create a more personalized experience.

Because first-party data comes from the most trustworthy source (directly from your own users and customers), you can tailor a personalized experience that you know will appeal to your target audience. And because every consumer is different, leveraging first-party data enables you to provide each one with relevant information to make their entire customer journey feel like you made it specifically for them.  

Improve targeting.

First-party data is collected from direct interactions, meaning your chances of successfully targeting and retargeting consumers increase. Because these consumers have already shared information relevant to their buying experience, like cart history, surveys, membership information, etc., you can segment audience lists and really dial in on specific audiences. 

Offer more privacy.

Many consumers feel uncomfortable being tracked by an unknown third-party—even if it serves them relevant information that can improve the user experience. By eliminating third-party tracking, your audience can rest assured that, with their permission, you will be the only one to monitor their activity on your website. 

Reduce costs. 

Cutting third-party data means you won’t have to pay anyone to gather your marketing data for you. While first-party data might take more time and effort to accumulate, it will be easier on your bottom line overall when you don’t have to deal with a middleman. 

How to collect first-party data

Registration

One of the most common strategies for collecting first-party data is to ask users to register before using your site or service. The registration can include basic questions about the user that you can leverage to improve their experience as they interact with your website. 

OAuth

OAuth asks users to sign in using an existing account like Google or Facebook. This strategy lets users sign in quickly without creating a separate account for your website or service. It also allows you to access certain information from their existing account—including demographics, interests, etc.— and pull insights without needing access to a user’s platform. 

Surveys and polls

Surveys and polls can help you gather basic information about what users like and dislike about their experience with your website, brand, or products. These results will give you a better understanding of where you stand with your target audience and what steps you need to take to improve brand sentiment. 

Customer feedback and reviews

Similar to polls and surveys, customer feedback and reviews can help you gauge how well-received you are by your audience. You can also ask for some basic information to fill out a review, so you know how that sentiment differs by age, location, etc. 

QR codes

Putting QR codes on your packaging is a great way to get consumers to engage with your brand on their phones. Just make sure you incentivize them to input their phone number, email address, or other relevant information so you can easily retarget them in the future.

How does GRIN collect first-party data?

GRIN uses an OAuth method to gain access to creator data—with their consent—from a social media network’s API. This data only includes insights and information necessary to help brands determine creator success metrics and does not include any of the creator’s personal information. 

As of Oct. 1, 2022, GRIN began removing third-party data and the features it powered to remain compliant with updated terms from Meta and provide more accurate data to customers.

First-party data’s role in influencer marketplaces vs. open networks

What is an influencer marketplace?

Influencer marketplaces are spaces where creators can make themselves available for partnerships. These marketplaces utilize some first-party data to provide marketers with performance metrics for creator search, but third-party data is often required to supplement any shortcomings. For now, these marketplaces provide a detailed overview of their creators, although it remains to be seen how effective they will become as the third-party crackdown continues.

Those leveraging these marketplaces only have access to creators who have opted in, giving them a limited (and competitive) talent pool to choose from

For example, say you’re looking for creators who identify as female, live in Wisconsin, and love sports. You add the filters into the search bar, cutting your influencer database of 50 million to a narrow pool of creators in which every other brand in your space is fishing.

In other words, creator search is often useless for brands looking to target consumers in niche audiences. And to avoid the headache, many marketers have already begun to ditch the function altogether and replace it with more organic creator discovery methods. 

Pros

  • Brands gain convenient influencer recruiting.
  • Outsource influencer search and discovery.

Cons

  • The “influencer-for-hire model” is inauthentic. 
  • Most experienced creators aren’t concerned with joining multiple databases. 
  • Marketplaces prioritize follower count over engagement.
  • Most creators have little to no brand affinity.
  • Many marketplaces are overrun with bots. 

What is an open network?

GRIN’s open network focuses on building trust with authentic creators and their audiences. With an open network approach, brands can communicate with any creator directly across all platforms and ask them to grant permission to first-party data after both parties determine their mission and values align. 

Pros

  • Build relationships with creators who genuinely love your product.
  • Generate effective and authentic content.
  • Reach highly engaged audiences. 
  • Brands get more control over the creator relationships.
  • Easily maintain long-term relationships with high performers. 
  • Work with a limitless creator talent pool. 

Cons

  • Searching for creators may take more time and effort from brands when done manually. 
  • It can be difficult to scale without an influencer relationship management platform.

Pro tip: Download GRIN’s free Web Extension to analyze creator accounts natively (and import prospects directly into your GRIN CRM). 

What does eliminating third-party data mean for the future of influencer marketing?

Influencer databases have thrived off of the idea that the perfect creator is always one click away. But this set-and-forget mentality is an illusion and has never been what makes a great collaboration. 

Influencer marketing will always be about dedicating the time necessary to nurture long-term partnerships with authentic creators who become champions for your brand. A world without third-party data will not change that. What will change, however, are the steps brands take to optimize the discovery and recruitment process. 

To address this concern, GRIN recently launched GRINup—the industry’s first discovery-as-a-service product that leverages expert human touch to offer customers all of the benefits of organic recruitment with none of the legwork. These new creator discovery best practices focus on nurturing only the strongest brand-creator connections and will provide a blueprint for how top players in the creator economy select partnerships in a landscape void of third-party data.

Book some time to chat with a member of our team today to learn more about GRINup and how GRIN can help your brand discover the perfect creator partnerships.

Key takeaway on first-party data vs third-party data: First-party data will help guide the future of influencer marketing. 

The transition from third-party data highlights an even greater need for long-term partnerships with brand-aligned content creators. While many marketers have relied on third parties to help discover those creators, shifting to a first-party data strategy will ultimately provide them with more accurate metrics to pull from when selecting the perfect brand partner. 

There will be some challenges ahead for some. But as industry leaders like GRIN continue to rewrite best practices for creator discovery, brands who remain steadfast in their commitment to influencer marketing will enjoy a richer future with more authentic relationships with creators and their engaged audiences.

Frequently Asked Questions

Special thanks to our friends at Grin.co for their insights on this topic.
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