Pro and Contra: What are the benefits of first-party data?
Definition
First-party data refers to the data that your online shop directly collects from your customers or users. This data includes behavioral data and preferences. First-party data is often used to create personalized marketing and advertising campaigns to improve the customer experience. The use of first-party data has been increasingly restricted by legal regulations in recent years. However, you are allowed to use your legally collected first-party data in your shop.
Benefits of first-party data
Improved customer loyalty
Using first-party data is an effective way to build strong customer loyalty. Analyzing the data allows you to display personalized offers and recommendations in the retail media window in your online shop.
Personalized advertising
Using first-party data makes it possible to create personalized advertising and thus better reach your target audience.
Increased conversion rate
Personalizing advertising is crucial for success in e-commerce. By using first-party data, you can better understand the behavior of your visitors and customers and adjust your advertising accordingly. By presenting relevant products and offers using targeted logic in the AIM3 retail media tool, you can increase the likelihood of conversion.
Improved customer experience
A personalized approach through tailored offers can increase the likelihood of a purchase. For example, offering a price reduction for abandoned carts or providing suitable offers based on previous purchases can help. This makes the customer feel understood and improves the customer experience.
Disadvantages of first-party data
Data protection
The use of first-party data is a sensitive issue because it involves customer data. You must ensure that your customers’ data is treated safely and confident and that you comply with all data protection regulations.
Effort
Analyzing first-party data requires time and resources. You should have the necessary technical skills and tools to effectively analyze and use the data.
Complexity
Using first-party data can be complex because there is a lot of data. Therefore, carefully select relevant data. Only by interpreting the data correctly will the desired effect be achieved.
Overall, using first-party data for your digital retail media advertising brings many advantages, such as a higher conversion rate and improved customer loyalty. However, it is important to ensure that all data protection regulations are followed and that the company has the necessary resources and skills to effectively use the data.
With the AIM3 Retail Media Solution, you are using a tool that helps you effectively use first-party data from existing customers and create personalized advertising and offers.
By personalizing offers, companies can strengthen relationships, especially with existing customers, and increase their loyalty. Personalized ads also lead to higher shopping carts per customer and a higher conversion rate for existing customers. The use of first-party data generates higher revenues while reducing marketing costs.