First-Party Data: How You Can Optimize Your Ads Targeting By Relying On Yourself

“No one knows your customers better than you do.” We’ve all heard this old adage before, but it has never been truer than it is now.

Our ability to gather our customers’ information has never been greater, and advertisers lean into this data to fuel their ad targeting and audience creation.

In a recent study conducted by Duke University’s Fuqua School of Business, 62% of marketing leaders stated their use of online customer data increased within the past two years. 70% also said they plan on using more online customer data in the future.

When you’re creating audiences for your ad campaigns, though, you have to choose between two types of data: first-party or third-party data.

<h3>The difference between first and third-party data.

Third party data is information on individuals that's aggregated by third-party sources and made available on advertising platforms for targeting purposes.

For instance, you might not disclose your household income online, but third-party data aggregators might be able to place you in a specific income bucket depending on other information available to them. They can then send that information back to advertising networks, where advertisers can use this data to create audiences for their ads.

For first-time advertisers, a manual targeting strategy based on third-party data is still commonplace for reaching a specific buyer persona. When HubSpot first introduced our CRM back in 2014, we relied on third-party data and manual targeting to distribute our ads to people with the demographics and interests that reflected our ideal buyer persona.

But once we started to generate visits to our site, we quickly shifted towards a retargeting strategy that used first-party data to serve extremely targeted ads to our audience.

While third-party data is aggregated data on a general group of people, first-party data is information you collect directly from your customers like their interactions with your brand. If third-party data lets you reach a broad persona, then first-party data lets you pinpoint a hyper-specific persona.

For example, you could create an audience of all contacts in your CRM who have bought one of your products or everyone who registered for and attended a webinar you ran.

You could also create an audience based on website data, like everyone who has visited your pricing page. Using CRM and website data, you can create an extremely specific ad that provides your audience with tailored content and propels them along their buyer’s journey.

<h3>The changing tides of ads targeting.

Both first- and third-party data have their place in your advertising strategy, but it’s important to make sure your data is verifiable. Since first-party data comes directly from your customers, you can rest assured it’s accurate information that you can segment your audiences with. Third-party data and its use in ad targeting, however, is becoming more and more suspect.

A recent Ad Age study found that 75% of advertisers don’t fully trust their third-party data sources and 65% don’t understand the source of their third-party data.

This uncertainty surrounding third-party data, coupled with recent regulations like GDPR, has signaled a shift away from third-party data as a primary source of ads targeting and audience creation.

As a result, internet browsers like Safari and Firefox are making it more difficult for companies to track your activity as you browse the internet. Networks like Facebook have even removed third-party data targeting options from their ads manager.

With this move away from third-party data, it’s now more important than ever to use the data you directly collect from your customers to create your advertising audiences.

<h3>Audience options that use first-party data.

When using your own customer data to target ads, ad networks provide a few different options for you to use. But, in general, using a CRM in tandem with an ads management tool is the best way to leverage your customer data and create high-performing audiences at scale.

First, you can create ad audiences of your website traffic. Whether you’re using the Facebook Pixel or the Google Site Tag, embedding this piece of code on your site lets you track visitors and create audiences based on their interactions with your website.

With this information, you could go as broad as creating an audience of anyone who has visited your entire site. Or you could get granular and create an audience of people who have visited a specific page or groups of pages.

To optimize your ad, you’ll want to match its content offer and optimization event with your audiences interests.

For example, if you’re targeting all the visitors of your entire site, you could create ads that provide your audience with specific blog posts and are optimized for page visits. If you’re targeting visitors of your pricing page, you could offer them a discount and optimize the ad for sales.

Ad networks also give you the option to create custom audiences based on specific data you have collected on your customers over time. This could be anything from the information you’ve gathered through forms to your customers’ interactions with your marketing emails.

For instance, you could create an audience of everyone who opened but didn’t click through to one of your marketing emails and create an ad that targets these particular people.

But if visits to your website or possessing contact information in your CRM is a prerequisite for creating ads audiences, how do you expand your reach and acquire new leads? This is where lookalike audiences come into play.

Instead of creating an arbitrary persona based off general demographic characteristics, lookalike audiences let you take an audience you’ve already seen success with and tell ad networks to go out and find individuals who exhibit similar characteristics as these people.

Lookalike audiences can also be used at every stage of your buyer’s journey. At the beginning of your buyer’s journey, when people are just getting familiar with your brand, you can combine a lookalike audience with your Facebook Pixel to drive more traffic to your website.

Later in the buyer’s journey, you could take a list of your most qualified leads based on interactions with your marketing materials and create a lookalike audience to attract more qualified prospects to your brand’s bottom-of-the-funnel content.

<h3>Putting ads targeting into practice.

What does a first-party data targeting strategy look like in the real world? Let’s say you’re going to run a campaign with a focus on driving qualified leads to your sales team. You could host a webinar and create an e-book to pre-qualify leads. You could also create a number of blog posts to raise awareness for your brand and solutions.

At the beginning of your campaign, you could blend your website traffic audiences with lookalike audiences to expand your reach. You could also boost your organic social posts to see which content resonates with your audience and then create lookalike audiences of people who interacted with those specific pieces of content. The goal here is to raise awareness for your brand’s solution and drive traffic to your website. These ads should be optimized for page visits.

Once you have driven traffic to your website, you’ll want to create retargeting audiences based on your web traffic and target them with your two pre-qualifying offers (the webinar and e-book download). You could also create different audiences for each of your offers.

For instance, you could distribute your webinar offer to an audience of previous webinar attendees and your e-book download to people who have visited specific pages on your website.

That said, don’t forget to test different combinations of audiences, ad creative, and content offers. Experimentation is the most objective way to determine what will resonate with a specific audience you create.

Additionally, remember to keep experimenting with lookalike audiences. You could also add a layer of demographic targeting to get even more granular with your ad creative or content offers. With these types of ads, they should be optimized for conversions, either for webinar sign ups or e-book downloads.

Now that you have a good number of people who downloaded your e-book or registered for your webinar, you can create custom audiences based on these groups of people.

At this point, your ads could offer these leads an opportunity to speak with your sales team, a coupon, or a specific deal. You could also experiment with creating lookalike audiences and target that audience with an offer to speak with sales.

Since those individuals will resemble leads that have interacted with your pre-qualifying offers, they might already be ready to speak with your sales team. These ads should be optimized for sales.

<h3>Taking matters into your own hands.

Based on the uncertainty and skepticism of third-party data, it’s now time to double down on using customer data for ads targeting. Using first-party data to create audiences will enable you to be as helpful and relevant at every stage of your customer’s buying journey, producing successful results with your ad campaigns in 2019 and beyond.