Third-party to First-party Data and the Privacy Revolution

26th Apr, 2023

The collection and use of personal data have become a hot topic in recent years, with concerns about privacy and security growing globally. More importantly, the use of personal information on the internet and how Search Engines, Social Media Platforms and direct marketing companies are using collected personal information for marketing campaigns. 

In South Africa, this issue has become even more relevant. With on-going spam calls from companies that don't have consent to contact you, endless email campaigns and even SMS campaigns. POPIA aims to curb these issues, albeit unsuccessfully, but either way the shift is happening globally and most definitely changing the internet marketing landscape.

Today, we will explore the shift from third-party to first-party data and how it affects privacy and marketing efforts in South Africa.

 

The Definition of Third-Party and First-Party Data

 

Before discussing the impact of the shift from third-party to first-party data, it is essential to understand the terms. 

Third-party data refers to information collected by companies that are not the original source of the data. This data is often used for targeted advertising and other purposes. 

First-party data, on the other hand, is collected directly from the source, such as a customer who provides their information to a company.

 

What is the Privacy Revolution and how is it reshaping the internet?

 

The Privacy Revolution refers to the growing awareness and concern around the collection, use, and storage of personal data, and the push for increased privacy and data protection measures. 

It has been driven by a combination of factors, including the widespread use of the internet, the increasing amounts of personal data being collected and stored by companies, and high-profile data breaches and scandals.

The Privacy Revolution is reshaping the internet in several ways, including:

1. New Regulations and Laws: Governments around the world are enacting new regulations and laws to protect individuals' privacy, including the European Union's General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) in the United States. These laws give individuals more control over their personal data and place greater responsibility on companies to protect it. As mentioned previously, South Africa is governed by The Protection of Personal Information Act (POPIA)..
2. Changes to Business Practices: In response to these new regulations and growing consumer demand for privacy, many companies are changing their business practices. For example, they are collecting less data, being more transparent about how they use data, and providing more tools for users to manage their data.
3. Advancements in Technology: Advances in privacy-enhancing technologies such as encryption and blockchain are making it possible to protect personal data in new ways. These technologies can help ensure that data is kept secure and only accessible by authorised parties.
4. Consumer Awareness: The Privacy Revolution has led to increased awareness among consumers about the value of their personal data and the risks associated with sharing it. This has led to a greater demand for privacy and data protection measures from both consumers and businesses.

Overall, the Privacy Revolution is leading to a more privacy-conscious internet where individuals have greater control over their personal data, and companies are held more accountable for their data practices. While it is still a work in progress, the Privacy Revolution is helping to build a more secure and trustworthy internet for everyone.

 

How will data collection be impacted by the privacy revolution?

 

Data collection in South Africa will be impacted by the Privacy Revolution in several ways. The Protection of Personal Information Act (POPIA), which came into effect in 2020, is South Africa's data protection law that aligns with global data protection standards such as the GDPR. The POPIA provides a framework for the collection, processing, and storage of personal information, with the primary goal of protecting the privacy of individuals' personal data.

Here are some ways that data collection in South Africa will be impacted by the Privacy Revolution:

1. Increased Accountability and Transparency: The POPIA requires businesses to be more transparent about their data collection practices, including informing individuals about what data they are collecting and how they are using it. This increased transparency will help individuals make more informed decisions about what information they share with businesses.
2. Enhanced Data Subject Rights: The POPIA grants individuals enhanced rights over their personal information, including the right to access, correct, and delete their data. This will allow individuals to exercise greater control over their data and ensure that it is being used ethically and securely.
3. Stricter Data Protection Measures: The POPIA imposes stricter data protection measures on businesses, including requiring them to implement appropriate technical and organisational measures to protect personal data from unauthorised access, loss, or theft. This will help ensure that personal data is kept secure and not misused.
4. Increased Penalties for Non-Compliance: The POPIA provides for severe penalties for non-compliance with the data protection law, including fines and imprisonment. This will encourage businesses to take data protection seriously and implement appropriate measures to comply with the law.

Overall, the Privacy Revolution in South Africa will lead to greater protection of personal data and increased accountability for businesses that collect and use personal information. By aligning with global data protection standards, South Africa is positioning itself as a leader in data protection and privacy, and this will help build trust between businesses and their customers.

 

How will the change in data collection impact digital marketing?

 

The changes in privacy policies and data collection will have a significant impact on digital marketing in South Africa. As businesses and consumers become more privacy-conscious, digital marketers will need to adapt their strategies to comply with new regulations and meet the expectations of their audience. 

Here are some potential ways that digital marketing in South Africa may be impacted:

1. Increased Emphasis on Consent: With the POPIA in effect, businesses must obtain explicit consent from individuals before collecting and using their personal information for marketing purposes. Digital marketers will need to ensure that they obtain valid consent from their audience and clearly communicate how the data will be used.
2. Shift Towards First-Party Data: With third-party data becoming harder to access, businesses may rely more on first-party data, which is data collected directly from their own customers or website visitors. This can include data such as website behaviour, purchase history, and email interactions. Digital marketers will need to find ways to effectively use this data to target their audience and drive engagement.
3. Importance of Data Security: With stricter data protection measures in place, digital marketers will need to ensure that they have appropriate measures in place to protect their customers' personal information. This includes implementing secure data storage practices, encryption, and access controls.
4. More Targeted and Personalized Advertising: As digital marketers rely more on first-party data, they will have access to more detailed information about their audience. This can allow for more targeted and personalised advertising that resonates with the individual's interests and preferences.
5. Emphasis on Transparency: With increased emphasis on transparency and accountability, digital marketers will need to be more transparent about their data collection and usage practices. This includes clearly communicating how data is collected and used, as well as providing individuals with the ability to control their data.

Overall, the changes in privacy policies and data collection will require digital marketers in South Africa to adapt their strategies to meet the new requirements and expectations of their audience. Those who are able to effectively navigate these changes will be better positioned to build trust with their customers and succeed in the digital landscape.

 

The benefits of using first-party data for businesses:

 

1. Higher Quality Data: First-party data is collected directly from a business's own customers or website visitors, which means that it is typically of higher quality and more relevant to the business's specific needs. This can lead to more accurate insights and better-informed decision-making.
2. Cost-Effective: Collecting first-party data can be more cost-effective than purchasing third-party data, especially for smaller businesses with limited budgets. This is because first-party data is often easier and less expensive to collect, and can provide better results than generic third-party data.
3. Greater Control: With first-party data, businesses have greater control over the type of data collected and how it is used. This can allow businesses to tailor their data collection efforts to meet specific business goals and objectives.
4. Personalised Customer Experiences: First-party data allows businesses to gain deeper insights into their customers' preferences and behaviours, which can be used to create more personalised and relevant experiences for individual customers. This can help businesses build stronger relationships with their customers and increase customer loyalty.
5. Improved Targeting and ROI: By using first-party data, businesses can create more accurate and detailed customer profiles, which can be used to improve targeting and increase the return on investment (ROI) of marketing efforts. This can lead to more effective campaigns, higher engagement rates, and increased revenue.
6. Compliance with Privacy Regulations: With increasing privacy concerns, using first-party data can help businesses comply with privacy regulations such as POPIA. Collecting data directly from customers, and ensuring that they have given explicit consent, can help businesses avoid potential legal issues and build trust with their customers.

Overall, first-party data can provide businesses with many benefits, including higher-quality data, greater control, and the ability to create more personalised experiences for their customers. By collecting and analysing their own data, businesses can gain valuable insights and make more informed decisions that can help them achieve their goals and objectives.

 

In conclusion to The Privacy Revolution and data collection changes

 

In conclusion, the shift from third-party to first-party data collection is a positive step towards protecting privacy in South Africa. As businesses continue to adapt to these changes, customers can feel more confident that their personal information is being used ethically and securely. With further regulations on the horizon, the future of data privacy in South Africa looks promising.

Although the changes require better governance, compliance and improved security, with the right technical partner, the change to data collection will influence digital marketing efforts positively and generate better ROI than ever experienced previously.

Need help with your data collection policy and correct compliance? Reach out to our Digital Strategists or Business Development Team and we will gladly meet to discuss your business needs and propose a solution to you that achieves your business objectives.