How Amplitude Powers Its First-Party Data Strategy

Whether or not Google ultimately deprecates third-party cookies, the era of relying on them is over. With growing scrutiny over Google’s monopoly, the day will come when you pick up your phone, get asked, “Which browser do you want to use?”, and Chrome won’t be the biggest tile on the screen. Evolving privacy regulations are also steadily shifting more and more power to the consumer, giving them greater control over their data and how it’s tracked. You don’t need us to tell you that the future is first-party data—it’s already here.

The companies that will be competitive in this new landscape of first-party data systems aren’t just those that solve the challenges of transitioning away from third-party data. They are the ones that adapt to a fundamentally new way of operating, using first-party data—and the enhanced control and ownership it offers—to their advantage.

In this post, I will share the best practices for a first-party data strategy that I’ve learned as Field Chief Technology at Amplitude, including how we’re approaching first-party data to help our company and our customers thrive.

Modernize data collection

Let’s say you’re a CFO and your finance team is challenged with staying on top of the rapid changes in tech. The dilemma with cookies is somewhat obscure but it’s generally understood that the loss of signals from your customers and prospects is affecting the bottom line. My message is the same for this matter as it has been traditionally in times of disruption: investments are required. You’ll need to invest capital on new technology to alleviate the loss of an old strategy, but in exchange, the value is clear—you’ll own your own data and the benefits that surface from that stewardship.

In the past, you might have thrown money at Google, which helped the top-of-funnel motions start a pipeline of revenue, but you haven’t forgotten the frustrations the company faced with that as well. Google was never fully transparent, and attribution for your marketing budget was never fully realized. Since Google is not deprecating this third party approach, you can try to keep doing that, but nothing about the need for measurement will change. In fact, since Google will allow opt-outs, it probably will diminish in value overall. By investing in tracking to capture first-party data, you have the chance to do something better.

When you capture your own data, you build a more robust, reliable foundation for understanding and engaging with your customers. At Amplitude, we use a modern event-based tracking system, which captures precise user actions. Clickstreams and significant actions—such as purchases and time spent on the products your company offers—will surface insights, but also enable you to deduce additional data points, such as behavioral insights.

The users on the website and app have consented to this data collection, so you own the data. It’s a one-time investment that continually builds insights through automation, and since AI is built into the platform, the business can be both proactive with its customer experience as well as reactive to the moments that are critical in the journey. Since this data is unified in real time, it is trusted for its high-fidelity outcomes, allowing the business to consolidate arduous processes of data validation and cleansing.

A popular example of this valuable addition to the business strategy can be seen through Amplitude’s self-service journey and funnel reporting, and users can set these insights up in seconds. They clearly show the paths that users are taking to make a purchase and then identify and resolve any friction points.

Marketers can also follow up with customers who didn’t convert in the same visual, targeting them with personalized campaigns that seek re-engagement. This effectively provides the business with a dual marketing motion in a single insight.

Collaborate with trusted partners

While owned tracking systems give you high-quality first-party data, it’s limited to the people that visit your digital properties. So naturally, this means that your audiences will be smaller and have less reach initially, but they grow quickly as the automation continually enriches engagement to the profiles.

This is where modern AI delivers even more value. Whereas in the past, customer data platforms would merely present this valuable customer profile to the business, AI features throughout the first-party environment will take the next step and suggest what you should do with it. AI features on Amplitude predict the right audience based on behavior, and AI technology on your Ad Tech partner platform now enables you to build lookalike models that can identify and target people similar to your existing audience.

This combination of your chosen marketing partners effectively expands your reach. Integrations with specialist partners mean we can make our first-party data work harder without needing to build extra capabilities in-house.

Software automation and AI are solid investments when they reduce cost and time associated with a business process, and they also mitigate risk to some degree. As marketing processes are now fully intertwined with privacy regulations, all three factors must manifest throughout the system you have chosen to deliver the first party strategy. Whenever and whereever you can improve those three areas by collaborating with an external partner, it makes sense to do so.

Let’s say we identify a group of users who show behaviors that we know tend to lead to conversions—such as frequent app usage. We can send this cohort to The Trade Desk, a digital ad platform, via the Amplitude integration. The Trade Desk matches our segment with thousands of similar users across different locations and targets them with our ad, essentially extending the value of our first-party data beyond our owned and operated properties.

Ensure rigorous data privacy and compliance

When you track user data, you are responsible for complying with privacy regulations as you store and analyze that data. At Amplitude, there are several ways we set ourselves and our customers up for secure data handling.

The way we track data is fundamentally different from using third-party cookies. Cookies live in the browser and facilitate the collection of customer data for a distinct purpose. In Google Search Marketing, these cookies enable Google to receive data from your website. This helps Google understand if they were part of the conversion lineage. In contrast, software development kits (SDKs) deployed by Amplitude operate directly within your website or app, and can be configured to govern and move data whereever necessary. They’re far more precise and flexible, collecting detailed insights such as user actions, device information, and operating systems. And all this data is anonymized using hash codes, so it’s not personally identifiable. This lowers the cost of doing business and mitigates the risk of your customer data not being handled properly by an outside vendor.

The Amplitude platform also enables us to control access to the customer data within our organization. We assign teams different levels of access based on their roles. For example, the Amplitude product team might need detailed information about how users interact with specific features, while the marketing team may only need access to aggregated data on user segments. Sensitive information is only visible to those who truly need it, which minimizes the risk of accidental exposure or misuse. By having Amplitude provide a flexible single source of control, we have unified product and marketing’s efforts in data collection, data access, and data control using one platform and one approach.

Invest in cloud infrastructure

How and where you store your data is key to ensuring data privacy and compliance. Transitioning from on-device data processing to cloud-based solutions is essential for secure and efficient data handling. The cloud-based APIs also have an expanded set of functionality and features than what could previously have been possible with a cookie-based system.

To take full advantage of cloud based approaches, it’s important to fuel the systems with the customer data that they require, in real time and in secure fashion. This can be set up in a number of ways, but the most popular approach is to select a system, such as a CDP or a warehouse, to host the unified data set. Once in this hub, the data can be moved to the systems that need it for marketing, analytics, legal, and so forth. However, a big risk with managing customer data in this manner is data drift—when data gets duplicated or spread across multiple systems there is the possibility of it becoming stale, forming duplicates, and increasing the level of governance to an unacceptable amount of effort.

For this reason, Amplitude released a new approach that addressed those risks in 2023. In that year, Amplitude Warehouse-native functionality hit the market, allowing seamless data exchange with the data clouds and warehouses, particularly Snowflake. These Warehouse-native techniques allow a business to use the customer data within Snowflake without copying it into Amplitude’s local database, alleviating the risk of data drift and satisfying the need for strong data governance to avoid any potential litigation. And when data changes in Snowflake for any reason, Amplitude is automatically informed and the insights needed for real time marketing are provided—all without having to spend incrementally every time one or more systems need the same information.

Snowflake, like The Trade Desk, is a trusted partner that we collaborate with as part of our first-party data strategy. They’re industry leaders in marketing strategy execution, and specialists in data storage and data activation, handling petabytes of sensitive data with top-notch security.

Working with Snowflake is a win for us here at Amplitude because our engineers don’t need to build and maintain costly data warehouse configurations, which saves us the hassle and reduces the risk of data being duplicated across systems. If a user requests data deletion, having everything in one place means we can easily comply. In contrast, if data had drifted across multiple systems, managing those requests would be time-consuming and expensive. So this model not only brings us to compliance levels that our clients expect us to attain, it also condenses numerous engineering and marketing processes that would have otherwise slowed us down and cost us more to operate.

Get even more out of your first-party data

We’ve explored the best practices for collecting, storing, and analyzing first-party data and how collaborating with marketing platform partners can help you activate that data. But there are many other ways to use this data to create personalized experiences and boost customer engagement. For more strategies, download your first-party data guide.