Data is big business in the online world, particularly when it comes to marketing. Stay ahead of the game with this introduction to first, second and third party data and see how they compare.
First Party Data: Focused Quality
First party data is information collected directly from website and app users, often detailing customers’ interests, habits and various other interactions that help develop effective marketing strategies in a rapidly changing online landscape.
A range of tools and programs are available to help companies track users’ site activities and manage first party data efficiently. Web analytics is a common method that utilises “cookies” to gather information, which can then be fed into a CRM system to be managed and analysed.
First party data is frequently thought of as the most valuable form of information due to its accuracy in helping understand customers’ needs and expectations. However, it’s limited in its scope as the information solely concerns existing customers.
Nevertheless, this first-hand information is useful for marketing strategies such as retargeting, which involves placing tailored advertisements in front of site visitors. Amazon is well known for this method of advertising as well as programmatic companies such as PRGRMTK also.
Second Party Data: Building Relationships
Second party data is information that a company has collected from their user base (first party data) and shared with another company. It’s often the case that two businesses targeting a similar demographic will share this type of information in a way that benefits them both.
For example, an online jeweller and a luxury watch retailer might exchange their data with one another as they’re not competing directly, but they are targeting an upmarket customer base willing to spend large sums of money.
Whilst first party data is all about collecting existing customers’ information, second party data is concerned with extending out to a wider audience and finding new customers. It’s the next best thing in terms of data quality, and more and more companies are developing partnerships with a view to piquing the interest of relevant demographics.
Third Party Data: Reaching Far and Wide
The broadest type of information companies can source is third party data, which is often aggregated by large businesses such as eXelate, BlueKai and Spokeo, the latter of which is known for combining offline and online data.
In contrast to the previous two data types, third party data is often available to anyone at a price, including competitors. That means any company sourcing this type of information – for their programmatic marketing campaign, for instance – should not be doing so to gain any unique intelligence on their rivals.
However, the wide spread of information offered by third party data makes it useful for gaining insight into and targeting relevant audiences and demographics, amongst other things. The problem of reducing bot traffic is also helped by having this type of data at your disposal, as is extending an audience base.
As you can see, each data type has its merits and drawbacks, but they are all incredibly important for preparing effective data-driven marketing campaigns. Whether it’s first-hand customer data or broad third-party data, how has each type benefited you and what data-driven strategies will you be employing in the future?