Almost 36% of executives are of the view that leveraging the quality and quantity of their first-party data was critical for their brands. Moreover the madtech industry cites the first-party data as their top tech investment priority. (source: blueconic)
Marketers will agree that when you dig deeper into data, it reveals multiple layers of information about your customers. The key is to make the most of your marketing efforts and most effectively target your potential customers.
Now talking about data, you may wonder there are zillions of data and numerous data sources, but which data is the right data ? We will answer that too, but before that let’s talk about all the data that’s there on the table.
What Are the Main Types of Data?
Data can be collected from different sources and are categorized into three categories based on the way it is collected: First-party data, second-party data and third-party data.
First–Party Data: Sources and Benefits
First-party data is considered the most common and valuable data source because it is collected directly from the people. It is raw data about those customers who have a direct relationship with your brand. There is enough room for you to curate personalized messages for enhancing the customer experience.
It can be either of people who have interacted with you or are your potential customers. Now there are multiple ways you can collect the data, from both online and offline platforms.
You can assemble inputs from sources like website interactions, email registration, newsletter subscription etc. The benefit is you get to know your customer’s choices and also see if their phone number is changed or email id is updated. The data parameters are typically age, gender, demographics, email id, phone number.
Its Benefits
- Since the data comes straight from your customers, the data is of high quality, genuine and unique.
- For strategizing an ad campaign for a niche audience, you only require to segment the first-party data appropriately, and you are good to have a nicely targeted approach. Moreover, data collection is free and hence cost-effective.
- Since you are collecting the data all by yourself, there is no chance of discrepancy and the data is reliable.
- Marketers have a belief that first-party data moulds the core performance based marketing, analysis, and ROI of a brand.
Utilizing Your First–Party Data
Imagine that you are a home furnishing retail, and are planning to open a store at a new location. You already have a good amount of first-party data in hand. This insight will help you identify, segment and analyze the people who are most likely to turn into customers.
There will be no wastage of time and money as you don’t have to guess who your customers are. Besides, you can go for a site retargeting campaign reaching them through social media or websites.
Let’s say after checking your campaign metrics you have decided to re-iterate it with a new strategy. It could either be cross-selling or upselling, by utilizing your first-party subscription data to draw in those customers who still did not purchase.
Second–Party Data: Sources and Benefits
Second party data can be obtained by partnering with second-party sources. You can partner with a business that offers services complementary to your brand and only take their data.
On the other hand, you can partner with a brand and share your data to theirs, so that you both can mutually benefit from it and become two brands under a single company.
Its Benefits
- You get your desired audience from another agency or company who does all the research work for you and works as a win-win situation.
- It has higher accuracy, so the precision of second-party data is more since the collection is from a singular source.
- The data is an exact match to your desired audience. So it escalates your existing data and increases the possibilities of better targeting.
Utilizing Your Second–Party Data
The data you are shared by a second-party provider can either be done in a long-term continuous process or a one-time acquisition. Your requirement is for the enrichment of your own data
For instance, let’s say you are a headphone seller, so you will have details of customers who have recently bought headphones from you. Now if you partner with a mobile seller, you will get information about all customers who have purchased phones from them.
Further, you can connect with an advertiser who would help you in sending advertisements to customers with respect to the phones bought. Tailored messages will give them the opportunity to collaborate with your brand.
Thus leveraging your data with a second-party is an added advantage, you get more customers data and your revenue also doubles up.
Third–Party Data: Sources and Benefits
Third party data mainly consists of data that is purchased by companies who do not have the resources to collect the information on their own. It is not necessary that the data will comply with the essence of the brand; they are acquired from other places, usually to resell it.
However, the thing you need to pay attention to is, third-party data is not a refined one. Many times you will not have a clear picture of its source. Additionally, since this data is available to anyone who can purchase data, the chances are high that other brands or your competitors have already used it for campaigning.
Its Benefits
- It is less time consuming. Your brand can enjoy the benefits in no time because these data are generally purchased in bulk.
- Third-party data enables your brand to go beyond your usual audience and is scalable.
Utilizing Your Third–Party Data
In third-party targeting, you have a more considerable base of a target audience. Third-party data is aggregated from a variety of platforms and then stored in a third-party data provider such as a DMP. By aggregating this data, DMPs can have single customer views to build unique audience profiles or customer personas.
Wondering How to Choose Among First-Party Data, Second-Party and Third–Party Data?
For brands who want to target or retarget niche audiences, then brands can use first-party data. However, you can leverage first-party data in combination with other types of data to make it more effective.
When it comes to second-party data, you can leverage it for extending the audience segments and reaching new potential customers. Second-party data is not only accurate but can find out new audiences for your brand.
And, you can make use of third-party data in various marketing and advertising strategies. Third-party data help expand your customer base as it enables you to target audiences from across the online environment, thereby driving more traffic to your brand.
Conclusion: First–Party Data Is Overwhelmingly the Future of Marketing!
Remember, every piece of data that a brand possesses is a crucial component in all phases of business. Your job as a marketer is to take the right decision in choosing the correct data. So you need to have a comprehensive understanding of first, second and third-party data.
With third party cookies phasing out and going irrelevant, the focus shifts towards first party data as the premier marketing source.2nd party data and 3rd party data is often a miss, while first-party data remains the most reliable. 1st party data unified in a CDP helps you to track better and accomplish greater insights.
Moreover, as major focus shifts towards user privacy (complying to CGPA and GDPR) and data governance, solely depending on 1st party data is simpler. With serious debates over the various data sources, more than 41% of marketers still choose to infuse in their marketing plan. Hence, first-party data isn’t just a buzzword but a technology that’s here to stay!
