Chances are you’ve heard the terms “first-party data” and “third-party data” thrown around at some point in your career. You might even have heard of second-party data, too. But have you ever wondered what those terms really mean? Data is one of the most important factors in what makes a digital campaign successful or not. Poor data equals poor results, and vice-versa. Let’s take a look at the different types of data and see how each one can benefit your next digital campaign.
First-party data is data that you have collected yourself. In this situation, you are the first party. This is information you have gathered directly from your audience. For example, this can be data collected from actions on your website, data from your CRM, subscription data, or even from online surveys. Generally, first-party data is considered to be the most valuable. In addition, it’s extremely cost-efficient, because it’s usually derived from your own systems at no cost to you. Privacy concerns surrounding first-party data tend to be minimal as you know exactly who it came from and how you got it.
If you use a data management platform, it is incredibly easy to keep track of and store first-party data. If you’re not collecting first-party data from your website, you’re missing out on valuable information that can be leveraged for higher profits. Collecting and using first-party data should be a priority. This data will help you target the right audience for your digital campaign, leading to the best results and biggest ROI.
You don’t hear about second-party data as often as first-party data. Second-party data is essentially someone else’s first-party data. Second-party data can be purchased directly from the company that owns it; there is no middle man involved. This means you can trust the source and the accuracy of the information. Second-party data also allows your company to build relationships with other companies that have a target audience that overlaps with your own.
Lastly, let’s look at third-party data. Third-party data is purchased from a company that is not the original collector of the data. These large data aggregators pull information from other platforms and websites and then pay the original collector for the data. The data aggregators then sort that data into a set and sell it.
The benefit of third party data is the sheer amount that’s available for purchase. However, it’s important to keep in mind that other companies can by this information as well, meaning you aren’t gaining a unique audience. Even so, that doesn’t mean you should discount third-party data in your digital campaigns. Third-party data is a great way to expand your audience and gain greater insight into their behaviours and interests.
Data is an integral part of any digital campaign. Knowing who to target and where and how to reach them is crucial for marketers. It’s best not to rely on any one source of data, but to use a combination of all three, as they all have their strengths and weaknesses. If your bank isn’t utilizing all three types of data, it’s never too late to start.