The Difference Between First, Second, and Third Party Data and How to Use Them

5 Ways To Avoid Bad Data data options Data Consolidation-Negosentro | The Difference Between First, Second, and Third Party Data and How to Use Them | Display advertising campaigns are essential when it comes to promoting your business and converting leads into sales. Make the most of your budget by using the available forms of intelligence to get a heads up on your audience. As a result, you’ll be able to effectively target potential customers and build a quality clientele. There are three types of intelligence data that can enhance ad campaigns; first, second and third party data. When used in conjunction, they are a dynamic force.

First Party Data

First party here means, you. With first party data, you’ll be collecting data from your audience. This is typically done in the form of cookie-based. This data will generally include information gathered CRM systems, analytics platforms and business analysis tools. 

First party data is considered the most valuable data you can collect regarding your audience. It becomes a powerful resource when tied to display ad campaign design. The goal of first party data is to provide specifics about your already existing customers. This is a key component of site retargeting and CRM retargeting.

First party data is a means by which you are able to target returning customers by leveraging information that you already have about their product interest and past purchases. Amazon mastered this strategy of first party data and has received astonishing success. The personalized the recommendation of books and various other products through the use of first party data samples. The more personalized your ads are, the more likely you’ll be to get sales.

First party data will remain the most useful and valuable tool for getting to know your customers better. If you would like to reach customers whose first party information you don’t have, there’s always second party data.

Second Party Data

Second-party data is basically someone else’s first party data. In some cases you can work out deals with the owners of the second-party information in exchange for your first-party information. For example, a high end watch company might partner with a yacht blog to attract new customers, based on demographic overlap.  Second-party data also is very important to extending your current audience and audience targeting. The opportunities for success are limitless when you have this type of data working for you. You can eventually build and maintain beneficial partnerships. 

Third Party Data

There are many companies that sell third party data. These companies are known as Data Aggregators. The data is generally purchased on a large scale. The benefit of third-party data is the great volume of user data available to access. On the other hand, the data is widely accessible to competitors. Therefore, you won’t be gaining unique audience intelligence when you tap into the third party data resources.  

Third party data is perfect for behavioral, contextual, and demographic targeting. It also plays an essential role in solutions like audience targeting and audience extension. To make third party data work, providers usually charge a fee to use their segments on a CPM basis. Depending on what type of data, the CPM can range from $0.50 to $5.00.

Ideal Strategy

In order to optimize the available data options, first define your marketing goal. As yourself if you would like to focus on increasing revenue for existing customers or reaching new customers. From there you can use all three types of data to maximize its usage. To manage all data from various sources, there are technological platforms that help to organize and find insights about users online.

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