Among the countless innovations of the 21st century, the development of a “currency” has completely transformed the way professionals, companies, and consumers view the market for products and services.
And we are not talking about dollar, euro or any other kind of currency, but about data!
First, second and third-party data are terms related to the so-called Data-driven Marketing.
This management approach consists estonia phone number data of the collection, study, and use of data in marketing decision-making.
First-party data, however, is more valuable to companies, as it is generate from their own channels and platforms. Thus, it tends to be more accurate and reliable.
In this article, we explore this concept in detail, from its definition and advantages to its potential and responsibilities in a market increasingly oriented by data. Keep reading to learn:
- What are first, second and third-party data?
- What are the advantages of generating your own data?
- How to use first-party data?
- How can you integrate first and third-party data?
- Why invest in data-driven marketing?
- What is the scenario of this strategy in the world?
Enjoy!
What are first, second and third-party data?
First, second and third-party data are terms disconnect other devices and peripherals that refer to the body, institution, or company responsible for collecting and making available a set of information.
Thus, when conducting a study to develop a marketing plan, for example, an organization can generate its own data, obtain market reports from partner companies, or consult specialized agencies that make this type of data available on open platforms.
Joni Castorino, director of Oracle Data Cloud, differentiated these approaches in a very didactic way at the Advertising Week New York conference in 2016, defining the 1st, 2nd, and 3rd-party data, respectively, as “mine”, “yours” and “theirs”. Let’s look at each of them below.
First-party data: “my data”
First-party data, or primary data, is information collected directly by the company making use of it.
It is generated through marketing campaigns, website and social media monitoring tools, surveys, and others.
The main characteristic of first-party is that email leads database its information is collected from the company’s domains: the channels in which it operates and the resources it adopts to capture data.
Its major advantages are reliability, accuracy, and confidentiality. The company establishes its own parameters and metrics in its analyses and can keep its reports protected.
Second-party data: “your data”
Second-party data, or secondary data, is information collected by a partner company willing to share or trade this data.
This practice is very common among companies exploring different niches within the same market. In such cases, as there is no direct competition between the two organizations, they are free to assist each other in various ways.
A dietary supplement distributor, for example, could benefit from the information provided by customers of a gym and vice versa. Similarly, a retailer can partner with its distributors to gain insights into production, logistics, and public preferences.
The main advantage of second-party data is that it allows companies to access relevant data without collecting it. Also, they can broaden their view of the market by combining this information with first-party data.
Third-party data: “their data”
Finally, we have third-party data, which is information provided by open data providers that share statistics about the behavior, habits, and preferences of different consumer profiles from various purchasing channels.
Companies that market or make this type of data available on sales and advertising platforms generally work with large volumes of information and use digital services, such as online apps or services, to collect it.
The biggest advantage of third-party data is its scope. It is an extensive and varied data that serves various types of business. On the other hand, this broad view may lack accuracy.
Also, since the data is open to the provider’s users, the chances of differentiating yourself in the market are lower, as your competitors will have access to the same information.
What are the advantages of generating your own data?
In principle, the biggest advantage of first-party data is in the control you have over it, from its origin to its utilization.
Since the company that generates the data is the same one that uses it, the strategies adopted to capture this information can be designed to meet the business needs and objectives directly.
However, the benefits do not stop there. Check below some other important