1st party data vs 2nd party data vs 3rd party data
- What is first party data?
- How to use 1st party data?
- What is second party data?
- How to use 2nd party data?
- What is 3rd party data
- How to use third party data?
- 1st + 2nd + 3rd party data = 360-degree customer view
- 1st party vs 2nd party vs 3rd party data - differences
- Integrate 1st 2nd and 3rd party data on DMP
Data is flooding online back and forth, and systems collect it in billions of amounts. It’s getting organized, integrated and activated with different sets of rules and specific marketing actions for. Let’s take a look at differences between 1st-, 2nd- and 3rd party data, and find out how to effectively use them in your campaign.
What is first party data?
First party data is the information that companies can collect from their own sources. In other words, every information about customers from both online and offline sources, such as the company’s website, app, CRM, social media or surveys is first party data.
The first party data can include information as following:
- visited websites & interactions
- purchase history
- time spent on website
What’s important - first party data can be collected for free and the company which owns the data has all needed customers’ consents. In the GDPR era it is highly important. By using 1st party data, you can deliver your users personalized experiences and display them relevant ads. The information can be easily segmented and monetized by using a Data Management Platform.
Looking for the right target group?
How to use 1st party data?
Basically, by using first party data you can deliver your current visitors personalized experience and send them messages they expect. Let’s take a look at three benefits of using first party data in company.
1. Create personalized experience
Gathering first party data makes it easy to know your users and divide them into specific groups. You can analyze your web traffic and create audiences who are looking for specific products or are interested in a particular topic, such as sport or automotive. It enables you to create highly personalized messages and increase the effectiveness of your marketing efforts. Read more about audience targeting on our blog.
2. Comply with GDPR
1st party data can be the most transparent because you own it and you are responsible for collecting all necessary consents. Your law department can give you the best instructions what information you should give your users to process their data in compliance with privacy regulations. Basically, users rather agree to process their data by your company because it is usually necessary for making a purchase.
In the age of GDPR, it is extremely important to collect data legally and 1st party data is one of the most trusted and valuable users’ data. Read more about how to process users data and comply with GDPR.
3. Get insights about your audience
Collecting first party data gives you a chance not only to store data but also to look deeply into your users’ profiles. By using technological platforms, such as DMP, you can integrate data about your users from various sources (website, surveys, apps, games) to create a full view of your customers. What he or she likes/dislikes? Which products your users want to buy? Which websites do they visit after leaving your page?
What is second party data?
Second-party data is often defined as someone else’s first-party data. It means that if your potential business partner gathers data and wants to share it with you, it will become your second party data and can be used for audience targeting or enriching your own database. The information you want to receive from another company can come from various sources owned by your partner, including websites, apps or offline sources, such as surveys.
By gathering second party data, marketers get access to information about consumers potentially interested in their products. It is rather a small group, but with a specific interest or behavior (e.g. craft beer lovers or soccer fans that have been on their favorite team stadium in the past two weeks).
Since second party data is someone else’s first party data, technically, it can include information similar to the described above first part data, e.g., demography, purchase history, etc.
How to use 2nd party data?
When you use 2nd party data from your partner, you get just one brick that can create huge 3rd party sets. To learn more about 3rd party data check our post: How to use the power of 3rd party data.
Although, if a data set is small, it does not mean it is bad or of low quality. Second party data sets can be really valuable because usually, you know your business partner, so you are aware of what kind of data can be collected. Moreover, you know from which sources the data is stored, e.g. airline websites, online fashion stores, etc. And last but not least, there is no middle-man in transactions for 2nd party data. It is common practice on the market to receive the data from your partner as a barter.
Receiving the data from your partner makes it possible to create really creative campaigns. When you combine data you got with the data you wish to have (e.g., where your customers usually drink coffee or travel), it opens new opportunities to deliver your customer highly personalized campaigns.
What is 3rd party data
3rd party data are pieces of information about online users. It includes interests, demography and purchase intentions. By using 3rd party data you can precisely target audience groups to show them ads i.e. of your new car.
You choose the list of attributes of the target group, such as age, gender, interests: automotive, travel, and purchase intentions: cars. And your ads will see only this narrow group, not customers that aren't interested in the products you sell.
The 3rd party allows marketers to know which websites on the Web customers visit, what products of which brands they saw, so marketers know what their customers are going to purchase.
3rd party data can be used not only in targeting the right audience in online campaigns. It is also crucial in enriching systems like CRM in companies or in developing Business Intelligence solutions. By matching customers' IDs, firms are filling the gaps in their clients' profiles, such as interests or demography. Having this information is highly important in creating personalized ads that help improve the effects of digital marketing activities.
How to use third party data?
In a few words, 3rd party data lets you run more effective digital campaigns targeted at users that have not been your visitors. It is mostly used in programmatic campaigns. By using knowledge about Internet users you can easily:
- run personalized ad campaigns
- send tailored marketing messages
- precisely target your audience
- reach out to new customers
All these activities are a target to improve your digital presence, increase sales and give your customers exactly what they need. Know their profiles and give them what they expect. If they’ll get it, you significantly improve the effects of your marketing efforts.
Learn more about 3rd party data - download free ebook How to use the power of 3rd party data.
1st + 2nd + 3rd party data = 360-degree customer view
Let’s observe the main differences in an example.
Let’s say you’re a successful women’s shoe producer. You have a big database with your current clients’ information along with a detailed analysis of their profiles - this was gathered out of your website and placed into your CRM. It’s data with the highest quality, trustful and free - this is your 1st party data.
Now let’s assume you decided to extend your market range and also produce shoes for men. You don’t know characteristics that would belong to your target male audience. So, you are looking for a partner, who actually knows them and is able to share that with you. The required information which you will receive from partner and later use to target your men customers - would be the 2nd party data. This increases your network with data that is also shared with other partners - worth to mention.
Now, to have a full package of data about your customers within both gender ranges, you are looking for a 3rd party data. This is information, like what exactly your customer is interested in besides your production, what path he had made before your website visiting, where is he located, or is he just looking around, or wants to buy.
1st party vs 2nd party vs 3rd party data - differences
To sum up, 1st party data is the most reliable and unique piece of information, coming from your own sources. The second party data is shared with various co-partners and might have less accuracy. 3rd party data, on the other hand, is a set of data from rather unknown sources. That’s why you have to be sure that your 3rd party data was being processed accordingly. It must be GDPR compliant, anonymized and tested by the respective agency in terms of required regulations. This is a regular process that is done by OnAudience.com. We use Nielsen DAR for testing received demographic data.
So, having all the required info, you are ready to convert your gathered data into the profit of your own. Take a look at how easy it is with our DMP.
Integrate 1st, 2nd and 3rd party data on DMP
DMP technology will help you store all types of digital information you receive from various sources, such as websites, apps, surveys or data platforms. By collecting data on your DMP you can make this data targetable, so you can use it in demand-side platforms (DSPs) to reach out to the precisely chosen audience. It is fast and easy, so you conduct many campaigns and monitor their efficiency.
Moreover, by using DMP, you can integrate your own data (1st party) with your partners’ data (2nd party) and with the data purchased on global platforms (3rd party).
Thanks to data integration you can fill the gaps in your customer database. It lets you truly know your audience: their interests, demography or purchase intentions. Why is it important? Because it allows you to deliver your users’ personalized messages tailored to their needs, which have a positive influence on brand experience. To learn more about using DMP in your company, find out 6 benefits of using DMP in your business.