What Is First-Party Data?4 min readReading Time: 3 minutes
The concept of data quality is age-old. Executable action is only as good as the data supporting it. When we talk about categories of data, there are 3 main categories: first-, second-, and third-party data. The key difference between them is who owns the data. In this post, we’ll discuss each category of data and common use cases.
Data you buy
How many emails per week do you receive from companies asking whether you’d like to purchase a trade show list? Probably more than a handful. This category of data, called third-party data, is the most widely available. Large data organizations typically collect this data and sell it at scale.
When you market to a third-party database, you’ll likely notice lower performance when you compare to a campaign that uses first-party data. Third-party data can be good way to collect demographic information. However, data quality is poor when you compare to data you’ve collected yourself. Regardless, third-party data does play a role in the overall data strategy for many companies.
Someone else’s first-party data
Second-party data is someone else’s first-party data. For example, if you’re working with an advertising partner to distribute your message, you’re using second-party data. Or, say you’re cross-promoting your product with a partner who sells a synergistic product. Yes, you guessed it—also second-party data. The key to useful second-party data is to work with a partner who owns their data. This will help with segmentation and is essential for audience extension programs, such as off-network retargeting.
You can also augment your first-party data with second-party data. Some organizations offer data matching services, which can help you fill in the holes that exist in your first-party data.
Data you own
This category of data is the best quality, with the most utility, because you own it. You collect first-party data over time by engaging with your audience list. This data can be cookie-based and may contain a cross section of information. There are many data sources for first-party data, like your audience’s web behavior and information in your CRM.
Data ownership is essential if you wish to employ retargeting and remarketing tactics in your campaign. Personalized recognition and one-to-one retargeting and remarketing are only available for first-party data.
First-party data is the most difficult to collect because you have to provide value that gives you permission to ask for audience data. This concept is important to understand when partnering with other companies to distribute your message. Make sure you ask them about the source of their database. If you’re paying for advertising, you want to make sure your partner is distributing your message to the first-party database that they have curated.
An Example of First-Party Data Use
You have an advertising campaign that you are running through your house database (your first-party data), and you decide to augment it with an advertising campaign. Your goal is to target a different audience subset to reduce overlap between your effort and the advertising effort.
If you reach out to an advertising partner for support, would you rather send to their first-party database that they’ve collected over time and can segment and remarket to? Or would you rather your paid advertising partner go to yet another data provider to subcontract that data needed for your campaign? It is essential to know where the advertising database is coming from to optimize campaign results. You contracting the use of an advertiser’s first-party database is much stronger for your results than you contracting a partner who doesn’t own the data who will then have to turn around and further dilute the data quality by bringing another, typically third-party, data source into the mix.
Historically, many publishers have leveraged third-party data sources for ad targeting due to its broad availability. However, in an environment of evolving consumer preferences, we’re seeing a shift away from third-party data. For example, in May, the New York Times announced they’d be phasing out of all their third-party advertising data. In response to the shift in consumer behavior as a result of the pandemic, Condé Nast doubled down on their data collection practices.
Data for Campaign Success
We’ve all seen the shift in digital consumer behavior since the beginning of the pandemic. It’s forcing us all to get more strategic about our digital campaigns and up our data savvy. Before you launch any campaign, make sure you have a firm grasp of your target audience and how the data you plan to use for your campaign was collected. Ask your partners about the sources of their data to make sure you’re getting the best results possible for your campaign.