The basics…  Zero to 3rd party data. 

Until a few years ago, marketing and data looked like two different worlds. Creativity, originality, brand reputation and value or consumer emotions were intangible and difficult-to-measure items. However, as William Thomson said “What is not measured, cannot be improved. What is not improved, is always degraded”.

So how can we improve our marketing strategy? Here is where data comes into play. In an increasingly digitized world, data is considered the gold of the 21st century. Through it we can understand consumer behavior and interests, as well as measure the success of our campaigns.

To carry out a marketing campaign, it is important to previously establish who your target audience is, what you want to communicate, how and when is the best time to do it, among many other details. These aspects are fundamental when segmenting by audience in programmatic advertising campaigns in order to make informed decisions and offer relevant experiences for users. As a tool for all of this, we rely on the data we collect from users. 

Nonetheless, not all data is equal! It is important to know the quality and provenance of the data. Currently there are four main types of data, let’s see how you can differentiate them!

FIRST-PARTY DATA

First-Party Data is information collected by the company itself directly from users. It provides us a global view of the customer including insights such as behavior, preferences and interactions. 

In the offline world an example of First-Party data would be the information collected at a point of sale, such as the name, address or postal code that we are asked for in some stores. In the online world it ranges from names or emails to purchase history, location, web behavior information and social media interactions.

Website visitors are involved in a “customer journey” where they go through multiple contact points that allow this type of data to be collected, i.e. it is collected through pixels on the website, through a CRM or a data management platform.

We must remember that this data is considered private and personal and it is regulated by the GDPR (General Data Protection Regulation), so mishandling it can damage the relationship with the client.

Now we are clear about what first-party data is and how it is collected, let’s see all we can do with it!

¿WHAT IS FIRST-PARTY DATA USED FOR?

First-Party Data is used to personalize customer experiences or to drive targeted marketing campaigns. Specifically the most common use cases are the following: 

• Retargeting: attract users who have previously interacted with your brand and either did not complete any desired action, or did but you want to impact them with new products or at different points in the process.

• Lookalike audiences: expand your audience to users that are similar to the ones who have made a conversion or a specific desired action on your website, so that it would be more likely to prospect new customers and for them to convert. 

• Exclude audiences: avoid targeting certain users, such as customers when you only want to attract new ones. 

SECOND-PARTY DATA

Second-Party Data are practically the same as first-party with the difference that they are collected by other companies and exchanged under a previous agreement for the benefit of both parties. Therefore, they are considered a complement to 1st-Party Data enabling you to reach new customers and more informed decision making. An example of that data could be an airline and a hotel chain sharing information about their respective customers that is relevant to both parties.

One of the advantages of this type of data is that you know the company who is sharing their data with you so you know where it comes from and it is easy to know the quality of the data and whether it complies with the necessary permissions.

These companies looking to share information and monetize their datasets sometimes are collected in a place called data marketplace where the exchange of data takes place. These are secure and trusted environments and ensure that the partners you can connect with are also secure. There you can negotiate and get only the information you need.

As they can be collected from various sources, 2nd-Party Data are usually more specific and as they are similar to 1st-Party, can be used for the same use cases discussed above. Besides, if these two are combined, you can broaden your audience by matching them with your existing audience and reach a much larger group of people. In this way you can develop better audience insights that allow you to improve your strategy and target new users.

THIRD-PARTY DATA

These are data provided by sources outside the company such as external providers or specialized data management and analysis companies. They offer large-scale information already segmented, normalized and tested, with which to obtain a broad view of the market and have access to a wider audience

Unlike the two previous types, Third-Party Data are not collected directly from customers but can come from different companies and include different datasets gathered in a single one. That is why there is no clear definition of the origin or timeliness of these data, making it difficult to ensure that they are reliable or that they were collected in compliance with privacy regulations.

They are obtained through data providers or data suppliers, who pay owners of different Internet environments to collect information about their visitors. In this way they collect audiences, cookies, IDs… They classify and organize them to build detailed profiles of users and later sell them. They include demographic information as well as tastes and preferences, behavior…

Furthermore, they can be obtained through a DSP (Demand Side Platform) or a DMP (Data Management Platform), which nowadays are also acting as data providers. In addition, through third-party data marketplaces it is possible to share and sell them.

Due to the great unknown of the provenance of these data, when choosing a provider to obtain them, it is recommended to do some research in order to understand as much as possible about how and where the data was collected and thus have some information about the quality. Also there are other important aspects such as the size of the audience data in the country or city of interest as well as the price.

ZERO-PARTY DATA

This is a special type of data since it is the customer him or herself who intentionally shares his or her data with your brand. 

Zero-Party Data can be easily confused with 1st-Party as it is information collected directly from customers. To differentiate them we must know that the main difference between them is that in the case of Zero-Party the intention of the customer is to offer him or her information and no technology is needed to obtain it. In addition, they generally do so expecting to receive something in return, such as discounts, gifts, coupons…

They can be obtained for example through surveys on social networks or on the website, registration forms that ask for additional information, after-sales questionnaires…

They can be both purchase intention data and personal context. Through them we can also get an idea of how the client wants to be recognized by the brand. For example: communication preferences or type of information they would like to receive. This data can be used to create a personalized user experience as well as product recommendations for customer loyalty and personalized email marketing. Also like the previous data types this can be used to segment your actual customers based on the information they have given you.

In the world of programmatic advertising data is key to understanding your audience and improving your strategy. First-Party Data collected directly from your users, offers a deep understanding of them that allows you to segment your audience and improve campaigns, along with Second-Party Data you can expand your reach; Third-Party Data will allow you to scale and target massively; and Zero-Party Data shared directly by customer will also help you to personalize their experiences to the maximum. By intelligently combining this data, you can take your marketing to the next level.

Want to learn more about how to accurately and precisely segment through this data, and leverage its power in your marketing strategies?

At BidBalance we are here to help you, visit us on our website and discover everything we can offer you at our programmatic advertising agency!