First, Second and Third-Party Data

Information obtained from several channels gives a more detailed picture of your audience, helps to personalize and scale your business and makes it possible to predict user behavior. There are several different types of data used for different tasks. By the way of obtaining and uniqueness, there are 1st, 2nd and 3rd party data. In this article, we will take a closer look at these types of data, learn how to use them in marketing and how to collect information about customers without violating confidentiality.

What is 1st Party Data

• user behavior and time spent on websites and in apps;
• results of email and SMS newsletters (open rate, clicks);
• contact details: email address, phone number;
• information about customer orders;
• feedback;
• demographic data;
• user survey results;
• behavior in social networks;
• interests.

• It helps to learn about the needs of customers in detail and offer them products that they will definitely purchase.
• It personalizes offers and content for customers.
• It helps to launch advertising and retargeting campaigns.
• It makes it possible to predict customer behavior.

What is 2nd Party Data

• It helps to scale your business. It's difficult to broaden your audience only with 1st party data. If you don't have 2nd party data, you can make a mistake and take wrong actions when working with a new audience. With second-party data, it's easier to launch the first advertising campaigns.

• It serves as an addition to first-party data. With 2nd party data, you will see problems in the sales funnel.
• It helps to track trends. Your conclusions will lack objectivity if you have only first-party data.
• It strengthens partnership. When you exchange data, you increase trust between businesses.
• It brings unexpected ideas to creative companies.

What is 3rd Party Data

• gender data;
• interests;
• income level;
• geographic data;
• professions.

• Use it to expand 1st party data, study your audience in detail and increase personalization.
• Study and get ideas for business development. 3rd party data provides you with a larger audience reach that 1st and 2nd party data.
• Launch targeted advertising for a potential audience.
• Track global trends.

If you have all three types of data, you have a comprehensive picture of your audience. The more you know about your customer, the easier it is to reach them and sell your product faster.

How to Collect Data

The current tendency in the world is to increase the privacy of personal information. Data collection is limited by legislation and by companies that collect data.

The Russian Federal Law on Personal Data prohibits disclosing user data to third parties without consent.

Google restricts cookies for 3rd party data in the Chrome browser. The company is planning to get rid of third-party cookies during 2022 to enhance user privacy. This approach is the obstacle to tracking customers’ interests and journey to conversion. It will become difficult or impossible for end-to-end analytics to find out customer journey through cross-devices.

Apple restricts third-party cookies (Intelligent Tracking Prevention) for Safari browser (from 13.1). The browser restricts the collection of data from third-party services. IOS 14.5 now requests confirmation to collect information via IDFA (The Identifier for Advertisers). If the user doesn't confirm, the accuracy of data decreases. Apple offers an alternative — anonymous aggregated data. However, it won't be enough to cover all marketing needs with such information.

Data Collection Rules

• Prioritize 1st party data, collect 2nd party data to build your own data system and be less dependent on 3rd party data.
• Notify users about data collection and ask their permission for its processing. You can't consider people whose data is collected secretly your target audience.
• Follow the legislation on user data protection and the rules of the information market.

Conclusion

Marketing can't function properly without data. However, not all types of data are equally useful. There are 1st, 2nd and 3rd party data. First-party data is obtained directly from users. Second-party data is the 1st party data that companies buy from partners and businesses with a similar target audience. Third-party data is obtained from aggregators that buy information from companies or collect it themselves.

1st party data is reliable and easy to collect, but not suitable for scaling your business. 2nd party data expands your audience, but it’s difficult to test its validity. 3rd party data contains a lot of information, but you can't be sure of its reliability. Third-party data is also available to competitors.

Regulations of aggregators and state laws slow down the collection of information. Companies should monitor changes, create their own data collection and storage systems so as not to depend on third-parties.