Types of Data

First-Party, Second-Party, Third-Party

and CRM
 Types of Data: First-Party, Second-Party, Third-Party
First-party data is information a company collects directly from its customers and
owns. First-party data (also known as 1P data) is part of the mosaic of data that
marketers have at their disposal. It can complement, enhance, and reduce the need
for other types of data.

First-Party Data: What is it? First-party data is data about a company’s customers
that is collected and owned by that company. Information about customers is
compiled through software and systems that the company itself owns. The company
can use this data (digital interactions, purchase history, behavior, preferences, etc.)
to create ads, content, and experiences catering to an individual’s interests.

Example: The company can use first-party data including web or mobile app
behavior, in-store or call center interactions, purchase history, and loyalty status to
create a targeted ad for an individual customer.
 Types of Data: First-Party, Second-Party, Third-Party
Second-Party Data: What is it? Second-party data is first-party data from a trusted partner.
This data can help a company achieve greater scale than relying on its own data, and
because the data isn’t sold openly, it can provide greater value than third-party data, which
is usually available to anyone who wants to buy it.
Example: A credit card company might get customer information from an airline, so it can
target its marketing toward specific traveler needs and interests. Or a publisher might share
its first-party audience data with an advertiser who wants to run ads on its site.
Third-Party Data: What is it? Unlike first-party data, third-party data usually comes not
from the direct relationship between a customer and an intermediary (such as Acxiom), but
an outside source that has collected the data. Third-party data often comes from a variety of
sources across the web, and this data is then aggregated, segmented, and sold to companies
for their own advertising use.
Example: A ski lodge wants to advertise to skiers who live in Colorado, so it buys a list
from a data company of internet users in Colorado who have shopped online for skis at
some point. The ski lodge shows ads to those users.
 Leveraging First-Party Data
Customers who have previously interacted and transacted with the brand have given
the firm the most precious of marketing assets: first-party data.

However, many firms lack the right technologies and data strategies to fully
leverage its potential and hence turn to third-party resources to fill in the holes.

While data from third-party sources can enhance acquisition strategies, it can’t
explain a customer’s relationship with a brand and their path to purchase.

More importantly, there’s nothing unique to third-party data that can just as easily
be sold to a competitor. And then there are the inherent issues to working with third-
party data — quality, accuracy and recency, not to mention the expense.
 Leveraging First-Party Data
While using first-party data to market to known customers is not a new concept for retention
strategies, the approach for doing so is.
Thanks to the evolution of customer intelligence solutions, marketers can now integrate all
of a brand’s offline and online first-party data to reach and engage actual customers
wherever they are in their decision journey.

In this age of consumer empowerment, creating the type of personalized and highly targeted
experiences that drive brand loyalty and retention means being able to understand and
respond to customer wants, needs and intent with 1:1 contextual relevancy.

What better way than using the actual data that details every customer interaction with your
brand?

First-party data -- It’s fresh. It’s free. It’s yours.

 Sources of First-Party Data
Today’s consumers interact with brands across multiple devices and channels, both
digital and offline. It’s a complex and fast-changing landscape, with new
touchpoints constantly emerging.

The key benefit to all these touchpoints is that they allow brands to collect a wealth
of first-party data about their customers. This proprietary data can be connected to
individual profiles to resolve identity and drive a deeper understanding of how
consumers behave, what they want and where they are in their buyer journeys.

Here are the likely places where you’ll find First-Party data.
Website: A company’s website can provide a wealth of data on site visitors, from
names and email addresses to visitor behavior and transactions. Plus, there are
additional behaviors that can be tracked (such as when users hover over text or
images) for specific retargeting strategies.
 Sources of First-Party Data
Mobile apps: App users are some of the brand’s most enthusiastic supporters —
after all, they made the effort to download the app. To ensure useful data is being
extracted from a brand app, marketers need to define which user events are
meaningful and be sure to log and measure them.

Email and SMS: Email offers data like open rates, click rates and bounce rates that
date back to the beginnings of brand’s digital marketing efforts. Plus, the granular
data on who is and when they are opening emails and whose interest is flagging
allows marketers to segment audiences and run specific campaigns targeted to
different levels of engagement.

SMS data is similar, because text messaging is an intimate form of communication.

Customers who allow brands to engage with them via SMS show a high level of
interest.
 Sources of First-Party Data
Point of sale and CRM: This offline data may be a brand’s greatest source for
online targeting and activation of its best customers — particularly, the level of
personalization it affords by knowing a shopper’s purchase history.
This data is also very useful for measurement and analysis: brands can see what’s
selling, what’s not and where.
Beacons: The next step for retailers, beacons yield new kinds of in-store and
location-based customer data. Beacons offer enormous data potential, as they
capture detailed aspects about a consumer’s behavior.
Call centers: Sometimes the most important customer interactions happen at call
centers. They are often where new accounts are initiated and where problems
surface.
While a brand may have invested in automation systems and training to improve
selling and service, the rich data being produced should not be overlooked.
 First-Party Data Use Cases: The Big Picture
Improve targeting precision: To achieve true addressability and targeting efficiency,
marketers need to shift away from cookie-based tactics toward strategies that
leverage a brand’s own first-party data to identify real people across devices and
channels.

Addressability is the ability to target people or households rather than programs.

Addressability combines data and campaign objectives with a deep understanding of
customer needs to deliver a tailor-made experience.

With the right insights, addressability allows you to spend your ad dollars on
audiences who meet specific parameters you dictate.

First-party data helps marketers enhance accuracy and relevancy, reduce ad waste
and, ultimately, drive ROI.
 First-Party Data Use Cases: The Big Picture
Map the customer journey: By integrating and accessing first-party data from one
customer identity asset, marketers can map the buyer journey, discovering the different
steps that consumers take on their path to conversion as well as the order in which they
take them.

This, in turn, helps marketers deploy the right message at the right time and place,
informing strategies to pull customers back on the road to conversion.
Create a single view of the customer: Each customer is represented by multiple
individual, anonymous profiles as they engage with a brand offline and online across
the web, mobile apps, email, brick-and-mortar stores, call centers and other
touchpoints.

Merging these profiles into a single customer view allows marketers to understand
what inspires customers to take action across different channels, devices and
platforms.
 Challenges to Using First-Party Data
Lack of a Data Strategy: Firm has to create a strategy first, and that means knowing
what sources you have, what you’re collecting, and mapping it across the customer
journey as you understand it. The strategy will guide the process, and it must be
customized for the touchpoints that are relevant to your brand.

Resolving Identity and Building Profiles: Due to the variety of channels in which
customers engage with the brand, the customer data exists in multiple profiles
across various platforms.

To unlock the potential of first-party data, these multiple profiles need to be merged
into a single view of each customer.

This single customer view makes it easier to send the right message at the right
time, without wasting marketing dollars or overwhelming the customer.
 Challenges to Using First-Party Data
Integrating Data Across Platforms: Integration is hard. A lot of the customer
engagement data lives in the fragmented silos of the third-party technology partners.
Even though these partners have gathered the data on your behalf, getting it all
together in one place can be difficult.

Pulling the data out from these silos and into one place will help in understanding
the big picture and the outlines of the customer profiles will begin to take shape. To
pull all the channel data together, will need purpose-built tools.

Acting in Real Time: The value of data decays quickly. A first-party network must
be able to distribute data to the internal and external media execution partners in
order to take advantage of what is known about each customer, before the window
of opportunity closes.