Customer Portfolios' Blog

Using First and Third-Party Data to Fuel Engagement


When one thinks about the digital ecosystem and all the different types of data that comprises it, this brings me back to the memorable scene in Forrest Gump when Bubba is listing off the different types of shrimp. Instead of shrimp, us marketers, are dealing with all different types data. “There’s big data, small data, structured data, unstructured data, first party data, second party data, third party data…,” and the list continues.

But what do all of these different data types mean for businesses? Which are the most relevant? While context plays a large role in determining the most relevant data type and deciding which data type is most relevant for your objectives, undoubtedly the cool new kid on the data block is first-party data and the ability to layer it with third-party data to foster customer engagement.

Defining First-Party and Third-Party Data.

Simply put, first-party data is YOUR data. This is the data that you collect directly from your customers and prospects. First-party data includes information captured through online/offline registration and sales, analytic data captured from visitor instructions on your website and mobile apps, intelligence captured in CRM systems, and information captured from the performance of online and offline marketing campaigns.

On the other hand, third-party data is customer information that is collected by a company that isn’t directly involved in the transaction. Third-party data can be collected in a number of ways. Third parties include Acxiom and Experian, and any other third party entity that aggregates, analyzes, classifies, and segments user data from a number of different types. The result is data that can be used to provide an additional layer of specific audience information.

When you marry third-party data with first-party data it enables you to understand how customers behave and engage across online and offline. When you use first or third party data in isolation, it paints an incomplete picture and does not allow brands to fully close the loop and connect the customer behavior and attribute dots.

For an example, if a prospective customer clicks on a banner ad and then visits the retailers website, the retailer is likely unable to know much about the prospect if they are strictly using first-party data.

However, when you combine the power of third-party data to first-party data, the retailer is able to understand who the prospect is (i.e., demographic information), what products they are interested in, and as a result, the retailer is able to create an engagement strategy that meets the needs of prospect. The retailer can tailor the content it displays on its website to be aligned with the cues and behaviors the prospect has exhibits.

Who benefits from first-party and third-party data?

When first-party and third-party data are layered together, it is a win-win for the retailer and the customer and/or prospect. The retailer is able to create 1:1 experiences that evoke engagement, and ideally, a transaction. From the perspective of the customer or prospect, they are happy because they are seeing content that resonates with them and their needs.

In summary, it’s easy to get lost in the sea of data and feel overwhelmed with all the various types of of data. However, when you bring together multiple layers of data (i.e., first-party and third-party data), this enables organizations to create a sophisticated engagement and communication strategy that incorporates personalized communication, targeting, and segmentation.

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