Second-party data is data that has been collected by a business with a direct relationship to an audience, which is then sold to another business.
It is data your company obtains by purchasing first-party data from another company, and is usually well-qualified, offering you control over the information you’re purchasing – you get data directly from the company that has collected it. This information can give you many insights about your target audience that you wouldn’t have if you were analyzing your own audience alone.
And using audience data or customer data is essential for any online business nowadays. Whether it is to improve your marketing campaigns and budget allocation or to increase your revenue and Customer Lifetime Value, the more data you have, the better. But not only that: the secret for great data-driven marketing is to have diversified information.
This is why it’s so important to focus not only on zero- or first-party data – the information that comes straight from your customers – but also second and third-party data to help you add value to your commercial strategy and provide a greater range of insights.
Second-party data offers you many benefits and can be a great complement to your company’s strategy. That’s what we are going to discuss in this article. If you’re interested in learning more, keep reading!
What Does Second-Party Data Mean?
Second-party data is information that you didn’t collect yourself, whereas first-party data is collected by your business directly from visitors, prospects, or customers. It’s essentially another company’s first-party data, usually a business partner or other cooperating company.
In other words, it means that the data you’re getting is data that the customer didn’t share directly with you. The customer shared his information with another business that then sold it to your company.
Example
Let’s say you own a men’s dress shoe store, and you’re planning on running a campaign to advertise some of your products. What you can do is talk to another business – perhaps a store that sells suits and dress shirts – to work out a partnership or purchase the data they collect directly from their customers who have bought dress shirts or suits.
Another option is to talk to a publisher who creates content in your niche (men’s dress shoes) or about topics related to your niche (men’s fashion, tailored suits, etc.). Then, when you are setting up your ads, you can target any of those audiences in your campaign.
If you don’t know any businesses that could sell you reputable data, you can utilize marketplaces (more on that later in this article).
Why Is It Important?
Second-party data has many benefits that can help you improve your business performance. With the correct data set, you can add depth and value to your first- and zero-party data. This kind of data is usually high-quality and more precise than data that is aggregated from various sources.
Here are a few reasons why this kind of data is essential:
It increases the amount of data you have, since zero- and first-party data are typically somewhat limited.
It helps you reach new audiences since you generally buy this data from companies that don’t necessarily have the same clientele as you.
You can predict customer behavior better since it adds more information to the data you already have from your existing customers, making your pool of data more robust.
It’s possible to use this data to turn that audience into new customers by watching their preferences, interests, and behaviors, as long as they are interested in a similar product or niche.
You’ll have access to high-quality data and accurate information – as long as it is purchased from a trusted source and someone within your business’ niche.
It’s transparent, as it’s always collected with the user’s consent.
While this kind of data does not include information about your audience, it’s still beneficial if you find a proper data set. It scales your data, and you can reach new audiences with it, predict different customer behaviors, and more.
Though you might find zero-party and first-party data more valuable, you should definitely consider sourcing second-party data as well.
How to Collect It
In order to access second-party data, you will need to purchase it from another business that sells it. Finding them is not as hard as it might sound, as the number of sellers has spiked 460% recently.
Essentially, there are three ways you can purchase this kind of data. You can either buy it directly from a business, a publisher, or a marketplace.
1. Businesses
An excellent way to get this kind of data is by approaching other businesses in your niche and partnering with them or purchasing the information they’ve collected. It’s an interesting approach since you can get very qualified leads if you make the right partnership. However, it lacks scale since there are only a small number of companies you can feasibly approach.
2. Publishers
This is another good source if you’re thinking of buying this type of data. If you can find publishers that create content within your niche, you’ll have access to a robust list of potential customers, which will drastically impact your ad targeting. However, just like direct contact with businesses, it can be a bit time-consuming since you need to contact the publishers directly.
3. Marketplaces
There are a few marketplaces that sell this kind of data. They serve as a hub to connect businesses that want to sell their data with those that want to buy it. Since they are marketplaces, they offer data from various sources and usually have better deals.
Here are some of the biggest names in the industry:
Lotame
AudiencePrime
Salesforce
Narrative I/O
Adobe
Dawex
LiveRamp
HubSpot
Eyeota
Adelphic
OwnerIQ
How to Use Second-Party Data for ECommerce
You can use second-party data in many ways. Here are a few ideas to boost your eCommerce success with this data:
Display ads to new audiences to widen your reach and increase brand awareness and sales.
Target a segment of your audience with campaigns across different channels.
Adjust prices and discounts based on the way these customers behave.
Use the data to create new buyer personas for new products and services.
Create better segmentation and use it to boost your sales through a more accurate and broader data pool.
Use it to create lookalike audiences in your Facebook Ads account.
Profit from selling your first-party data to other companies.
Want to know more about all types of data out there? Then check out the other articles of this series:
FAQs
What is the Difference Between Second and Third-Party Data?
While second-party data is the data collected by a company directly from its customers and then sold to another company, third-party data is data gathered from multiple sources and then sold by a company, called a third-party aggregator.
On the other hand, third-party aggregators don’t collect data directly from the audience; they collect it from several other businesses and then compile it into one dataset.
The most significant difference between third-party and the other kinds of data is that it isn’t always collected with the users’ consent. It’s also not as accurate as the others, but it’s still worth considering, especially in some specific cases.