WHAT IS THE DIFFERENCE BETWEEN 1ST, 2ND, AND 3RD PARTY DATA?
Data is the cornerstone of the digital world that informs most every business decision we make today. Even still, you’d be surprised how many people don’t know the differences between the 3 main types of data. Here are some basic facts that everyone should know:
1ST PARTY DATA
This is data that you collect directly about your own customers through methods like email marketing, registrations and sign-ups, purchase data, subscriptions, social media analytics, or data from your mobile site or app. 1st party data is often preferred over 2nd and 3rd because, first of all, you own it and will always own it, and, also, it’s free to collect. It’s almost unheard of today for any company not to be collecting their own 1st party data. So if you’re not, start. Like yesterday.
2ND PARTY DATA
This refers to data that is collected by another company and then shared with you. For example, when a traveler books a flight, the airline may share this data (their 1st party data) with a hotel, who then targets that traveler with deals or offers that correspond with things like travel dates or destination. So, 2nd party data actually begins as 1st party data, which is then shared with a partner site.
3RD PARTY DATA
This is aggregate data that you can collect (or purchase) from a number of different sources, companies, or sites. This is not data about your own specific users but about larger segments of the population in general and is used to define and target wide swaths of people (like sports enthusiasts or dog-lovers). For example, a financial institution may buy 3rd party data to know which of its customers are frequent travelers so they can offer travel-specific rewards. One of the primary advantages of 3rd party data is the sheer breadth of information you can acquire about different demographics.