Even though marketers collect copious amounts of first-party data, most find they need more in order to optimize their digital marketing strategies. In fact, in a recent survey, 6 out of 10 rely moderately or extensively on third-party data[i]. In such cases, they often do so without really knowing where that data has been!
First party data is data a company collects directly from its customers or prospects, such as when they visit the company website or fill in electronic forms that populate CRM databases. Third party data is purchased from somebody else, typically an aggregator that has acquired it from other sources, such as publishers or web crawlers, without any direct contact with the customer or prospect. Third-party data is available in volume, but its also available to everyone, and the quality may often be dubious.
“Many companies rely on third-party data to enrich their forecasts and analyses,” writes Ritika Puri for Dun and Bradstreet Connectors. However, she adds, “third-party data can be a mixed bag for B2B and B2C marketing teams that pull the trigger on a purchase without fully understanding what they’re buying. Often licensees have limited insight into how information might have been collected, whether it’s been verified or just scraped online—or if it’s even accurate or legal.”
A recent study by Econsultancy and Signal finds that 82% of all marketers surveyed plan to increase their use of first-party data, while 1 in 4 marketers plan to decrease their use of third-party data[ii].
Webtrends’ Jeff Seacrist wrote that, “Though third-party data can be useful in the marketing process, a skilled and nuanced first-party data strategy is a more reliable and respectful way to deliver offers with a higher likelihood of engagement and conversion[iii].”
Sounds great, so why doesn’t everyone rely on first-party data? Well, because it’s easier said than done. According to Experian, first-party data “is often segmented and divided among many databases[iv]” within an organization. According to an Experian data quality survey, average large organizations have data segmented across eight different databases as well as spreadsheets and other separate files. Additionally, it said, “many organizations suffer from a high level of poor data quality. Data quality is essential to achieving a single customer view.”
Essentially, third-party data has scale but poor quality, while first-party data has high quality but is hard to manage and keep accurate. There’s a growing interest in yet another form, second party data, intended to combine the best attributes of both.
“Second-party data is someone else’s first-party data, so it’s a gold mine of unique information,” Omar Tawakol, CEO of Oracle’s BlueKai acquisition, wrote in an Advertising Age article last year.
Here at SimplyDIRECT, our focus is on providing high-quality, easy to use prospect data. Our database building process yields up-to-date, role based contacts, with all contact information phone validated to ensure accuracy. The database is customized, unique and owned outright by the client. In essence, SimplyDIRECT becomes a trusted partner, providing externally sourced data with the quality levels expected of first-party data.
To learn more, read this case study on how Kronos leveraged SimplyDIRECT’s survey-based lead generation programs into its marketing process.