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Third-party vs. second-party vs. first-party data

Last updated: 14/09/2022

Watch the video or read below to learn about: 

  • Cookies and why they are important for marketers
  • The difference between first-party, second-party and third-party cookies
  • What to do in a cookieless world

What is the meaning of terms like third-party, second-party, and first-party data? In this post, we'll explore the differences between these types of data and examine how you can use each to improve your marketing strategy and campaigns. 

 

Cookies are a gold mine for marketers

Cookies. We all love them, but marketers love them more. Why? Because cookies allow marketers to get what they love even more than cookies - data!  

With cookies, marketers can see things like who visited their website, track behavior, and understand what makes the best customer. They can do better targeting, better ads, and better marketing with all that information by looking at various audience segments. 

1st 2nd 3rd party data

But, not all data is the same as you collect and manage it. You have first, second and third-party data. Read on to learn more!

Collect first-party data! 

The data that you have collected yourself is called first-party. It can come from any source and includes website traffic, survey responses, or customer data stored in your CRM system. This can be very valuable data. 

First-party information means everything we know about our customers' interaction - their preferences; what they buy online, etc. This gives us an edge over competitors because this info comes straight from our very own audience data!

Some example data points are: 

  • Purchase history
  • Time spent on a website 
  • Number of visits
  • Emails 
  • Phone numbers 

Also read our guide on using first party data in your marketing strategy, about collecting first party data and putting it to work.

The importance of consent when using consumer data

The user's consent is key to how marketers use their first-party data. And with GDPR, they need this now more than ever before since consumers have rights under European Union law. These rights include controlling what information companies collect about them and getting verifiable informed consent before processing any personal details. Online activities, like browsing habits or purchase history, are not exempt from this. 

As long as it was generated from sources you own, your first-party data is considered more valuable than any other kind of business data.

Another way to leverage first party data is to send customers customized emails, for instance containing specific products they looked at in an app or webshop.

In short, first party data is essential to a modern company's marketing efforts. Marketers can do many things with first-party data, such as creating ideal customer profiles to better plan future campaigns or using website behavior to optimize landing pages for visitors. 

In short, marketers can improve campaign planning abilities because marketers know who's most likely interested or what products they would prefer (based on previous purchases). But it’s essential that your customers see you as a trusted partner who provides an optimal customer experience. 

What’s second-party data?

Second-party data is first-party data shared with you by another company, usually a trusted partner. 

For example, imagine you own a hotel booking website, and you establish a partnership with an air travel website, and you both start sharing data. 

Now you have access to people that bought tickets to particular destinations and can target them with specific ads for hotels on those destinations. Pretty clever, right? 

In practice, what's happening is you are allowing each other access to your first-party data. And that is 2nd party data to you.

 

Finally, we have third-party data 

Third-party data is data collected by a business or company with no relationship with you or the customer.

This kind of data will be aggregated in big lists like, "People who enjoy football," or "People who like dogs" on social media. This can be powerful, but you need to know from whom you're buying data so you can guarantee quality. 

And if you buy a 3rd party data set (for instance: a list of people who like dogs, including their email address and demographics), make sure that this data is gathered in an honest way. Try asking the data marketplace or the vendor of the data, if the set contains customer data of people that gave consent to the sharing and reselling of their data.

It's worth bearing in mind that the data quality varies from type to type. Also, as privacy laws become more stringent and browsers restrict third-party cookies, many see the use of third-party cookies coming to an end. 

It's time to get serious about data 

As the world moves towards a "cookieless" future, marketers are being advised that they harness their power of first-party data and customer relationships--that is what you have complete control over how it’s collected and organized. Some companies do this by implementing specific data strategies, including:

  • Nudging website users to create an account early on, so you can gather more information about them (as first party data)
  • Partner up with publishers and other companies, and exchange data. This is especially smart if you have the same target audience
  • Set up a marketing data warehouse or data management platform, so you leverage the data you have in the best way possible and get real time insights
  • Keep up to date about digital privacy laws in the countries you operate in, and prevent breaching these laws.

 

Visual representation of 1st 2nd and 3rd party data:

First party data vs second party data vs third party data

Summary: first party data vs second party data vs third party data

  • First party data collection happens when a company collects data on their own platforms, like their app or website;
  • Second party data is data that is shared or sold by one company with another company, where these two companies know and trust each other;
  • Third party data is data collected by companies that don't have a direct relationship with the buying party, and can be bought at an online third party data marketplace. 

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