I have referred to 1st party and 3rd party data in a lot of blog posts. Based on the queries I get, both via email and in the classes I teach, it is time to clarify what various data sources mean.
1st Party Data
1st party data is the data that you (brand/publisher/retailer) have collected about your visitors, customers, shoppers etc. You own the data outright and all the rights to it. You can use it for any purpose you want based on the agreements with your visitors, customers, shoppers etc. as specified in your data collection and use policies. Some examples of 1st party data are:
- Site registration data – name, email, address, gender etc.
- Visitors behavior data on your site – time of visits, minutes spent, products looked at, source of visits etc.
- Shoppers/customers purchase data – products purchased, transaction amounts, coupons used etc.
- Email data – emails sent, opened, clicked etc.
- It is most widely used data for the marketing purposes. Generally, you use the 1st party data for customer retention using email marketing, retargeting and onsite personalization.
2nd Party Data
2nd party data is the data that is collected by some other company and shared with you(brand/publisher/retailer), in other words it is their first party data. A strategic data sharing partnership between two brands/publishers can help both of them grow their customer base and monetize that customer base.
You can generally use 2nd party data to:
- Augment the data you already have about your customers (or visitors) – for example, if you do not collect “Household Income” during customer registration/signup data but have a need for that data you can partner with another brand that collects that data to get that data to enhance user profile. Another example is Google Adwords sending the keyword/campaign data to enhance behavioral data collected on the site.
- Add a list of new customers – for example, if you are hotel booking site, you can have a partnership with airline to share information about customers who recently booked. If a customer books a flight, then you can use the data from partner to reach those customers and offer them hotels. Similarly, the airline partner can reach the customers who have booked hotel on your site.
3rd Party Data
3rd party data is the data collected and aggregated by someone other than the 1st party (data collector). In other words, the data aggregator doesn’t directly collect the data from customers/shoppers/visitors but have relationships with several companies/sources that collect the 1st party data. Some examples of the 3rd party data provider are BlueKai, Acxiom and i-behavior. These data providers aggregate the data from different sources to build a comprehensive profile of a customer/person. These enhanced profile let you understand a visitor/shopper more than what a 1st party or 2nd party data sets can provide.
For example, if you are a Financial institution, it will be very helpful for you to know which of your customers travel frequently, this will help you offer them a credit card that provides added travel rewards and benefits. This is where 3rd party data becomes useful that can provide such information based on data collected from various data sources such as hotel booking sites, airlines, location based data on several other places, other credit card providers etc