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The Difference Between First, Second, and Third Party Data and How to Use Them


In managing display advertising campaigns, it’’s important to make the most of your budget by taking advantage of all available forms of intelligence about your audience. That way, you can determine how to most efficiently and effectively reach them. ReTargeter uses three kinds of audience intelligence data to optimize ad campaigns: first, second, and third party. All are important.

First Party Data: The Best Stuff

First party data is loosely defined as information you yourself have collected about your audience. (The “first party” is you.) In the context of display advertising, first-party data is most often cookie-based data, and it can include information gathered from website analytics platforms, CRM systems, and business analysis tools.

In general, first-party data is the most valuable data you can collect about your audience, and it becomes a powerful resource when tied to display ad campaign design. Because first-party data provides specifics about your already-existing users and customers, it’’s the key component of Site retargeting and CRM retargeting.

With first-party data, you can target returning customers by leveraging information that you already have about their past purchases and product interests. This strategy is a major element in Amazon’’s astonishing success: their personalized recommendations of books and other products are a perfect first-party data example. Overall, the more dynamic and personalized the ad, the better the chances for conversion.

First party data is always the most useful and valuable, but eventually you’’re likely to find yourself in a position where you want to reach an audience that you don’t have first-hand information about. This is where second-party and third-party data become useful.

Second Party Data: The Next Best Stuff

Second-party data is essentially someone else’’s first-party data. Second-party data isn’’t usually commoditized, but you can often work out an arrangement with trusted partners who are willing to share their customer data with you (and vice versa). For instance, a high-end watch company might partner with a yacht blog to find new customers, based on demographic overlap. Second-party also plays a large role in audience extension and audience targeting. The possibilities are endless, and the key is to seek out, form, and maintain mutually beneficial partnerships.

Third Party Data: The Broadest Stuff

Companies such as BlueKai, Peer39, and eXelate sell third-party data. These companies are also known as Data Aggregators. They’’re the behemoths of the data world.

The data these large companies provide is typically purchased on a large scale from publishers. The benefit of third-party data is the sheer volume of user data you can access. However, this data is also widely accessible to competitors, so you aren’’t gaining unique audience intelligence when you tap into third-party data resources.

Third party data is great for demographic, behavioral, and contextual targeting, and can be used to remove bot traffic. It also plays a critical role in solutions like audience targeting and audience extension. Third party data providers charge a fee to use their segments, usually on a CPM basis. Depending on the data, the CPM can be anywhere from $0.50 to $5.00.

The Ideal Strategy

Ideally, you’’ll first define your marketing goals (do you want to focus on reaching new customers, or on increasing revenues from existing customers?) and then partner with a provider like ReTargeter who specializes in campaign optimization.

ReTargeter can then optimize your display ad campaign on a granular level using first and third party data (and second party data, if you have such a partnership) to reach and convert your target audience. That way, you can be sure your online ad display spend is perfectly maximized.

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