NEW YORK: Second-party data is an effective, if under-utilised, source of information for marketers but one industry figure has observed that situation beginning to change.
"Choosing between first-party and third-party data has been a constant dilemma forcing marketers to compromise between data quality and scale," Mike Sands, CEO at marketing technology firm Signal, wrote in Ad Exchanger.
"Now I'm seeing the conversation shift to second-party data, which is essentially someone else's first-party data."
A recent report by Signal and Econsultancy – The Promise of First-Party Data, based on responses from 300 senior marketers at companies with at least $100m in revenues – highlighted that the fact that brands' owned, first-party data is the shortest and best path to superior results.
Third party data, while plentiful, is often based on inferences about intended behaviours rather than facts derived through first-hand customer relationships, Sands noted.
But there are areas where second-party data can be shared to mutual advantage. For example, an airline and hotel chain could work together to target the same business travellers with the benefit of both data sets.
Sands pointed out that second-party data could help marketers address the challenge of developing an overview of customers across devices and channels and so target marketing activities more appropriately and create more personalised brand experiences.
Signal's study showed that 77% of the highest-performing marketers regularly used second-party data, versus only 48% of their counterparts.
And 60% of marketers planned to increase their use of second-party data, a clear indication they are increasingly aware of the value in sharing such data.
Quite apart from making better marketing possible, Sands added, "second-party data can help brands monetise their data.
"Brands can add a revenue stream by sharing anonymized data with trusted partners."
Data sourced from Ad Exchanger, Econsultancy; additional content by Warc staff