Lead Generation

Comparing first-party vs. third-party data in advertising

Sell to Win Team
Contributor
Sell to Win Team
Contributor
Comparing first-party vs. third-party data in advertising billboard

Want to use first-party or third-party data to launch ad campaigns that reach your ideal customers and clients but don’t know how they’re different or which one you should use?

The difference between first-party vs. third-party data in advertising is how the data is collected and who is collecting it. First-party data is data you collect directly from your audience. Third-party data is data collected by another entity or business and sold for you to purchase or collect. 

Keep reading to learn more about the difference between first-party and third-party data and which one you should use to launch sales-boosting ad campaigns for your business!

P.S. Looking for a quick and easy way to collect first-party data from your website visitors? Nutshell’s user-friendly CRM platform allows you to collect valuable information about your audience, like their demographics, interests, and much more. 

Sign up for your free trial today!

What is first, second, and third-party data?

So, what are first-party and third-party data? Find out below:

What is first-party data?

First-party data in advertising is data you collect directly from your audience to use in your ad campaigns. First-party data in advertising can include your audience’s:

  • Age
  • Location
  • Gender
  • Job role
  • Website behavior, like which pages they visit and how much time they spend on your website

You can collect first-party data from your website visitors, leads, email subscribers, and current customers or clients. 

What is second-party data?

Second-party data is data that was once first-party data and was then shared with a trusted partner or collaborator. In other words, second-party data is data that you can receive from a business partner who collected it directly from their audience.

For example, let’s say you enter a sweepstakes to win tickets for a show. The company that hosts the sweepstakes will collect your data, like your name and email address. They will then share your data with their partners involved in the sweepstakes, like the theater that provides the tickets.

What is third-party data?

Third-party data in advertising is data collected by another organization or business other than your own that you can collect or purchase to use in your ad campaigns. 

Some third-party data is publicly available, like U.S. Census or Bureau of Labor Statistics data. With third-party data, you can learn about your audience’s demographics, company industry, website browsing history, purchase history, and more.

Related: Buying a lead list: The pros, the cons, and the things that might land you in jail

Collection, purpose, and use of data

Curious about the differences between first-party vs. third-party data or not sure which one you should use in your ad campaigns? We’ve got you covered. First-party and third-party data differ in their collection, purpose, and use. 

View a breakdown of the key differences between first-party vs. third-party data below:

How you collect the data

Third-party and first-party data can be collected from your audience using similar methods. However, the data is often collected by different tools. Additionally, the person you collect the data from is identified and validated differently for each data type. 

First-party data

With first-party data, you collected the data directly from your website visitors, leads, and current customers or clients using your website and channels. 

Because you collect the data yourself, it's stored on your domain so you can decide how you want to use it. You can collect and store first-party data with customer relationship management (CRM) software or a customer data platform (CDP). 

Second-party data

Second-party data is collected from your business partner or another collaborator. You can collect second-party data by partnering with another organization that shares your goals. Since both of your interests are aligned, sharing data can benefit both your sales and marketing efforts.

Third-party data

Third-party data is collected by another organization or entity other than your business. Independent researchers can also collect and store third-party data. 

Because another organization collected the third-party data, they store it on their domain. You can then opt to purchase or collect it for your own use.

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The purpose of the data

Another key difference between first-party and third-party data is their purpose.

First-party data

The purpose of collecting first-party data is to learn about the behavior and interests of your website visitors only. 

You can collect first-party data to learn about your leads’ and current customers’ demographics and website behavior, like which pages they visit and how much time they spend on your website. 

Second-party data

The purpose of collecting second-party data is to gather more data to help inform your sales and marketing efforts. In other words, you can partner with a business similar to yours and exchange data to gather more insights into your target audience. 

Third-party data

The purpose of collecting third-party data is to learn about your target audience’s overall behavior online on websites and channels other than your own. 

You can collect third-party data to learn about your audience’s browsing and purchase history to better understand their interests and online behavior, like which marketing channels they interact with. 

How you use the data

Another key difference between first-party vs. third-party data is how you can use the data to launch sales-boosting ad campaigns. 

First-party data

With first-party data, you can: 

  • Learn about your audience’s interests
  • View your current customers’ demographics
  • Learn about your audience’s job role and company industry

With this information, you can launch highly-targeted ad campaigns that reach the people who are most likely to purchase your products or services, so you can drive more sales for your business. 

Second-party data

Once you obtain second-party data, you can use it in a similar way to first-party data. For example, you can learn more about your target audience, implement data-driven strategies to nurture your leads, and launch targeted ad campaigns. 

Third-party data

You can use third-party data to boost your online visibility and reach more members of your target audience that haven’t yet discovered your brand. 

For example, you can use third-party data to learn which websites and channels your audience interacts with. You can then launch ad campaigns that promote your products and services on these channels to expand your reach and generate more leads and sales for your business. 

What type of data should you use in advertising?

While you can use various types of data for advertising, it’s important to note that some companies, like Google, have announced they are retiring third-party cookies.

That said, it’s more important than ever to collect first-party data from your own website to ensure you always have a collection of data to inform your advertising campaigns. 

Collect and leverage first-party data with Nutshell

Third-party data is out, and first-party data is in. Future-proof your ad campaigns by collecting more first-party data for your company with Nutshell. 

With our powerful, user-friendly CRM, you can collect essential data from your audience, like their demographics, contact details, stage in your sales funnel, and much more. 

Plus, our team can help you leverage this data, so you can implement advertising campaigns that reach your target audience and encourage them to convert into customers or clients. 

Ready to start growing your business with our first-party data solution? Start your free trial today!

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