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.
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:
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.
Comparing the collection, purpose, and use of first-party vs. third-party data
Curious about the differences between first-party vs. third-party data and 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:
Collecting 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.
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 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 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.
The purpose of the data
Another key difference between first-party and third-party data is their purpose.
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.
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.
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.
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.
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.
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?
When comparing first-party vs. third-party data and deciding which you should use in your marketing strategies, there are several factors to consider, including:
Respecting privacy: Although third-party data is highly sought-after by businesses across industries, not all people like what’s done with their information. In an effort to keep consumer information more secure, several corporations are phasing out some methods of third-party data collection. In fact, some companies, like Google, have announced they are retiring third-party cookies — meaning this advertising method won’t be available for marketers to use in the future.
Level of insight into individuals: Another important consideration is how much insight your company wants into the behavior of individuals visiting your website. If you really need to A/B test a new product page or determine whether a specific email campaign is successful at generating webinar signups, you need to be able to track that data yourself.
Reliability and quality of data: Using other sources to collect data about potential customers means you’re at the mercy of their data collection methods. 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
For many uses in advertising, 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.