The way data and analytics are used by organizations is changing. Businesses are starting to value both the quality of data and its origin, rather than just its volume. Marketers are keenly aware of this change and how it can affect their products. 

Data is becoming a very valuable asset, and this is reflected in the growing number of discussions around data marketing. One such discussion is the difference between different sources of data.

Smart companies are now beginning to recognize there are many types of data available, each with its unique characteristics – including origin, ownership, and attribution. How each is used depends upon the type of business concerned, and what its goals are.

• Zero Party Data

Zero-party data necessarily means data that is not owned by anyone, the source is not disclosed and the information has not been verified. A zero-party consumer on a social networking platform may post content in the comment form and post a link to an external website. The consumer will not have any ownership of the content or website and each party can figure out to share the information without prior consent. Any website can choose to insert advertisements into this content without disclosing its brand name.

• First Party Data

First-party data is owned by the entity that collects and uses this data. This data can be stored and used for analytics purposes. First-party data is not shared with other parties. The advantage of using first-party data is that companies own consumer identification information, they can conduct market analysis and develop their product or service to meet consumer needs better than any third party can.

• Second Party Data

Second-party data is shared by a company with a third party and then uses for its own marketing purposes. This information is provided in an aggregated form that doesn’t identify anyone. A customer might buy an airline ticket from a travel agent, who will then share this information with the airline itself. The airline can then send out targeted messages to the customer about its products and services, or it might choose to do so through an affiliate website or travel comparison websites such as Kayak or Skyscanner.

All of these companies are using the customer’s information, but they’re not doing so without permission.

• Third-Party Data

Third-party data is used by companies that have obtained it from another source and are now selling it to a third party for marketing purposes. This information can be purchased from data brokers such as Experian, Oracle, and LexisNexis. Third parties can analyze the information and use it to market their own products or services. These companies do not ask permission from customers; however, they must still adhere to and comply with the Data Protection Act of 1998. This requires them to make sure the information is accurate and to keep it up to date.

Some of the data sold through these channels tend to be rather broad, such as user interests and activities. A third party can purchase this data and use it to market their own product or service through affiliates. However, marketing a product that is not relevant may not have much effect on conversion rates.

• Effective Use for Marketing

Each type of data has unique characteristics, strengths and weaknesses. It’s important to determine the type of data that will be most effective in marketing a product or service, and which will meet specific business goals.

The type of data that is most effective at drawing a customer in to learn more about a product or service is first-party data. This is information that can be used to create better-targeted digital ads and email marketing campaigns.

The type of data that is most effective at prompting a customer to make a purchase decision is second-party data. This is data from third parties which have obtained it from other sources. For example, a company might use second-party data to determine what types of products are most frequently viewed on a certain website. They can then analyze this information and develop new products or services in response to this analysis.

• How it is Better than Traditional Marketing

Data is better than traditional offline marketing because it can be precisely tailored to a customer’s interests and values. This helps to make sure that the message is delivered in a way its recipient will be receptive to. What’s more, it doesn’t require any additional manpower to handle, which means it can be customized on a per-customer basis at little extra cost.

This can be particularly helpful for small or new businesses that don’t have the resources to produce custom marketing messages. Using data allows them to tap into a wealth of marketing information and use it to their advantage in developing products and services that will market themselves more effectively.

This type of marketing can also help with customer retention rates by allowing customers to engage with a product without necessarily having to interact with a salesperson.

• Conclusion

The days of traditional marketing are rapidly coming to an end, but the future is bright for data-aware businesses who know how to use it well. Data marketing offers great opportunities for marketers and businesses big and small, so it’s important that they’re not intimidated.

• Ready to take your business to the next level? Work with the experts at Echofish to help pair your business with the right growth plan to help you gain leads, increase brand exposure, and boost your credibility. Contact us or book a call today for general inquiries, support, and resources, and take your business to the next level.