Why 2nd Party Data Offers Stand-Out ROI


With the slow death of 3rd party cookies, and the inevitable increase in advertising-driven acquisition costs (caused by the reduced ability to target effectively), many previously successful marketing strategies are in need of a rethink.

To address this, sales and marketing leaders are placing more emphasis on their own (1st party) data - but as many are finding, constantly fishing from the same pool yields diminishing returns. Without new customers and prospects, growth is elusive.

Read on as we learn what 2nd party data is, and how it can fill the gap left by underperforming ad campaigns. We’ll see how prudent investment in high-quality second-party data from trusted partners can deliver impressive returns, increase the reach of your marketing campaigns - and even grow your own database.

Welcome to the Party(s)

So what is 2nd party data? And how is it different from 3rd party data? For the purpose of this article, we’re discussing personal data - which is data that pertains to identifiable data subjects (people) and in many jurisdictions, particularly the UK and the EU, is subject to enhanced collection and handling regulations. Let’s start with some simple definitions;

Zero Party Data

Data collected overtly by your organisation - typically by means of registration forms or personal interactions with data subjects.

Examples include: Name, email address, postal address, job title, and more

NB: The Zero Party category is subjective - many practitioners consider it to be a subset of 1st party data.

1st Party Data

Data collected by your company directly, typically (but not always) with consent.

Examples include: Web analytics data, purchase history, conversation notes, service usage, preferences, email opens, and more.

2nd Party Data

Another organisation’s 1st or Zero party data - Typically shared under contract between you and another entity. This might arise by way of an alliance or partnership between companies, or by entering into an agreement with a specialist data provider 

3rd Party Data

Data typically collected by media and advertising companies, credit agencies, or aggregators who have no explicit relationship with the data subject.

Examples include: Purchase intent data, profile data, cross-site browsing data, search history, demographic information, and more

The Problem with 3rd Party Data

Before the advent of modern personal data legislation such as the EU’s GDPR, media, technology, and specialist data companies including (but not limited to) the likes of TransUnion, Experian, Facebook, Google, and many others would collect huge amounts of personal data and build detailed customer profiles, often without the customer’s knowledge. 

Whether you bought a house, applied for a credit card, browsed used cars online, purchased cigarettes using a loyalty card, engaged with a political social media group, these and many more data points would be aggregated and sold - to power marketing campaigns, market research, and more.

This lack of transparency led to the gradual stigmatisation of 3rd party data and wide-ranging personal data reform in many jurisdictions. That said, 3rd party data does still exist in the post-GDPR environment, and used responsibly, can form part of many marketing strategies.

Compliance: Avoid a False Sense of Security

Organisations using partner data must be realistic about compliance, however reputable they perceive their partner(s) to be. Whether you’re using 1st, 2nd, or 3rd party data, it should come as no surprise that the laws around processing data (UK GDPR), privacy and marketing communications (PECR), and more all apply. 

Even when you’re working with specialist data partners, it is not possible to outsource your responsibilities. Organisations must do what it takes to ensure that data has been collected legitimately and is used legally - failure to do so can quickly lead to significant brand damage, not to mention legal consequences.

The Opportunity of 2nd Party Data

As audiences are increasingly confined to walled gardens, marketers have fewer options when it comes to advertising and direct marketing. For advertising, the effects are two-fold; prices are rising, and conversion rates are falling, due to a reduced ability to target (after the depreciation of 3rd party cookies). For direct marketing, there’s simply less data available - and where it does exist, a lack of provenance is prohibitive for marketers with modern compliance requirements.

An effective way to address this is to identify organisations who have high-value data which is relevant to your needs - and partner with them. This kind of collaboration, where one organisation makes use of another’s 1st party data is termed 2nd party data.

Most importantly, because the relationship only involves known parties, appropriate agreements can ensure that data is acquired and maintained in a responsible way, and set usage limits to protect data subjects.

Some common examples of 2nd party data partnerships include;

  • Intercompany Relationships
    Commonly found where a holding company owns multiple related organisations, or in scenarios where non-competitive organisations such as niche retailers can form alliances to communicate with each other's audiences.

  • Specialist Business Data Providers
    Especially for B2B data, specialist data providers constantly research and develop their own first party data specifically for use by relevant clients. Compliant lists, compiled with appropriate consents offer a valuable means to contact otherwise hard-to-reach individuals. Importantly, data providers are used to facilitating compliant use of data, and offering transparency around collection methods.

  • Media Owners
    From news and entertainment companies to record labels, app owners and many more, there's a whole world of media owners with subscriber databases of varying size and quality. Media owners often have valuable inferred interest data derived from their content - think car magazines, or business journals - but it’s important to balance this against the reality that media owners come in many shapes and sizes, with varying degrees of expertise in data handling, and are not typically collecting data with partner use in mind.

Reach New Audiences

Undoubtedly, the most valuable opportunity of 2nd party data partnerships is the ability to reach new audiences by leveraging new data sets.

Unlike lower quality 3rd party datasets, 2nd party data is typically highly curated, and available with datapoints to aid reliable segmentation and targeting. By tapping into partners’ data, marketers can ensure that they’re messaging people who are relevant, with highly personalised and relevant content, leading to high engagement and conversion rates.

Do More With What You’ve Got - Augment Existing Data

A lesser-utilised tool enabled by 2nd party data partnerships is data-augmentation - improving the data you have. Where there is overlap between datasets, partner data can help you uncover new data points to support relevance and identify segments in your existing data.

Examples of this include everything from demographics to interests, shopping habits, and more. In B2B, this might include job titles, budgets, or areas of responsibility.

Stand-out ROI

So in an era where 3rd party data presents increasing compliance risks, and advertising is less effective (not to mention more expensive), 2nd party data offers best-in-class reach and value. 

Ask yourself a simple question - is there any form of advertising which will acquire a marketable contact for less than £1? Typical costs for 2nd party data partnerships do so every day.

No other product enables relevant multi-channel campaigns at this pricepoint, so 2nd party data really does offer stand-out return on investment.

To learn more about 2nd party data, and find out how you can partner with Corpdata to access our premium B2B data, get in touch today. Call 01626 777 400 or visit corpdata.co.uk now.

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