Effective marketing is all about personalization. To target current and potential customers, you first need to know what they’re looking for so you can effectively explain how your company will serve their needs.
Data is the best way to personalize your marketing efforts because it includes real information about your customers that you can transform into actionable insights and tailored campaigns.
We recommend using a variety of data types—including first, second, and third-party data—to capture different elements of your customers’ personas and needs. In this guide, we’ll focus on third-party data and how you can leverage this information to better target your audience.
What Is Third-Party Data?
Third-party data (also referred to as 3rd party data, 3p data, or 3pd) is information collected and packaged by external sources or data providers.
This data does not have a direct connection to the consumers it’s attached to. Instead, providers acquire this information from different sources and compile it to create datasets that businesses can leverage. Then, companies can append third-party data to round out their databases and reach new audiences.
How does third-party data differ from other types of data?
This type of data differs from first-party data, which comes directly from customer interactions. While companies source third-party data from external providers, first-party data may result from lead capture forms, website activity, or purchase activity.
Second-party data refers to another company’s first-party data. Since it comes from an external source, second-party data is similar to third-party data, except it includes information stemming from the customers themselves.
Third-party data is integral to marketing campaigns with about 53% of digital marketing campaigns using this type of data. It digs deeper into customer insights you may not be able to glean from your typical interactions with your audience, allowing you to enrich your database and personalize your campaigns even further.
What Are The Benefits of Third-Party Data?
When you leverage third-party data, your team receives the following benefits:
- Greater efficiency. Third-party data requires little time and effort to acquire. All you have to do is contact a data provider. Plus, 3rd party data companies often package data in a way that eliminates the need for additional organization and categorization, saving your team even more time.
- Enriched customer profiles. Third-party data allows you to learn valuable insights about your customers that you may not be able to obtain through traditional interactions with them. You can then use this data about their habits, behaviors, and demographics to personalize your audience targeting.
- Broadened reach. While third-party data helps you learn about your current customers, it can also enable you to identify lookalike audiences composed of consumers who resemble your customer base. You can then target these potential customers and expand your reach to additional people who may engage with your brand.
- Easier scalability. Data providers can grant your business access to extensive datasets, allowing you to quickly expand your customer base. This information can also help you tap into new markets and scale up as a result. For example, if you typically sell to adults but want to start targeting a younger audience, you can use a youth marketing dataset to jumpstart your efforts.
- Competitive edge. The more data you have, the more you’ll understand your customers and your industry at large. Third-party data provides businesses with a unique advantage because they can transform this information into actionable insights and hop on consumer trends before they’re apparent to other companies.
Third-party data unlocks a myriad of opportunities for your business. Whether you’re looking to enhance your understanding of your current customers, expand your audience, or dive into new markets, this information can empower your efforts, personalizing your campaigns and offering a better customer experience as a result.
How Do Companies Obtain Third-Party Data?
To acquire third-party data, companies must work with a data provider. Data providers compile data from a variety of sources, such as:
- Public records
- Court filings
- Postal data
- Real estate transactions
- Magazine subscriptions
- Transactional history
- Charitable donations
Then, companies can purchase this information as complete datasets and integrate it with their customer data platforms (CDPs) or demand-side platforms (DSPs) for enhanced audience targeting.
Data providers typically offer a wide array of data to satisfy a variety of business needs. This information may include:
- Contact information
- Marital status
- Home ownership and property data
- Presence of children in the home
- Net worth
- Lifestyle information
With 2.5 quintillion bytes of data generated each day, there is an overwhelming amount of information available. Brands can leverage this information to transform their marketing approaches and effectively reach target audiences. Data providers do the heavy lifting of sourcing, organizing, and packaging this information to make it digestible and actionable for companies.
How Can Companies Choose A Quality Third-Party Data Provider?
Like with any important business decision, it’s crucial to do your research when selecting a third-party data provider. Compare different companies’ offerings and pricing options to determine which will best align with your organization’s preferences, budget, and goals.
While different providers may cater to different niches and specialties, in general, you should look for a 3rd party data provider that:
- Contains a variety of datasets. The best data providers package data for many different purposes and businesses. Their expertise and resources allow them to help any brand with their data needs and propel them in front of their target audiences. Additionally, choosing a data provider with various types of data will ensure you can stick to one provider for multiple campaigns instead of continuously searching for new data sources.
- Adheres to data privacy laws. Data experts know that security is a top priority for building trust between brands and their customers. The right data provider will collect all data legally, follow applicable privacy and compliance guidelines, and note any data security certifications they hold.
- Creates a customized approach. Look for a data provider that is willing to take the time to discuss your data goals and how they can help you achieve them using third-party data. Working with a data provider should be a partnership in which your company explains its needs and preferences, and the provider develops a customized approach based on your input.
- Offers a range of data solutions. While sourcing and appending third-party data can improve your marketing efforts, there are many other ways providers can support your data goals. When you find a data provider that offers a range of data solutions—from data quality reports to identity resolution—you can work with them for the long term to completely transform your data-driven marketing approach.
When you find a data provider that fits your brand’s needs, bring your team together to make the final decision. Getting different perspectives on the provider’s approach and offerings will allow you to ensure you’re choosing the right provider for your company.
Working with a trusted data provider, like Deep Sync, enables your company to access a variety of unique third-party datasets, dig deep into consumer insights, and supercharge your marketing efforts. To get started with your custom third-party data approach, contact us today.