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Digital Advertising 101: First-Party Data Targeting and Beyond

Written by: Juliana Casale, Director of Marketing

The rise of direct response digital advertising has put a lot of focus on data-driven marketing tools and tactics. What separates a good performance marketer from a great one is not just the ability to match compelling images and copy to the right audience, but the ability to target the right audience in the first place. With ROI on the line, knowing how to reach the customers that will appreciate ads most is key to boosting conversion rates on social and mobile. Here are the three categories of data at a digital marketer’s disposal, and how each can be used in social media campaigns:

First-party data: Straight from the source

TargetingIn a game of “Telephone,” first-party data would be the person starting the round with a perfectly intelligible sentence. Whether it’s information collected from social media, apps, subscriptions or a CRM, first-party data comes straight from the source (you).

Example: A game developer launches a mobile app ad campaign, using first-party data to retarget people who have made an in-app purchase in the past seven days.

First-party data is excellent for digital marketing because it’s trustworthy, actionable, and best of all, free. Brands looking to retarget customers who have visited their website, signed up for an email, referred a friend, or added items to an online shopping cart often use information they’ve collected themselves for retargeting purposes. We’ve found that easy access and control of proprietary data is one of the primary reasons our customers are interested in advertising in-house.

Second-party data: Someone else’s first-party data

Second-party data partnershipAs illustrated above, first-party data is extremely useful for retargeting purposes. As a bonus, it can also be used as a bargaining chip in this next category. If a brand trades for or purchases another company’s first-party data, that data is considered second-party data (ie, it’s not customer information gathered firsthand but it is from an ostensibly reliable source).

Example: Two ecommerce companies trade first-party data in order to target each others’ customer base on social media. Because one sells shoes and the other markets dresses, sharing information is not damaging to either brand.

Leveraging second-party data is perfect for user acquisition marketers looking to expand their customer base to new audiences with known purchasing behavior, demographic traits, or interests. And in the case of a data swap amongst peers, this marketing method costs nothing.

Third-party data: Large amounts of data from multiple sources

Aggregate dataThird-party data is aggregate information (on past purchases, intent, interests, or other customer attributes) that has been gathered from publishers by an independent company like DataLogix, BlueKai or Experian. Marketers can purchase or license this data to inform targeting segmentation and reach a large number of new prospects.

Example: A financial services company buys a list from BlueKai of customers that have indicated intent to buy through keyword search on top tier financial websites.

Third-party data has drawbacks. It can be pricy to acquire, and less reliable than first- and second-party information, as some data aggregating companies base their intel on data modeling rather than actual demographic behavior. It’s also important to note that third-party data sets are available to any buyer, so there’s no competitive advantage to using this method. However, for brands looking to maximize ad campaign reach and add additional layers to more general targeting tactics, it can be valuable.

Improper targeting is a leading cause of failed digital advertising campaigns. Use of first-party, second-party, and/or third-party data ensures that direct response marketers are reaching the people most likely to convert.

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