What is third-party data?
Third-party data is information collected by companies and organizations other than the company that’s planning to use the data.
Third-party data can be, social media data, such as posts and interactions on platforms like Facebook and Twitter, which can be analyzed for insights into consumer behavior and sentiment. Or location data, such as information collected by mobile apps and devices about a user’s location and movements, which can be used for targeted advertising and personalized recommendations.
There are a wide variety of third-party data providers that collect data through surveys, online tracking, and public records. Then, this data is sold or shared with other companies and organizations. Finally, the data is used for market research, advertising, and more.
What’s the difference between first-party and third-party data?
The source of data is the key difference between first-party and third-party data.
First-party data is all the data you collect on your own channels and platforms. That means you have direct control over how your data is collected and used.
With third-party data, on the other hand, you get the data after it’s been collected by another company, which means you don’t get a say in how it’s collected.
Why is third-party data important?
Third-party data helps companies and organizations gain insights about their target audience and market. Without data, it’s impossible to understand consumer behavior or create a proper marketing strategy.
However, many companies don’t have the resources and/or expertise to collect first-party data on their own. That’s why they turn to third-party data providers.
It’s worth noting that there are certain things to keep in mind about third-party data. Sometimes the data being sold on data marketplaces was collected without the consent of the individuals involved. It’s important for organizations to use the data they buy responsibly and ethically. Also, there’s always a chance that the data isn’t reliable or current.
What is third-party data used for?
Third-party data is essential for organizations to make the best possible business decisions. Here are some specific examples of how third-party data gets used in ecommerce.
1. Market research
Organizations use third-party data to better understand their customers and market. There are lots of important insights in customer data, like a target audience’s demographics, preferences, and behaviors.
You need to know who you’re selling to in order to develop successful products, services, and marketing strategies.
Marketers use third-party data to target their ads to specific audiences.
For example, a company can use third-party data to find leads who might be interested in their products. This kind of marketing personalization ensures that your ads get seen by the right people. This will increase conversion rates and your ROI.
3. Website Personalization
It’s increasingly common for ecommerce websites to use third-party data to personalize each customer’s online experience.
For example, you can use third-party data to deliver personalized recommendations to individual users. Basing your recommendations on real data will make them more engaging.