Your own data is what you collect directly from your audience, through your own channels. Third-party data is collected by another entity that is completely independent of your relationship with your audience. So these terms refer to where the data comes from and how it ends up in the hands of a marketer. Let's compare first-party data with the latest type of information: third-party data.
While source data is information that you collect free of charge through your own sources, data from third parties is purchased from other companies. There are many data providers in the market that sell customer information online on global data platforms. Source data, which is often the most valuable to an organization, is the data that companies have about their customers. It typically contains personally identifiable information (PII) and all information collected about customers through their interactions with the company.
As technology continues to evolve, companies are collecting, ingesting and leveraging source data faster than ever before. This data provides substantial information that marketers can use to evolve the way they interact with their customers and ultimately improve the customer experience. Third-party data has been the next most thought about in the context of customer data. Usually, this data contains aggregated information about a larger group, of which customers are a subset.
Usually, an aggregator pays other organizations for their source data. Sources may include websites, social media, surveys, government censuses, and subscriptions. It contains information about the markets in which the company operates, as well as those in which it does not operate. It can be useful for prospecting, people, understanding sentiment, identifying potential geographical regions for growth and much more.
However, if an organization has access to this information, so do all its competitors. Third-party data provides less accurate information that is more generalized and directional in nature. In these scenarios, partnerships aim to benefit both organizations, and both organizations have the ability to leverage third-party data (with the right permissions, of course) to expand what they know about their own customers and others like them. The association itself determines what source data will be shared with the partner and, precisely, how it is captured and shared.
Zero-part data is a subset of what is traditionally considered first-party. Customers have full control over zero-party data. Organizations are increasingly recognizing the difference between customer and lead data that they are blessed to act on (part zero) and more traditional source data, such as transaction history. Customers (or prospects) provide zero-party data to an organization to tell you what they want them to know about themselves, and they can change it as their preferences and relationship with the organization evolve.
While organizations have traditional source data, customers have zero-part data. As a result, companies cannot transfer it or share it with others. Marketers must have good control of the source of the data used, the availability of data from other parties and treat existing customer data even more carefully. But how do you find those companies? One of the easiest ways to find a buyer or seller is through a third-party data marketplace, such as the Lotame Private Data Exchange (PDX), which connects both parties to allow third-party data transactions.
Loyalty programs are an example of successful relationships between parties that can leverage third-party data. .