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Third-Party Data: The Stars of the Digital Universe

Posted On  February 16, 2020

The sheer volume of data that continues to emerge on a day-to-day basis is – to put it mildly – jaw-dropping. In fact, reports that as of 2018, more than 90% of all data recorded in human history was produced in the previous two years alone. As you navigate this expanding universe of digital possibilities, you need to find efficient and innovative ways to make sense of all the chaos so you can make smarter decisions for your brand. That’s where third-party data comes into play.

It wasn’t too long ago that audience insights were limited to basic demographics (such as age, sex, gender, household income, etc.) because that was all that researchers could observe. And while this data informed brands directionally on how they should build and execute marketing strategies, it fell far short of painting a high-definition picture of target audiences.

Nowadays, we can observe consumer behaviors based off their digital signals. From GPS locations, to online behaviors, to media consumption and offline purchases, virtually everything we do is digitized in some fashion. Aggregators come along to gather, organize, and package all of these digital signals along with survey, sales, and demographic data to produce what’s known as third-party data.

Connecting the Dots of Third-Party Data

It helps to think of third-party data as the stars in the digital universe that you connect to form a constellation of your target audience. From a wide perspective, all of these stars may appear disorganized and chaotic. But with enough focus, you can identify patterns that start to take form.

For example, if you’re a pet food company pursuing a direct-to-consumer strategy, you need to identify where those prospects are likely to be consuming media. After identifying those customers through your surveys, you can append media consumption behaviors (such as their preferred TV networks) and social media preferences (Instagram vs. Facebook vs. Twitter) to determine the right channels to place your message. Sometimes you may find that these pet food buyers are likely to visit logical channels (like Animal Planet or ASPCA’s Facebook page). But the real ah-ha moments come when you see your prospects are likely to frequent unrelated outlets like MLB Network or LinkedIn.

Third-Party Data Applications

The pet food example is just one way companies can use third-party data to their benefit. Smart businesses have found powerful uses for third-party data in everything from recruiting, to finance, to sales. But, in general, there are two business areas where third-party data is most useful:

  1. Research and Insights –The ability to integrate data points on media, financial, brand affinity, and other behavioral tendencies allows researchers to paint a more holistic view of consumers and their personas. We can then develop richer profiles to inform brand collaborations, media placement, and creative development. With such rich data on hand, we can focus our pursuit of direct consumer feedback on client business questions, rather than requiring long and complex surveys. To put it more succinctly, third-party data helps researchers answer the question: “What else?”
  2. Marketing – If third-party data answers “what else?” for researchers, then it answers “who else?” for marketers by bridging the gap between insights and action. When marketers have very specific data points that paint a vivid picture of their customers, they can target discrete audiences across major digital ad exchanges that facilitate media placement. By targeting media buys at the most receptive audiences, marketers are able to improve conversion, grow customer acquisition, and maximize ROI on their media spends.

The Future of Third-Party Data

As new digital touchpoints and channels emerge, users will generate more data. And while more data can lead to more opportunities, it also provides new challenges. Government bodies have become more attuned to potential privacy issues in the digital space, which has led to sweeping regulations such as GDPR and CCPA. These regulations give consumers more control over personal and behavioral data that can be bought and sold by third-party aggregators.

But while it remains to be seen exactly how privacy policy changes will impact the data industry, it’s a certainty that brands will continue to lean on external datasets as they reach for the stars of consumer understanding.


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