Data is very important for marketers to identify and target their potential customers. We can classify the data into four types – zero party data, first party data, second party data and third party data based on how the company collects the data. Here, we explain the difference between each type of data with examples and its purposes.
What Is First Party Data?
First Party Data is the data that companies collect from their own resources like own Websites, Applications or Social Media Pages and Offline Sources. Big marketers are interested to collect first party data because it is more valuable than third party data.
For example, if you own a shopping website then you are able to collect the user registration details, purchase history details, user interest details, user’s location details etc from the website. You collect all this information related to your customers from your own website. So, these pieces of information are referred as “First Party Data”. The first party data is very effective and genuine because it is collected from your own resource.
Examples For First Party Data
Registration Information (Name, Email, Phone Number)
Behavioural Data
Demographic Information
Sales Data
Interactions Data
Product Interest Data
Advantages Of First Party Data
High Quality : No other parties are involved in collecting this information. So, it is considered as High Quality Data.
Free Of Cost : You can get this information from your own resources. So, you no need to spend any additional amount.
User Privacy Protected : This information is collected from its own resources. So, user’s privacy is protected here.
Enhances Personalization : Most websites/applications collect certain information to provide personalized access to their users. For example, YouTube tracks what kind of videos you watch frequently and show suggestions for video related to your interest.
What Is Second Party Data?
Information collected from your trusted partner and shared with your company is called as Second Party Data. Second Party data is another company’s first party data. You know very well about this partner company and they share their first party data with you for money or any other benefit. So, this information is accurate and helpful to expand your audience size.
For example, One company owns a hotel in Delhi, Mumbai and Chennai. So, they need passenger contact details to show their advertisements. So,they collected passengers mobile number and email id who booked the flight to these cities from a Ticket Booking agency. Now, passengers phone number and email id is called as Second Party Data for the hotel company.
Advantages Of Second Party Data
Expand Audience Pool: For some businesses, the first party data alone is not enough. So, data shared from the trusted partner is helpful to expand their business or increase the sale.
Can Target New Potential Customers: Many companies need another company’s customer data to increase sales. For example, after you purchase a new car from one car showroom, you will receive a call from another car service company, another car seat cover company. These companies bought your details from the car showrooms and call us to increase their business.
What Is Third Party Data?
Third Party Data is the data collected by the outside sources and they do not have any direct relationship with the customers (they are not the original collectors of that data). Those outside data providers collect the data from various websites, platforms, and applications. If any advertiser needs to show their advertisements to any particular group of audiences then they can purchase the data through the demand side platform.
Normally, demand side platforms are linked with many different data providers to help the advertisers. So, advertisers are able to create segments for the needed category and target it to the campaigns and show their advertisements.
Advantages Of Third Party Data
Enhance Your First Party Data: Collecting first party data is very important for every business. At the initial stage, companies do not have audience details to target. So, they need to run prospecting campaigns, open to all users. But, this is not a good practice. In this situation, third party data is the best solution to start their initial campaigns. For example, Trip Planner company can use “Interest In Tourism” and “Frequent Travellers” category third party data to start their initial campaigns.
Expand Your Audiences: Companies can use third party audience data to expand their audiences. Third Party Data is collected from a variety of sources so it might be helpful to discover new audiences.
What Is Zero Party Data?
First Party Data is the data, companies collect from its own resources. But, Zero Party Data means the data users intentionally shared with companies. Users intentionally shared their interest, personal information — name, email id, phone number with companies to enjoy some benefits provided by the company. For example, Provide email id to download the free course document, newsletter signups, customer surveys, etc.
Many of them confused with First Party Data and Zero Party Data. This simple example clarifies both, One fashion design company collect its users interest based on their browsing behaviour is called as First Party Data. If the user share their interest by filling the survey form is called as Zero Party Data.
Advantages Of Zero Party Data
Accurate Data: Identifying user interest is the ultimate goal for tracking user data. Marketers guess the user’s interest by the tracking data. In the zero party data, users themselves share their interests. So, it’s very accurate than any other type of tracking.
Privacy Protected: In the Zero Party Data, customers willingly share their information. All other types of data, users data are collected in the background. So, their privacy is protected in this data method.
