Third-Party Data: What You Need to Know

The times, they are a-changin. 

We’ve known a big shift has been coming for third-party data.  

There’s a push for more privacy for users. And that’s a good thing. 

But what does that mean for businesses who depend on that data to lead their marketing campaigns? 

Because you still need accurate data to perform critical functions like programmatic buying, personalizing outreach, and understanding your customer. Oh, and to drive sales, of course. 

And while third-party data isn’t going away, it’s definitely going to be harder to collect. 

So, let’s dive in to learn what’s changing and how you should navigate the new landscape.  

Third-Party Facts 

Here’s an important fact to know: Third-party cookies are going away. Third-party data is not. 

What’s a third-party cookie? It’s “a file that’s placed on your device by a website from a domain other than the one a user is visiting to collect personalization preferences and tracking information—with no restrictions on how it’s collected,” according to AdWeek. 

Consumers have been demanding stronger privacy and regulations around these cookies due to their lack of restrictions. 

What’s third-party data? It’s “data that didn’t originate with the buyer or seller, but with a third party.” It can be collected without using cookies, so it’s here to stay, despite it being one of the easiest methods of collecting and selling data. 

For example, a credit bureau collects an abundant amount of data on consumers.  With it comes the ability to package user data and sell it as third-party data, all of which came about without cookies.   

How to Navigate the Change 

Understanding your customers’ behaviors is arguably the most critical step in any advertising campaign. 

So, your business must be able to collect its own consumer data across the customer lifecycle, and then use that data to influence campaign decisions. 

With an insightful picture of your customers, you then have the knowledge you need to identify the right data segments that mirror your current customers. 

You can target prospective customers, scale campaigns, and reach new audiences. 

But it all starts with the right data so you can deliver ideal messaging to receptive audiences. 

Here’s what you need to do. 

1. Gather first-party data 

First-party data is moving into a critical role now that third-party data will become scarcer. 

First-party data is “the information you already have about your customers and prospects in your data platforms.”  

Think of the transactional data you collect and seek to build on it through qualitative means.  

For example, you have a user that created a profile or purchased from you, but it would be more insightful to better understand what category of products/services they’re most interested in or how they use your product/service.  

Simply solicit this information so you can provide them with more relevant offers or updates on new offers.   

Identify their lifestyle and use cases for your product or service so you can target other prospective users that might share a similar lifestyle.   

This information is gold. 

So, you need to treat it like it’s that valuable. 

You’ll need to analyze that data and then gain actionable insights from it to be able to identify new audiences. 

This will create a great starting point from which you can identify new data segments to test. 

2. Segment your data 

“Data is the new oil.” 

Have you heard that one? 

It’s exactly like oil in the sense that data is of no value until it’s refined. Only then can we use it for all sorts of applications. 

So, as you do a deep dive into your first-party data, make sure you create segments that are useful and compelling – and that support your current offerings or prospective offerings. 

Demographics don’t really tell you a lot about what happens during the purchasing journey.  

Sure, it’s important to know factors like age, income, gender and location, but correlation is not causation.   

You should aim to find stronger commonalities amongst your existing customers to clearly define your future customers, such as what does your audience believe, what are their attitudes, what are their desired outcomes? 

For marketing to work, you need to treat the audience like real people.  

And that means learning the answers to these questions, which will give you a deeper view of your customers. 

3. Build the persona 

You can create the clearest, richest picture of your audience possible by generating personas based on segmented groups of customers that share common human traits (not just demographics like age or gender) to empower your strategy for third-party data. 

Get your team together and consider questions like, Who am I targeting? What are the qualifiers? What are the problems? Can we offer the solution?  

Then, identify which ad you will show each segment based on lifestyle, purchasing habits, buying stage, and so on. 

Key Takeaway 

As concerns over privacy and third-party cookies came to light years ago, our team could see that Google was making small but consistent steps over the years toward monopolizing data. 

Now that it’s removing third-party cookies, it’s much more difficult for third-party ad platforms to use data.   

Ad platforms will soon have to rely more on their own data (if they have it) to provide advertisers with quality audience segments.  

But Google has the Chrome browser, Android devices and dozens of other data-mining platforms that feed into their advertising ecosystem, so even though third-party cookies will be a thing of the past. 

They have first-party data that then becomes second-party data to the advertiser.   

As an advertiser it’s always best to use data that is closest to the source to ensure relevancy and accuracy.    

Inevitably, Google, and other platforms like Facebook that collects its own huge amounts of data on a daily basis, are taking these steps to remove the competition and become the sole source for advertisers. 

At All Media Design Group, we understand the ad landscape.  

We made the decision years ago to migrate our digital tech stack over to Google-based products, as we realized the impact and competitive advantage that existed.  

We use the best technologies available so that our clients aren’t in a position to be affected by the changing landscape. 

If you have questions about how your company will be affected by this change, give us a call.