Why second-party data is witnessing renewed interest from marketers Share via

Data plays a critical role in the success of any new-age business in the digital landscape. Although first-party data has always been at the forefront, considering it is the most accurate data any organization can have, second-party data has also proven to be of utmost importance for the brands’ marketing efforts. Since second-party data is the other organization’s first-party data, it is seen as highly accurate and transparent and can steer marketers in the right direction while targeting potential customers and expanding business.

Companies usually acquire second-party data by getting into a partnership with another non-competitive business whose customer base complements each other. They are also available in the open market, and many organizations see them as a source of additional revenue.

And with third-party cookie tracking coming to an end, marketers are aggressively finding ways to collect data that complies with the privacy and security guidelines and effectively reach out to a new audience. According to various research, many brand marketers have suggested that strengthening their second-party data will be the top priority before the ban on third-party cookies comes into effect. This blog will discuss why second-party data has emerged strongly in recent times and why brands take it very seriously to unlock new business opportunities.

High-Quality Data

The most significant advantage of working with second-party data for marketers is the high level of transparency and authenticity associated with it.  This is because the data has been collected by the businesses you trust, and the data acquired is your partner’s first-party data. As a marketer, you know precisely the kind of customer data you have access to, giving you a much better chance to reach out to newer audiences and increase conversions. In addition, unlike the third-party data, which are often unreliable and the source of the data is unknown, second-party data gives the brands more control to design their future campaigns. Since businesses usually source data from companies that complement their customer group, the accuracy of this data set provides brand marketers with higher confidence.

Targeting New Audiences

The biggest limitation brands face with the first-party data is its limited scale and scope. However, if businesses want to expand into different markets or acquire a newer set of customers, second-party data can prove to be of significant help. For instance, the company which is primarily into travel and wants to reach a wider audience can collaborate with the hotels or accommodation providers in a popular tourist destination to beef up their first-party data and target new customers.

Anticipate Consumer Behavior

With the help of second-party data, companies can better predict the behavior of their consumers. Therefore, the better the anticipation, the more effective the targeting through the marketing campaigns. For example, a company that is into movers and packers business collaborates with local real estate firms, can access data of customers looking for houses in the area, and will soon decide to move. Based on this information, the former can easily design their marketing campaigns to target those potential consumers assuming they will require the services shortly and looking for a moving company. This ability to anticipate consumer behavior makes second-party data a hot favorite among brand marketers.

Price Flexibility

Compared with third-party data, where there is not much room for negotiation, and the buyer has to shell out the amount the aggregator demands, there is a lot of price flexibility when dealing with second-party data. In addition, since there is a one-to-one interaction between the buyer and seller here, both parties can negotiate the prices and settle at a favorable deal. Apart from price flexibility, buyers and sellers can also decide or customize the kind of data required and its frequency, providing more control to the brands.

Although we have talked about the various benefits second-party data provides to shape a brand’s marketing strategies, marketers need to be careful while selecting their partners, carefully review the policies, and ensure their data is compliant at all times to avoid getting stuck in legal complications.