What is 3rd Party Data and How Do You Use it?

By Bryan Gaynor | @BryanGaynor12 | Digital Marketing Account Manager at Hanapin Marketing |

Data, Data, Data… We hear it every day. We work with it constantly. It is the core of online advertising. 1st, and 3rd party data sets are both used to varying degrees to help customize unique advertising strategies that deliver highly targeted ads to people with the right message at the right stage of the funnel.

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We are all relatively familiar what 1st party entails. First data encompasses things like existing customer email addresses, their buying profile and at the simplest level, tracking their onsite behavior. These data points allow advertisers to target existing customers with up or cross sells, or provide highly customized offers to potential customers who did not convert the first time around.

What is 3rd party data?

3rd party data is the collection and aggregation of user behavior and demographic information that is collected by data processors and entities that do not have direct relationships with consumers. These include Oracle Blue Kai, Exelate, Visual DNA, etc. These companies provide publishers and websites with audiences insights or monetary compensation to all them to collect behavioral and demographic information about the site’s visitors and use it to create audience profiles of those users and they navigate web wide. The 3rd party vendors then resell this packaged data to advertisers for targeting within their ad buys.

How do I use 3rd Party Data?

3rd Party Data is usually leveraged in programmatic platforms such as Doubleclick, Mediamath, Trade Desk etc.

Typically, we see/use 3rd party audiences as a way to prospect and extend our reach to target personas that are are right fit for our clients. Where you may see the best success in using 3rd party audiences are the industries that have a larger price tag, or a longer sales cycle, for example, SaaS, Travel, or Car Sales. The reason being, these are very specific audience groups, there are numerous options for the consumer to choose from, potentially multiple decision makers, and ultimately a greater financial risk.

Let’s take Car Sales for example. Typically people have an idea of what level of car they can afford to buy. This immediately helps us determine how we bucket our ads and customize our strategy to the ideal audience. Ultimately, you more than likely do not want show ads for a brand new Tesla to a customer who earns $30,000 per year in the market for a used cars. Using 3rd party, you can filter down the audiences to those who are actively searching for Luxury Cars. This audience is typically better qualified and more likely to be attracted to your offer. Furthermore, this can be taken a step deeper, by segmenting the inventory of luxury vehicles into their model types and showing specific ads with imagery associated with the audience being targeted.

What is better? 1st or 3rd Party Data?

1st party data will always deliver stronger “results” in reporting. Consumers are lower in the funnel, and deeper in the consideration phase. However, without a strong top of funnel strategy, these results will soon begin to dwindle, audiences will shrink and costs will go up.

While 3rd party audiences are great for driving perceived higher quality traffic, it is still prospecting it should be intertwined with remarketing, RLSA, Search, etc. It will likely not deliver leads directly, but will deliver an audience that will likely move through the funnel at a faster pace and convert more easily.

Wrapping Up

Have you tried 3rd party audiences? What has your experience? Let us know @ppchero or @bryangaynor12.