First-Party Data vs. Third-Party Data: What’s the Difference?
Chapter 1 in our Data-Driven Marketing Guide
Welcome to the party, data guru.
In Chapter 1 of our Data Driven Marketing Guide, we’ll cover the following topics:
- What is the difference between first-party data and third-party data?
- What is first-party data?
- What is third-party data?
- What is second-party data?
- Learn more about 1st party vs. 3rd party data
- Learn more about 1st party data
- Learn more about 3rd party data
- Learn more about data-driven marketing with WebFX
What is the difference between first-party data and third-party data?
The difference between first-party data and third-party data is the collection and collector. First-party data is collected from your audience by your organization. Third-party data is collected from multiple audiences — including those unrelated to your audience — by a separate organization.
What is first-party data?
First-party data or 1st party data is data you collect directly from your audience. Types of first-party data include name, address, interests, and more. You can collect first-party data from website visitors, email subscribers, and paying customers via forms, surveys, website analytics platforms, and more.
What is third-party data?
Third-party data or 3rd party data is data collected by an entity other than your own, like a research firm, government branch, or data broker. Types of third-party data collected by these organizations include demographic, firmographic, and online browsing information.
What is second-party data?
Second-party data is first-party data shared with partners or collaborators. Types of second-party data include name, address, website or app usage, and more. Examples of second-party data include sweepstakes or giveaways, where a user may win prizes from multiple companies.
Learn more about first-party vs. third-party data
First-party data vs. third-party data have several major differences, including:
A key difference between first-party data vs. third-party data is their purpose. First-party data focuses on collecting data from your audience’s behavior on your website only. You can collect information such as:
- The type of device they are using, such as mobile phones and tablets
- Which pages they visit
- Their demographics
- How much time they spend on your website
- And much more
On the other hand, third-party data collects data on your visitors’ overall online behavior that doesn’t occur on your website. That means third-party data enables you to better understand your ideal customers’ interests and purchasing history.
While both third-party and first-party data can be collected from consumers using similar methods, the largest different in how they are collected is how they identify and validate a single user. This usually comes down to how the data, or cookie, is stored.
For example, first-party data is stored on your domain. With third-party data, the information is stored on another company’s or entity’s domain. Your business can collect first-party data from your website users and store it in your customer relationship management (CRM) software or customer data platform (CDP).
Third-party data is collected by independent researchers and other businesses and entities that aren’t affiliated with your website. They will then store this information on their domain which you can then opt to purchase for your own use.
Another difference between first-party vs. third-party data is how you can use the information to inform your marketing strategies. With first-party data, you can:
- Create a retargeting campaign that targets shopping cart abandoners and returning site visitors
- Nurture your leads
- Learn more about your ideal customer
- Improve areas of your website
- Create more engaging content
- And more!
With third-party data, you can expand your reach to promote your brand, products, and services to more members of your target audience that haven’t discovered your website or brand.
Third-party data allows you to create marketing messages that target more consumers based on the interests they’ve shown on other websites and purchases they’ve made. You can then use this data to create ads that reach these high-quality users on multiple online channels, such as social media.
When used together, first-party and third-party data can complement each other to help you reach more consumers online, drive more traffic to your website, and earn more revenue for your business.
Learn more about first-party data
Keep reading to learn more about first-party data:
Why collect first-party data?
Collect first-party data, and you can:
- Build targeted marketing campaigns, including remarketing campaigns
- Direct marketing dollars to your most valuable audience members vs. all audience members
- Generate more qualified leads or higher average purchase values
Essentially, first-party data (vs. third-party data) allows you to build smarter, more profitable marketing campaigns.
How can you use first-party data?
You can use first-party data to learn:
- How users progress through your buying funnel
- What topics (via your site, social media, or email) engage your most valuable users the most
- How often users visit your website before converting
- How much time users spend on your pages
- And much more
By collecting first-party data, you can learn more about your audience and use that data to optimize and improve your marketing strategies.
Where can you collect first-party data?
You can collect first-party data from a few places, including:
- Your website
- Your email campaigns
- Your customer relationship management (CRM) software
- Your social media
If you use a customer data platform (CDP), you can store, organize, and analyze this data.
What tools can collect first-party data?
Tools for collecting first-party data include:
- Your website analytics platform, like Google Analytics, MarketingCloudFX, or Adobe Analytics
- Your email management software, like MyEmailMarketingFX, Mailchimp, or Litmus
- Your CRM software, like Nutshell, Salesforce, or Zoho
If you want to increase your return on investment (ROI) from 1st party data, you’ll want to build a martech stack. A martech stack will likely include the above tool types and a CDP to store, organize, and analyze your first-party data.
Learn more about third-party data
Keep reading to learn more about third-party data:
Why collect third-party data?
Collecting — or purchasing — third-party data is useful for a few reasons:
- Enhance first-party data, like by learning an anonymous website visitor’s email
- Expand first-party audiences with similar audiences to reach more users
- Create viral content, like an infographic, for strategies like search engine optimization (SEO)
If you’re looking to purchase third-party data, keep in mind that companies like Apple and Google are (or have) retired their third-party cookies, which supply valuable data for strategies like pay-per-click (PPC) advertising.
While you can still use third-party data, first-party data can help you future-proof your digital strategy.
How can you use third-party data?
With third-party data, you can gain an overall understanding of your target audience’s general online behaviors.
For example, you can view:
- Demographic data, like age, location, social media handles
- Firmographic data, like employer, employer name, employer revenue
- User interests, like hiking, traveling, knitting
- Life moments, like planning a wedding, having a baby, or buying a home
- And more
As a result, third-party data can help you gain more information about your audience beyond your website, enabling you to learn more about their interests and online behaviors.
Where can you collect third-party data?
You can collect or purchase third-party data from:
- Research firms
- Government branches
- Data brokers
In some cases, third-party data is available for free. For example, the U.S. Bureau of Labor Statistics is a supplier of third-party data, which is an excellent example of data you can use for other digital marketing initiatives, like SEO. You can can merge first- and third-party data to enhance your overall data strategy.
Learn more about data-driven marketing with WebFX
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