Don't Sleep on Third- Party Data

An assumption prevails over the world of data-driven marketing. It goes something like this: “First-party and second-party data are more actionable, and of much higher quality than third-party data.”

That assumption is wrong.

Data quality is not determined by its relative point of origin, being first, second, or third party. Quality comes from a range of factors. How the data was sourced. How the data has been cleaned for errors. The frequency with which the data is refreshed relative to its lifespan. The stability of the data over time. How the data points are aggregated together.

Each impacts the quality of data in its own way. None of these factors has much to do with whether it’s first-, second- or third-party data.

Nevertheless, the assumption persists. Let’s pick it apart point for point.

First-Party Data Is The Most Powerful

Not exactly. Data’s power depends on its fitness for your marketing objectives. If a marketer is trying to find new customers, then targeting their existing CRM file isn’t going to help them much.



However, if a marketer is running a loyalty campaign, then first-party data about existing customers is very important. It’s still not perfect. In this situation, using other data sources to fill in the gaps about the consumer will improve performance.

Second-Party Data Is More Valuable Than Third-Party Data

To suggest that second-party data is better than others is misleading. While there are benefits to using second-party data, there are also some challenges. In using second-party data, a marketer is inheriting someone else’s data quality issues and has the added challenge of trying to integrate multiple data sources together. This is not easy.

Misconception #3: All My Competitors Have Access To Third-Party Data

Most third-party data is not available for anyone to purchase in its raw form - e.g., financial information. The “syndicated” data normally takes the form of generic segments, a method some companies use to productize the third-party data. But this is not the only way to use third-party data.

Third party can be immensely valuable when it’s used properly. First off, that means that it suits your marketing objectives. It’s best use is when those objectives are to find new consumers, versus remarketing campaigns focused on existing customers. From there on, it’s a matter of the analytics you apply to the data set, and how it is used in combination with first- or second-party data.


Third-party data is not intrinsically less valuable than second or first-party. It just takes the right kind of intelligence to deploy successfully. When it does, it’s as powerful and impactful as anything else.


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