We’ve all heard of first- and third-party data, the bedrock of the data marketing landscape. Second-party data is a bit more obscure, but if the initial apprehension about sharing private customer data can be overcome, marketers could unleash an entirely new dimension to their data-marketing practices.
Think of second-party data as first-party data acquired from another firm, or a brand using some other brand or retailer’s first-party data for its own marketing goals. The way in which this data is shared between parties varies; there are often constraints that prohibit data being shared with competitors, and other particular revenue-sharing procedures.
“Brands are often worried about losing control of their proprietary data if they share with too many third parties. The lack of understanding about the structural constraints when using second-party data is hampering the growth of such data-sharing initiatives,” said Steve Ustaris, CMO of OwnerIQ, a company that provides a platform for second-party data solutions.
Firms like OwnerIQ aim to make it easier to obtain second-party data by providing a marketplace where retailers and brands can make connections with each other in a transparent and accelerated fashion.
Despite barriers to the wholesale adoption of second-party data usage, Ustaris believes that a majority of retailers and brands will be party to some sort of second-party data-revenue-sharing relationship by 2017.
While large companies the likes of Oracle and Adobe are moving into the business of developing second-party data relationships, there are often arguments over compensation models, noted Ustaris.
Legal restrictions and technical requirements when sharing proprietary data between companies can get complicated. As more second-party data sharing platforms emerge, the value of using these approaches will become clearer as data becomes an increasingly central component of programmatic marketing practices.
“All it will take is one big marketing agency to embrace second-party data and the market for it will explode. We may be two to three years out for such adoption, however,” Ustaris said.