Time To Overhaul The Industry Data Labeling System

Data experts at Lotame believe it’s time to stop using antiquated terms to label first-, second- and third-party data and search for some updated terms.

Lotame rocket scientist Adam Solomon believes professionals are hurting the industry by organizing data into “parties” — first, second, and third.

Industry professionals often get lost in the jargon, and that’s one of the problems. The labels are outdated and confusing, he says, so in meetings with clients he has begun to advocate a new labeling system. He thinks the focus should turn toward data types such as age, gender and household income along with quality, rather than data party.

“It’s become a confusing mess,” he said. “People are confusing first-, -second- and third-party data with cookies.”

As a reminder, first party refers to data belonging to the first party, such as a brand or publisher. Second party refers to data belonging to the second party in a transaction -- for example, the publisher’s advertiser on its site. Third-party data comes from a completely separate source, neither publisher nor advertiser.



“The labels are being used as proxies for quality and that’s not accurate,” Solomon said.

During the next couple of months, Lotame will spend time talking about the types of data and category — demographics, TV viewing, past purchase — and the quality and sourcing rather than where the data originated.

“If a brand’s looking for information about new home buyers, there are companies that have aggregated records such as taxes,” he said, pointing to Experian as one source.

There could be other companies that have social sharing widgets. They might relate to services for new home buyers and have data that refer to new home buyers because they’re inferring some sort of web or search behavior.

Lotame plans to roll out a solution focused on the “needs” of clients, rather than specific tactics of where the data originated. The source gives it a label, such as first-, second-, third-party, but Solomon said those conversations should focus on type and quality.

When asked about pricing changes to the data segments, Solomon said pricing should "shake out over time." The data that performs should be more valuable, or at least command a higher CPM. 

Today, CPMs are driven on scarcity and brand name, he said. 

Solomon also wanted to make the point that there is no connection between third-party data and third-party cookies -- they are very different. 

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