Making the best use of data is vital to any effective digital advertising campaign. From engaging your most loyal customers to finding completely new ones. You can make the most of even smaller budgets when using what you already know about your current customers. But how do you make the most of first, second, and third party data? What are they? And what’s the difference?

In this post, we will outline the differences between first, second, and third party data and how you can best use them to your advantage.

What is first party data?

First party data refers to data your business collects about customers who buy and engage with you, your website, or your app. Typically, this form of data is captured by cookies. It is best stored in a CRM, where it can be safely stored (protecting customers and your reputation). Business analysis tools and other analytic platforms can then turn this data into bona fide information that turns data into money.

In many respects, first-party data is the pièce de résistance when it comes to customer data. It allows you to use what you know about a customer, their engagement with your products, website, and adverts, and turn this into new sales. It can allow personalized recommendations that reflect what a customer needs or wants, sometimes even before they know it.

However, first-party data isn’t restricted to understanding current customers alone. Indeed, it is perhaps at its most valuable when the insights about current customers are used to inform advertisement campaigns. In this way, what you already know about customers can be used to inform how you expand your reach as well as getting the most out of existing engagement.

What is second party data?

Second-party data is very much like first-party data. However, it is the first-party data of someone else. Typically, people might be willing to exchange first-party data they have collected in return for the first-party data you have collected. Where businesses feel their target demographics might overlap, this can be a fruitful collaboration. For example, this could be a stylish magazine partnering with a high-end watch company.

As such, just like your own first-party data, second party data can be used to target new custom. It can also be used to inform the decisions you make when trying to reach new audiences and expand your reach. Moreover, investing in secondary data can lead to fruitful relationships and mutually beneficial partnerships with the businesses engaged with.

What is third party data?

Third-party data refers to data collected by companies known as data aggregators. Typically, these companies amass huge amounts of data, opening up access to huge numbers of potential new customers. However, typically, the data held are open to anyone else keen to purchase it. As such, you might have access to quantity but not quality when it comes to third-party data.

Indeed, in many respects, third-party data won’t offer you the insights about your customer base that both first and secondary can. For example, you are not tapping into a unique market as any of your competitors can access the same data for a fee. Nevertheless, it can be a cost-effective way to expand your reach beyond the limits of your current customer base.

Typically, it is paid for on a ‘Cost per Mille’ (CPM) basis. Simply put, this is a fee per thousand views. The more views you get per $ spent, the better your CPM. However, just being seen does not necessarily lead to a Return on Investment (ROI), which is perhaps a more important metric when it comes to measuring the benefits of different types of data.

What’s best, first, second, or third-party data?

Ultimately, to optimize your use of data, you need to know what you are going to be using it for. If you want to run a highly targeted campaign, third-party data isn’t going to be of much use to you. But what about if you’ve not made any headway when it comes to new customer reach? Even after the careful exploration of first and secondary data? Well, then third-party data might be the key to unlocking new markets and expanding your horizons. Although, with changes to GDPR, third-party data might very well be dead.


First-party data is undoubtedly the most important area to focus on when it comes to a detailed understanding of your customer base. However, there is always room in any marketing strategy for the use of any of first, second, or third party data so long as it is used for the right purposes.

Ultimately, this means running an effective data management strategy to ensure you are using and storing data in the right way. And the careful management, protection, and use of any type of first, secondary, or third party data will ensure you get the most from it.

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