Audience Data 101: Types of Audience Data & How to Use Them

A close up of a digital device that reads “online marketing
Larry Lubin May 28 ,2020

In today’s omnichannel landscape, analyzing the right kind of audience data can equip your brand with the ability to make confident marketing decisions at various stages throughout the customer journey. However, before you can rely on data to take your brand to the next level, you must first understand what it is.

There are several types of audience data available to brands, including first-party data, second-party data, third-party data, and zero-party data. Different business situations will call for one of these data types, or a combination of them. For forward-thinking companies, staying on top of data analysis and the rights of your users will, for many, be the difference between winning and losing.

In this article, we’ve broken down the four main types of audience data that brands can leverage. We’ll discuss how each of these insights can be collected and leveraged to achieve your organization’s goals.

1. First-Party Data

A man browsing the internet on his phone

First-party data represents all the customer data your company collects from their own sources, both online and offline. This includes information from your existing audiences when they visit your website, subscribe to your newsletter, make a purchase online, or interact directly with your brand. First-party data includes site cookies, CRM data, mobile app analytics, registration data, point of sale records, etc.

Since you collect this type of user data directly, first-party data is unique to your brand, providing you with useful information and insights into existing customer behaviour. This makes it accurate, relevant, and one of the most valuable data sets that brands can leverage when developing marketing campaign strategies.

Many brands have made collecting first-party data a priority as it helps them to better understand their customers’ interests, characteristics, and preferences. Armed with such information, they are in a better position to predict future customer behaviour, enhance targeting, create personalized strategies, and improve marketing campaigns for increased ROI.

One of the biggest downsides of first-party data is that it is limited, meaning your dataset will be somewhat restricted. While first-party data is oftentimes defined as the most valuable type of audience data for brands, you can’t rely on it solely to run marketing campaigns. You should support your marketing decisions using other types of data as well.

Brands use first-party data to:

  • Gain audience insights
  • Predict customer behaviour
  • Personalize marketing campaigns
  • Effective audience targeting
  • Target new audiences

2. Second-Party Data

Second-party data is audience data that has been collected by a company that they then sell to your brand to use. Essentially, second-party data is another company’s first-party data. It is your brand’s responsibility to build relationships with these companies to obtain their data.

Second-party data is extremely powerful as it adds more depth and scale to first-party data. With it, you gain additional audience insights that you can’t get from your first-party data alone. While first-party data helps you learn more about your existing customers’ interests, preferences, and behaviours, second-party data does the same for potential customers you may want to target because they’re likely to be interested in your products or content.

For example, if you run a taxi business, you can strike a data deal with a hotel chain to see which of their guests would require taxi services. You can then reach this new audience through targeted ads for your taxi services.

The downside of second-party data is that there may be potential for data privacy issues, ownership, and usage expense issues. It is also possible that you may run into challenges when integrating second-party data into your already established dataset.

Brands use second-party data to:

  • Inform targeted campaigns
  • Increase data scale
  • Reach new audiences
  • Predict customer behaviour

3. Third-Party Data

Third-party data is data that you can purchase from an aggregator who is not the original collector of the data. These aggregators accumulate their data from multiple sources where the original data was generated. Third-party data can include registration details such as names, email addresses, postal codes, phone numbers, social media handles, purchase histories, and site browsing activities.

Third-party data can be an important dataset for your marketing strategies and your customer insights. It helps brands enrich or supplement their own data and go beyond their usual audience to find new prospects who buy similar or complementary products and services.

Moreover, when a brand is armed with third-party data, it’s able to grow its targeted audience, creating new segments for more effective targeting and retargeting. These strategies can be used across multiple touch points, including email, print media, social media, and other digital marketing efforts, boosting brand recognition, reputation, and in the long run, your brand’s ROI.

Like the first two, third-party data has its own set of disadvantages. According to a review by Deloitte, third-party data is often perceived to be of lower quality than other types of audience data. Since it has been pulled by data aggregators for a profit, there are questions pertaining to its accuracy as there is no direct relationship with individual customers. It is also not unique, which means that your competitors may have access to the same data as you, potentially impeding the effectiveness of your marketing campaigns.

Lastly, there is the risk of data breaches with third-party data, which can result in your brand getting into hot water with data privacy regulators. In such a case, your brand may face costly penalties in addition to losing consumer confidence and loyalty.

Brands use third-party data to:

  • Enhance both first and second-party data
  • Expand their existing audiences
  • Increase the precision of their targeting
  • Discover new audiences

4. Zero-Party Data

A woman on her computer

More than 80 percent of US consumers feel they have no control over how their data is collected and used. With many consumers hesitant to share their personal information for fear that their data may fall into the wrong hands, how can brands make consumer-generated data work for them? This is where zero-party data comes in.

New in the audience data game and at the forefront of many marketers’ strategies, zero-party data (ZPD) represents a dataset that consumers provide intentionally and proactively because they trust your brand. It can include data points like preference data, purchase intentions, or personal context.

ZPD allows your brands to build direct relationships with consumers by asking them for the exact data you want, such as their needs, preferences, and intentions. This is poised as a value-based exchange. For example, your brand provides a coupon or sample in return for this information. The result is that your brand can better personalize its marketing efforts, services, offers, and product recommendations while simultaneously building customer trust and loyalty.

ZPD also comes at a time when third-party data is becoming less attractive to marketers due to several events that have dampened its use. You may remember the Facebook and Cambridge Analytica data scandal, where people’s data was harvested from their Facebook profiles without their consent. Search engines are also cracking down on third-party data. Safari has already made tracking users through cookies harder by deleting third-party cookies and Google has plans to ‘phase out’ third-party cookies in Chrome.

There’s also the General Data Protection Regulation (GDPR), which states that people’s data can only be used if they give a company explicit permission. Marketers and brands who don’t play by the rules are at risk of hefty GDPR fines.

With all this in mind, brands are opting for zero-party data over the other types of audience data as it is permission-based and can be highly useful in personalized marketing efforts. As it currently stands, 15% of marketers are planning to use zero-party data to further enhance their marketing practices.

Brand use zero-party data to:

  • Augment first their first, second and third-party datasets
  • Gather greater insights into customer needs, interests, and intent to achieve the customer personalization
  • Provide greater consumer clarity and accuracy since you do not have to infer preferences or do guesswork
  • Build a trusted consumer community channels
  • Provide customers control and choice over how brands contact them
  • Create a culture of transparency

Summing It Up

It is no longer possible for organizations to effectively scale revenue without the use of audience data. For brands that wish to increase audience engagement and improve their ROI, it is critical to have an effective data collection strategy in place.

Each type of audience data comes with its own benefits and disadvantages. However, well-managed and controlled zero-party data supplemented by first-party datasets will guarantee you have access to accurate and up-to-date information about your target audience.

About the author: Larry Lubin

Larry Lubin

Larry Lubin is founder of BlueRush and has over 30 years of experience providing strategy and solutions to many of North America\’s leading financial firms. Many leading applications for financial institutions were developed by Larry and teams he has worked with throughout his career. As CEO of BlueRush, Larry is providing a much needed vision for a new age of Fintech bridging the realities of legacy and the regulatory environment with unlimited possibilities through advancement in digital technology to empower the consumer. BlueRush is a digital solutions company specialized in financial service and healthcare solutions.

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