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First-Party Data vs. Third-Party Data: What's the Difference

a hand reaches out to different icons that represent data

Understanding the distinctions between first-party and third-party data is crucial to achieving better campaign results. Knowing these differences helps advertisers stay informed about industry trends and projections.

At this point, it’s no secret that data-driven marketing is vital to strategy. Still, if you’re not convinced, speed and accuracy are among the most essential benefits of accessing data.

Gain a competitive edge as we cover how to effectively leverage both first-party and audience third-party data to your advantage.



What is First-Party vs. Third-Party Data?

When it comes to data in advertising, the main difference between these two is in the source of the data. First-party data is internal and third-party data is external. 

Each data type has its own strengths, and marketers must know which one will develop influential audience targeting strategies.


First-Party Data

First-party data is the information collected directly from users who have interacted with a specific brand or organization.

It encompasses consumer data obtained through touchpoints like website visits, apps, online purchases, or newsletter subscriptions. This data is highly valuable since it’s sourced internally by the brand itself.

First-party data provides insights into customer behaviors, preferences, demographics, and past interactions, allowing marketers to tailor their offerings.

In simpler terms, first-party data is like having a direct connection with your customers since you know their interests and preferences firsthand.


Third-Party Data

External entities or sources gather third-party data, separate from a specific brand or organization.

It is obtained from various data providers, such as websites, mobile apps, or other platforms. This data is then compiled and made available for marketing and advertising purposes.

Third-party data includes various demographic, behavioral, and digital information about audience segments. Think of third-party data as a vast collection of insights and attributes from sources outside of a company's own data collection efforts.

Leveraging third-party data taps into a wealth of information for a broader view of consumers and broader market trends, to identify new audience segments, and enhance audience targeting strategies.


First-Party Data: Data You Collect From Your Audience

The collection of customer data is undergoing a significant change, as tracking methods like third-party cookies are nearing the end.

Google has decided to block third-party cookies in its Chrome browser by 2024 and Apple has given its users options to opt out of tracking and third-party cookies on Safari and iOS devices.

In this shifting landscape, advertisers are seeking alternatives, which has placed even more attention on first-party data.

Plus, the value of first-party data gives marketers the chance to deliver even more personalized and engaging messaging to consumers, since it’s acquired from the following:

  • Loyalty programs

  • Websites

  • Mobile apps

  • Customer surveys

  • Email

  • Social media

  • CRM systems

Valuable information you can collect from first-party sources includes:

  • Demographics

  • Interests and behaviors

  • Visited websites

  • Interactions

  • Purchase history


Embracing the Power of First-Party Insights

Although the data collection may be similar for both, third-party data commonly involves purchasing data from other companies by establishing partnerships for mutual benefits or conducting research with available information.

Here are some examples of third-party data sources:

  • Oracle Data Cloud

  • Salesforce Marketing Cloud

  • Acxiom

  • Google

  • Facebook

  • Amazon

  • Experian

  • Visa

However, the significance of third-party data collection and distribution is diminishing. Third-party data sources do not accurately capture a comprehensive consumer snapshot.

As consumers increasingly question sharing their data, first-party data is becoming essential for the future of advertising. To obtain their information willingly, consumers expect a clear value exchange.


Importance of First-Party Data for Advertising

Now, there has been a paradigm shift in the marketing landscape, with increasing recognition of the critical role first-party data plays. 

It offers unique advantages that make it necessary for effective advertising strategies:

  • Pinpoint Accuracy: First-party data is inherently more accurate and reliable because it comes directly from your own interactions with customers. This helps avoid targeting ads to consumers who are unlikely to be interested in the ad.

  • Trust: As users become more concerned about data privacy, leveraging first-party data demonstrates transparency and builds trust. By collecting data with explicit consent, brands can ensure a mutually beneficial data exchange.

  • Customization and Differentiation: Data collected empowers marketers to tailor their messaging to individual customers. This level of customization helps differentiate the brand from competitors, leading to advertising that generates results.

Embracing first-party data activation enables brands to stay relevant, drive meaningful connections, and achieve long-term success in their advertising endeavors.


Wait a Minute — What About Second-Party Data?

Second-party data refers to first-party data obtained from another business or organization, which can be seamlessly integrated with a company's internal data sets. 

This data type is often sourced from partners within the supply chain that closely relate to the consumer's business. Even though the data is not directly owned by the consumer, it is pertinent to their specific business operations. 

Second-party data serves as a valuable resource for enhancing insights and expanding the scope of available data, allowing businesses to gain a more comprehensive understanding of their target audience and improve their marketing strategies.


Collection, Purpose, and Data Usage

Collecting first-party data to narrow down the audience's location and interests lets advertisers tailor their connected TV (CTV) efforts to reach highly receptive viewers.

This easily increases the likelihood of capturing the attention of those who have a genuine need for the advertised products or services, even if they were previously unaware of it.

To extend audience engagement and conversion rates, retargeting plays a vital role. Add in the ability to measure each interaction and you can run through the following scenario:

  • After viewers have watched a targeted CTV ad, you can retarget them on their mobile devices, laptops, and other platforms 

  • Retarget already-engaged viewers, building on their initial interest and encouraging them to take further action 

  • This clickable approach to CTV advertising fosters increased follow-through from interested parties

As you can see, a customer data platform is not limited to initial targeting. It also provides valuable insights for monitoring viewer engagement. 

Analyzing data related to retargeting ads, website visits, online behavior, and more, allows advertisers to gain a deeper understanding of campaign performance.

A comprehensive data-driven strategy allows for informed decisions. You identify what works best, what doesn't, and what adjustments are needed to optimize advertising strategies.


From Insight to Impact: How Data Can Revamp Your Advertising Strategy

With first-party data derived directly from your audience, you have unique insights into their behaviors, preferences, and interests.

It's a treasure trove of information you hold to unleash the power of precision targeting, reaching those who are genuinely interested in your offerings.

On the other hand, third-party data offers a broader perspective. But, relying solely on a third-party data provider can be like sailing into uncharted waters. The lack of control and verification raises concerns about accuracy.

So, what are you waiting for? Dive into a data management platform, collect first-party data and third-party data, and reach the full potential of your advertising campaigns.

Contact us to explore the possibilities ahead for your next campaign strategy. Leverage our experience and expertise, and connect to your desired audience at the right time.

Andy Dixon is a seasoned Content Writing Specialist at Strategus, renowned for his expertise in creating engaging and impactful digital content. With over a decade of experience in content creation, Andy has honed his skills in a variety of niches, ranging from technology and marketing to education.

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