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The OTT Advertiser’s Guide to Second & First-Party Data

Modern advertisers can’t just have a pretty good idea of who they are selling to. In order to implement successful campaigns, you need to have an intimate understanding of your buyer’s everyday struggles and purchasing tendencies so you can present your product or service as the best solution at the perfect time. 

That is where data collection comes into play. In such a digitally dominated world, advertisers and marketers have more access to data than ever before. However, privacy-protection regulations are favoring consumers more and more, forcing advertising teams to adjust their strategies.

To help you better understand the evolving world of data collection, our team at Strategus has compiled this comprehensive guide to second and first-party data. This handbook outlines everything you need to know about first-party data, including:

  • The Difference Between First, Second, And Third-Party Data
  • What Is First-Party Data, And Why Does It Matter For CTV Advertising?
  • Combining First-Party Audience Data For Better Omnichannel Campaigns
  • The Beauty Of Second-Party Data
  • The Truth About First-Party Data Enrichment
  • Second vs. First-Party Data Targeting Strategy
  • First-Party Data Marketing And Proprietary Data: Use What You Have!
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The Difference Between First, Second, And Third-Party Data

To begin optimizing your data collection efforts, it’s crucial to understand the difference between first, second, and third-party data. When used correctly, data allows you to target consumers and meet them where they want to be met. 

While data and privacy can be a touchy topic, the fact remains that consumers prefer advertisements crafted for them, and data collection is the tool that enables that to happen. Ultimately, the difference between data sources comes down to quality and reach. Using these differences, you can craft a marketing strategy around the data made available to you. 

First-Party Data

The undisputed champion of data collection, first-party data is the best source of data for marketers and advertisers. First-party data is the data collected directly from your sources, meaning you own it. This data source is significantly valuable because you get your information firsthand from your consumers, eliminating any misinterpretations and errors and making it the most effective and reliable form of data collection.

There are many reliable ways to gather first-party data, including:

  • Google Analytics
  • Customer surveys, feedback, interviews, etc. 
  • Website
  • Email
  • Social Media
  • CRM Systems
  • Call Centers
  • Mobile Apps

The main benefits of first-party data are proprietorship and accuracy. You get the data directly from your sources, meaning there is no chance it has been manipulated or misconstrued. Also, you own the data yourself and nobody else can use it without your permission.

Third-Party Data

Approaching data collection from the perspective of two poles, first-party data is the North Pole and third-party data is the South Pole. While first-party data is collected from your own proprietary sources, third-party data is obtained from purchasing data from another collector. 

Popular third-party data sources include:

  • Oracle Data Cloud
  • SalesForce Marketing Cloud
  • Acxiom
  • Google
  • Facebook
  • Amazon
  • Experian
  • Visa

Third-party data is the least reliable, effective, and efficient source of data collection since you are forced to purchase data that many other companies also have access to.

Second-Party Data

Second-party data sits somewhere around the equator of our analogy and is the customization of another company’s first-party data. This is a great alternative for companies that are unable to collect first-party data for one reason or another.

Here at Strategus, we look at second-party data as the sweet spot of data. Sure, it’s not as proprietary as first-party data, but the customization of the data collected makes it unique to your company. Think about it in terms of raw ingredients and the final dish. Everyone can go buy the same ingredients from a grocery store, but it’s what you do with those ingredients that make it unique to your final dish.

Read our full post on the difference between first, second, and third-party data here.

What Is First-Party Data, And Why Does It Matter For CTV Advertising?

As leaders in the CTV/OTT advertising industry, we approach first-party data through the CTV advertising world. With more and more people moving away from cable services and opting for a plethora of streaming services, CTV/OTT advertising is the present and future of the industry.

We already know that first-party data is the most reliable form of data collection (with customized second-party data trailing close behind), so now it’s time to understand just how beneficial this proprietary data is for CTV advertisers. 

The Marriage of Proprietary Data and CTV Advertising

The use of proprietary data and CTV advertising is the best of both worlds — it’s the combination of credible data that you own and the most effective targeting techniques to speak directly to consumers who are ready to buy your product. 

CTV campaigns that fail to leverage proprietary data are unable to gain a deep understanding of their consumer base, leaving plenty of room for error. Likewise, using proprietary data to construct traditional TV advertising campaigns or anything else outside of the CTV space is a waste of great resources. One can live without the other, yes, but they are far less effective on their own.

Here’s why proprietary data is incredibly valuable in CTV advertising:

  1. Target already interested viewers on CTV
  2. Retarget them after watching the ad on mobile devices, laptops, and tablets
  3. Use first-party data to monitor their engagement with retargeting ads, website visits, online behavior, and more

Read our full post on first-party data in CTV advertising here to learn more about each of these steps.

Combining First-Party Audience Data For Better Omnichannel Campaigns

If you can’t already tell, we approach advertising with the belief that all tactics must work together to produce the best results. It begins with first-party data and CTV advertising, which now extends into omnichannel campaigns.

Targeting very specific people who are ready to convert is often a challenge that many advertisers experience. When you add in the fact that consumers now interact with brands across so many different devices and channels, it becomes even more difficult to target the right person through the right channel.

Proprietary Data and Omnichannel Marketing

Enter omnichannel marketing. Omnichannel marketing has surpassed the outdated, inconsistent ways of multichannel marketing. Though it has yet to be standardized across the industry, we define omnichannel marketing as delivering consistent messaging and advertising across the various devices and channels that consumers use on a daily basis to create a cohesive experience for a buyer throughout all touchpoints with your company.

Since the goal of omnichannel marketing is to create a consistent experience for consumers, your campaign should revolve around only the most accurate, trustworthy data. First-party data is the best of the best when it comes to proprietorship, but because it’s often difficult to collect and use, this opens the door for the combination of data sources. More on that later, but the fact remains that omnichannel campaigns that are founded on proprietary data have a better chance of producing results.

Read our full post here to understand how to combine first-party audience data in omnichannel campaigns.

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The Beauty Of Second-Party Data

First-party data is the gold standard of data collection, nobody can deny that. However, it’s often difficult for many companies to obtain, both from a financial and legal standpoint, due to changing privacy protection regulations. What if there was a way to still gather the same data in a trustworthy manner? That’s exactly what second-party data collection allows you to do.

Second-party data is often lumped in with third-party data as the ugly stepchildren of the data collection world. That narrative is becoming increasingly less common, and with good reason. Here are just some reasons why second-party data is a comparable alternative to first-party.

Same Data-Collecting Capabilities

Second-party data gives you the same essential information you need to target a specific audience, including:

  • Demography — age, marital status, job, etc.
  • Websites they visited
  • Interests & hobbies
  • Purchasing history
  • Time spent on websites

Similar Effectiveness

Did you know that second-party data has proven to be nearly as effective as first-party data? According to a report from Statista that divided marketers into three categories:

  • Traditional with an e-commerce component — 80% effectively used 1st party data, and 81% effectively used 2nd party data.
  • Traditional without an e-commerce component — 80% effectively used 1st party data, and 80% effectively used 2nd party data.
  • Direct brand marketers — 83% effectively used 1st party data, and 70% effectively used 2nd party data.

Read our full post about the beauty of second-party data here.

The Truth About First-Party Data Enrichment

In addition to the points made above, one of the main benefits of second-party data is its ability to enrich first-party data sources. To better understand data enrichment, we have to consider the dream and reality of advertisers.

The Dream

In a perfect world, advertising and marketing teams have access to first-party data from all of their customers free of charge. They can do with this data what they please and are able to craft perfectly curated campaigns that speak directly to their consumer. Sounds great, right?

The Reality

In reality, there are many obstacles preventing this from coming true for most companies:

  1. Not every company is able to activate first-party data
  2. Not every user consents to first-party data collection
  3. One source of data does not provide a complete snapshot of your buyer

First-Party Data Enrichment

This opens the door for data enrichment. First-party data enrichment is exactly what it sounds like — making your first-party data richer and more complete by combining data collection methods to create more in-depth representations of your buyers. It’s taking your first-party data to the next level and grooming it with the validation and contribution of second and third-party data.   

When done correctly, this booleaning of data becomes extremely advantageous for advertisers as it gives them a well-rounded view of their buyer rather than just their view of the buyer.

Read our full post on first-party data enrichment here.

Second vs. First-Party Data Targeting Strategy

We’ve discussed at length the various benefits of first- and second-party data already, but it’s still worth diving into these strategies and when to use them to produce the best results. The truth is that marketers should use both data collection methods as often as possible to create full representations of the buyer. However, there are specific scenarios where one is more advantageous than the other. 

When to Use First-Party Data Targeting

Because first-party data is almost always collected from current customers, the best time to use first-party data is when you are running a marketing campaign targeted at them. With access to their interactions with your company, you can understand what they enjoy/dislike about their experience with your company and how to adjust your strategy to appease them.

When to Use Second-Party Data Targeting

Second-party data targeting, on the other hand, is better for campaigns that are targeted at prospective buyers or customers from a partner. Because second-party data is obtained from other sources, this is a fantastic way to learn how potential buyers are interacting with other companies. With this information, you can craft a campaign that crosses their path at a pivotal point along their purchasing journey.

Read our full post on second vs. first-party data targeting strategies here.

First-Party Data Marketing And Proprietary Data: Use What You Have!

To begin this guide, we introduced the privacy-protection regulations that are forthcoming and what that means for marketing and advertising teams. Simply put, it means that your ability to collect proprietary data has never been more important. Proprietary data collection comes with many benefits, including:

  • Improved personalization efforts
  • Enhanced retention
  • Streamlined segmentation
  • In-depth trend forecasting

With Google already beginning the elimination of third-party cookies, a transition that will be complete in 2022, many teams are scrambling to find the best ways to collect proprietary data, be it first-party data or customized second-party data.

Read our full post here to learn more about the importance of proprietary data collection.

The Takeaway

Google’s privacy improvements, consumers’ expectations, and marketing/advertising teams’ needs have all combined to create the perfect storm of a data collection revolution. Companies that fail to adapt to this revolution will certainly be left in the dust. The collection of first-party data and customized second-party data is the path to success, so make sure your data collection methods are able to handle the changes.
Our team of CTV/OTT advertising experts at Strategus can help you utilize your data to its full potential. Contact us today to learn more about optimizing data in your next campaign.

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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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