As 2017 quickly approaches, businesses are focused more than ever before on gleaning insights from first-party, third-party and most recently, second-party data.
Yes, that’s right – second-party data. Now, some of you might be wondering, What exactly is second-party data?
Unlike first and third-party data, second-party data is shared between companies on a mutually beneficial basis. According to Forrester, “Second-party data sharing is when a retailer, brand, publisher, or marketer gains transparent access to the website audience data of another retailer, brand, publisher, or marketer for marketing purposes — to their mutual benefit.”
The concept of second-party data sharing has actually been around for years, yet it is just now disrupting the analytics market and is expected to grow in the coming years. According to Forrester’s report, “The Era of Second-Party Data is Here,” “Second-party data is going to grow substantially over the years, as organizations look for alternative data sets for first and third-party data, which lack in quantity or quality.”
The question then comes to mind: Why now?
Currently, data suppliers are beginning to streamline the process of second-party data sharing. These suppliers are eliminating the need to establish direct data sharing relationships with other companies, which is a very difficult and time consuming task.
Jumpshot, for example, is a San Francisco based marketing analytics startup that provides organizations with this type of data from clickstream analysis of the largest consumer panel in the industry.
“In the past, it’s always been very difficult or expensive to access second-party data. After all, no one is going to just open up their CRM or web analytics data and share it with the world, unless there is a huge opportunity for them in some way. But through clickstream activity captured at the user device level, another company’s web metrics, browsing activity, and purchase data is now easily within the grasp of anyone, without having to create a direct relationships with that company,” said Randy Antin, Jumpshot’s VP of Marketing.
And although this might not sound challenging, just consider how willing businesses are when it comes to sharing customer information with other companies…. Not very.
Finally, a third question comes up: What are the benefits of second-party data sharing?
While data sharing can provide a number of benefits, businesses are seeing 3 main advantages:
Unfortunately, first-party data is no longer capable of meeting marketing needs. This is because first-party data tends to only be relevant for what prospects do on a company’s own web properties. Often times this data lacks crucial information about a customer’s preferences and actions that take place elsewhere online.
“For many advertising and marketing leaders, relying solely on their own first-party data is not sufficient for their marketing needs.