What is 2nd Party Data?
2nd Party Data is a specialized type of data used predominantly in Programmatic Advertising. While 1st Party Data is generated and owned by the company that collects it, 2nd Party Data is essentially 1st Party Data from another source. Unlike 3rd Party Data, which is purchased from aggregators and not directly from the source, 2nd Party Data is bought directly from the company that owns it. This type of data often includes behavioral and social media data, originating from familiar sources like websites, social media, surveys, and apps.
Advantages of Using 2nd Party Data in Programmatic Advertising
When it comes to Programmatic Advertising, 2nd Party Data offers numerous advantages. Firstly, it gives marketers access to high-quality data that is almost as reliable as 1st Party Data. This is because the data is being purchased directly from a trusted source. Secondly, it enables marketers to scale their campaigns more effectively by using data that they may not have had access to otherwise. Thirdly, it offers the opportunity for partnerships between companies, potentially opening new revenue streams and avenues for business growth.
How to Acquire 2nd Party Data
To get your hands on 2nd Party Data, direct connections with the owning company are often required. This is a significant departure from 3rd Party Data, where you might buy from an aggregator or data marketplace. Several dedicated marketplaces exist to facilitate these direct transactions. However, due diligence is required to ensure that the data aligns with your specific Programmatic Advertising goals.
2nd Party Data vs Other Types of Data
It’s essential to differentiate 2nd Party Data from 1st and 3rd Party Data. While 1st Party Data is gathered directly from your customers and is wholly owned by your company, 3rd Party Data is purchased from aggregators and is available to multiple buyers. In Programmatic Advertising, 2nd Party Data offers a middle ground. It provides data of nearly the same quality as 1st Party Data, but with the added scale and reach associated with 3rd Party Data.
Risks and Compliance
Using 2nd Party Data is not without its challenges. Because you are dealing directly with the data’s owner, you must ensure that all transactions comply with privacy regulations like GDPR or CCPA. Furthermore, it’s crucial to have transparency in the data transaction, as poor-quality data can compromise the effectiveness of your Programmatic Advertising efforts.