Third-party data

What is third-party data?

Third-party data (also known as “third party data”, “3rd party data” or “3P data”) refers to customer information lawfully collected by data providers that have no direct relationship with the customers. 

These data providers or data aggregators – the “third party” – typically source, aggregate, anonymize, and sell third-party data sets to brands looking to:

• Understand their customers in greater depth
• Segment their customers more effectively
• Personalize customer engagements

Understanding the potential uses of third-party data – or pursuing 3PD best practices – is increasingly crucial for a marketing industry being reshaped by the rise of AI and the fall of cookies. 

• See also:
  • What is first-party data (AKA first party data, 1st party data, or 1P data)
  • What is second-party data (AKA second party data, 2nd party data, or 2P data)

Third-party data examples

Third-party data can take many forms. It is collected from a huge number of sources from many different perspectives, providing insight across a wide range of data points. Examples of third-party data include: 

• Behavioral data – content people view, links they click, or items they add to their cart.
• Demographic information – personal data such as age and gender.
• Interest and intent data – information revealing audience interests and likelihood to make purchases based on online behavioral patterns. 
• Location data – geographical audience information.
• Purchase history – customer buying patterns.
• Psychographic data – information regarding customers’ values, attitudes, interests, lifestyles, and personality traits.
• Social media activity – interest and engagement data based on interactions across social media platforms.
• Technographic data – software, hardware, apps, and device types audiences use. 
• Firmographic data – facts and figures related to organizations such as industry, number of employees, revenue, and location.

Third-party data benefits and use cases

There are many approaches to incorporating third-party data in marketing strategies. Let’s take a look at the commercial rationale for doing so, and some typical use cases.

Broad benefits and applications of using third-party data

1. Incorporating third-party data in marketing strategies delivers several benefits. Firstly, the scale and near limitless range of available 3PD datasets enable brands to access markets, prospects, and insights well beyond the reach of their first-party data. Actionable insights can be generated quickly and at a relatively low cost.
   
2. Each new customer data point or characteristic made accessible by third-party data also provides brands with fresh segmentation criteria with which to activate and extend their customer base, while lending additional insights into industry trends and market dynamics.
   
3. Crucially, the breadth of third-party data also acts as a powerful lever to enrich a brand’s understanding of its customer base, for example, by appending its first-party data. Third-party data provides a conduit to detailed insights that would otherwise be unavailable to them – insights stemming from customers’ interactions with other businesses – from buyer behaviors and budgets to interests and intent.
   
4. Supercharging customer knowledge like this paves the way to another key third-party data deliverable – personalization of customer engagements or experiences. Enhancing personalization with third-party data allows brands to communicate with relevant, timely, and meaningful cross-platform content. It enables them to demonstrate understanding and treat customers as individuals. 

This personalization is a key driver of purchase intent. In fact, our recent study Customer Intelligence – How well do you understand your customers? showed that 66% of people are more likely to buy from a brand that treats them as an individual.

Other common use cases for third-party data

These broad benefits play a role in many specific third-party data use cases. Some of the most frequently used examples include:

• Building out a more holistic customer view: Third-party data can plug the gaps in a brand’s zero-party data, first-party data, and second-party data, ensuring their customer data platform (CDP) or customer relationship management (CRM) software has a comprehensive, nuanced customer view with which to orchestrate ad campaigns.
  
• Lookalike audience modeling: brands can seek third-party consumer data sets with characteristics that match those common to their high lifetime value customers. Shaping engagement strategies to resonate with high-value prospects helps maximize return on ad spend (ROAS).
  
• Proactive customer service and predictive analytics: integrating detailed third-party audience data into artificial intelligence (AI) training data enables brands to provide dynamic customer experiences by anticipating customer preferences, such as making more informed product recommendations.
  
• Co-marketing initiatives: third-party data can be used to maximize the value of second-party data-sharing initiatives. For example, a credit card issuer buys third-party data on consumer shopping habits. It identifies its customers who frequently shop at a partner retailer but don’t have their co-branded card. This data gets shared with the retailer partner to co-market the card.
  
• Loyalty programs: by analyzing third-party data related to customer interests and behaviors, brands can tailor loyalty rewards to be more personalized, relevant, and therefore attractive.
  
• Group-specific engagement: access to third-party data allows brands to explore new routes to customer base growth without having to overcommit budgets by trialing engagement with specific groups. Target audiences pulled from third-party data might include different demographic groups or those with particular interests, at different life stages, different earnings potential, or even those defined by engagement with competitors.
  
• Industry benchmarking: Third-party data includes industry-wide metrics and benchmarks against which brands can compare their performance. For example, retailers could use third-party data to learn the average customer acquisition cost and conversion rates for their industry.

Best practices for acquiring third-party data

Given the breadth of third-party data available, it’s no surprise that marketers can acquire 3P data from a similarly broad range of specialist data brokers or marketplaces. However, it’s important to conduct due diligence on these third-party data vendors/providers (and their data) before engaging them.

Integrating poor or poorly sourced data into a CDP, CRM, or unified data layer can tarnish overall data integrity while diluting campaign effectiveness. Activating unethically sourced third-party data also risks serious damage to a brand’s reputation.

Here’s a checklist for selecting a third-party data partner:

• Privacy, ethics, and compliance: wherever people’s personal data intersects with marketing, it’s vital that all privacy concerns are addressed. Brands should ensure their third-party data provider adheres strictly to data privacy regulations such as the California Consumer Privacy Act (CCPA) or the General Data Protection Regulation (GDPR), that personal data is shared with the person’s consent, and stringent security measures are in place to protect personal information.
• Check the range of available data: optimizing campaign ROI with third-party data requires a broad range of insights including predictive, attitudinal, behavioral, and transactional. Marketers should make sure the provider has the required breadth of data. 
• Assessing the quality of third-party data: brands should request sample data and conduct some manual checks on its accuracy and recency.
• Data provenance: any legitimate provider should be happy to verify its sources.
• Collection and processing methodology: it’s important to clarify (get documentation about) the provider’s data collection and processing methods to confirm regulatory compliance and best practices are in place.
• Confirm compliance with intended usage: before purchasing third-party data, brands should double-check that the provider has the right to use the information for the intended purposes (without having to re-acquire consent).
• Validation and testimonials: brands should request customer testimonials from the prospective data provider (and verify them independently). 

With this framework marketers can be confident the third-party data they acquire is accurate, up-to-date, and ethically sourced – the perfect foundation for activating personalized marketing campaigns and tailoring customer experiences.

Third-party data challenges and considerations

Sticking to third-party best practices should allow brands to navigate any legal considerations in buying third-party data.

The primary risks associated with third-party data use are negated by careful selection of data providers. To recap, these risks concern:

• Data security and regulatory compliance
• Data quality, recency, and accuracy issues
• Reputational risk using third-party data without proper consent

While not risks, there are further considerations for brands looking to use third-party data:

• Lack of exclusivity: unlike first-party data, third-party data is not exclusive to brands – it’s equally accessible to competitors. Delivering maximum value from an advertising campaign or customer experience initiative using third-party data requires selecting the right data partner, with the right data to deliver against specifically identified business goals.
  
• A lot of options: there are many data aggregators, marketplaces, and specialist providers from which to choose, each offering a different range and quality of data services. It’s important to work with partners with a clear pedigree in specific areas of interest.
  
• Data dates quickly: because people move, change jobs, or undergo changes in circumstances frequently, third-party data has a shelf life. Data sets need to be checked and verified regularly. (Some data partners will do this as policy.)
  
• Context: to interpret third-party data correctly it’s important to understand the context under which it was collected and processed.
  
• Data integration and matching: integrating third-party data sets with internal data architecture can be time-consuming and technically complex. Selecting a data provider or data partner capable of providing enterprise identity solutions and data hygiene services can overcome these issues. Such solutions enable aligning datasets by matching, validating, and appending individual data points into unified records.

Acxiom Third-party Data Products and Services

With nearly 60 years of experience in identity, customer data management, and the ethical use of data, Acxiom is the leader in customer intelligence.

We have everything brands need to maximize the impact of third-party data marketing efforts. This includes the industry’s top-performing audiences and data enrichment services with the largest catalog of more than 12,000 global data attributes specifically focused on providing personalized experiences. 

In addition to this high-quality data, here are some of the other third-party data services we offer:

Identity solutions

Acxiom’s award-winning Real Identity™ and its cloud-native counterpart Real ID™ enable brands to check, match, validate, and append customer data points into more comprehensive, accurate records. 

This ensures that every extra characteristic that can be learned about customers by using third-party data is accurately matched with the right individuals and consolidated in a centralized record.

Data Portrait Analysis (DPA)

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Achieve a New Level of Audience Insight With a Data Portrait Analysis

Brands can discover how Acxiom’s third-party data can start working for them with our Data Portrait Analysis (DPA).

This interactive tool shows how a brand’s customer data stacks up against thousands of unique characteristics, uncovering new insights into customer behaviors, attitudes, affinities, and preferences

Data quality and hygiene services

With consumer contact data decaying at 2-3% per month, around 30% of data needs cleansing every year. Regular inputs of third-party data can push this percentage higher. Our data quality and hygiene services will help clean, de-dupe, standardize, and complete customer data records – all of which means campaigns reach more people, have a greater impact, and generate a greater ROI.

Personicx® Consumer Segmentation Solutions

Personicx® is a tool designed to help brands understand, group, and access people based on a broad range of criteria including income, life stages, residential status, consumer habits, leisure preferences, location, travel tastes, media consumption, and social engagements.

It provides a unique opportunity to gain multi-faceted insights, create meaningful customer experiences, and quickly define top-performing audiences.

Audience Propensities®

Acxiom’s Audience Propensities® provides unique behavioral insights. Advanced analytics leverage more than 3,500 indicators to accurately predict consumer brand preferences, shopping intents, media habits, and more.