Understanding the Difference Between Zero, First, Second and Third Party Data

What is the Difference Between Zero, First, Second and Third Party Data

Now, more than ever, where you get your data matters. That’s why understanding the difference between the different types of data — zero, first, second, and third— is critical to plotting out the right strategy to keep your data secure and your customers happy. While first and third-party data are the most commonly discussed, it’s also important to understand zero and second-party data.

While third-party data has comprised the majority of the data that marketers and analysts work with (because it was easy and readily available), the evolution of data privacy regulations and the rigors of crafting personalized customer experiences are elevating first-party data.

Summary of Different Data Types

This table provides an overview of the different data types, how they are used, and examples of each.

What is it?

How used?

Collected with consent?

Examples

Data customers give to your company through a survey, poll, or similar means

Companies need more permission to engage in personalization. Having your customers share data with you amplifies the value of your first-party data provided it’s accurate.

Yes

Personal information
Potentially sensitive data (e.g., political opinions)
Intentional behaviors
Preferences

Data your company gathers from consumers interacting directly with your brand that helps enrich the data you’ve collected.

With first-party data, you can analyze how consumers interact with your brand to improve the experience and deliver better engagement holistically and individually.

It Depends (Subject to local regulations)

Behaviors or actions from your website, app, product
Email or SMS interactions
Purchase histo

Second-party data is shared with trusted partners. Depending on the regulation, second-party data may be considered “sold” data and subject to regulations.

If you work with trusted partners, it may make sense to extend your audiences and create synergistic experiences. Trade shows and webinars are two ways to accomplish this.

Yes

Behaviors or actions from another company’s website, app, product
Email or SMS interactions
Purchase history

Data collected by an organization that doesn’t have any direct link to the customer. Usually, the data is collected by data aggregators for the express purpose of selling it to other companies.

Generally used to clean up your data or enrich your data so you have better/more insights to improve your campaigns. It may cost you more than what you pay upfront.

Unknown – Depends on data provider

Demographics
Behavioral
Contextual

Market Forces Impacting Customer Data

Let’s first take a look at the market forces driving the use and availability of different data types

Zero Party Data, though limited, is still important

Zero party data is very straightforward: Since consumers are sharing this data intentionally and with consent, there is less concern about violating consumer data protections and establishes trust between a consumer and a business. The critical element of zero party data is that it contains data a consumer has voluntarily provided vs cookies which contain consumer data not necessarily provided with consent. This makes the data valuable to marketers and since it’s given voluntarily, zero party data is more likely to be accurate. The downside is the data is limited - often just names and email addresses.

First Party Data is most important

With the looming demise of third-party cookies, businesses need to get comfortable relying on first party data to drive their marketing and customer experience strategies. First party data gives you insight into how consumers are interacting with your brand and can therefore be used to enrich customer profiles and build audiences. First party data is considered the most important data type since it objectively shows customer interactions with your brand.

Second Party Data is gaining importance and traction

With the deprecation of third party cookies, second party data is growing in importance as well. Second-party data is shared between companies that have a trusted partnership with one another. Second party data is more useful than third party data because it is less risky. And since it is shared between trusted partners, it’s easier to audit the lineage of the data.

Third-party data is quickly becoming second class.

Third-party data is less than ideal to meet the twin demands of stringent data privacy regulations and expectations of a highly personalized customer experience. It can be risky and error prone, and for companies that rely on it, that data will be harder to come by and work with in the future. The CCPA defines the structure and handling of third-party data to ensure that it is anonymous and never “de-aggregated,” making it more arduous and expensive to manage.

The Benefits of a First-Party Data Strategy

Switching to a first-party data strategy isn’t swapping out one set of data for another. It’s complementing your existing approach with richer and more strategically-aligned data that maps to your organization’s revenue goals. Building a first-party data strategy requires a robust yet adaptable customer data supply chain to move from collection to unification to activation.
Turning to a first-party data strategy unlocks a host of use cases that can help you unlock long-promised business goals like digital transformation.

Benefit 1

Benefit 2

Benefit 3

Scalable Customer Acquisition

Collecting first-party data is the first step— an email address or behavioral data— but getting them to become customers is another hurdle. As consumers bounce between touchpoints, companies need to be able to react across channels in real-time. By integrating all of your data sources into a vendor-neutral customer data supply chain, you’re better able to analyze and engage individual users’ actions.

Real-Time Insights and Activation

First-party data is great, but there is so much data in so many places that generating high-quality insights can be slow and laborious without the right strategy in place. With a real-time, vendor-neutral customer data supply chain, you can reduce the time-to-insights needed to generate revenue. If you can identify and engage consumers from the first moment instead of seven days later, then you’ve got a much better shot at striking while the proverbial iron is hot.

Govern Data Use According to Customer Consent

One of the inherent challenges of third-party data is managing the complexity of consent and various overlapping regulations. The same goes for first-party data, though you’ve cut out the middleman (which is very helpful). When consent is captured on your website (via those ever-present banners), the opt-ins and opt-outs must be tied to a profile and acted upon. Because there are a variety of things to opt-in or opt-out of, managing what data needs to be shut down and what data can continue to be collected gets tricky. With a Customer Data Platform linking consent data to the customer profile (which is tied to all of your data sources) the labor involved with complying with regulatory privacy legislation is drastically reduced, making data auditing and traceability scalable.

How Tealium Helps You Wrangle All of Your Data

We Work With all your Data Sources - In Real-Time

Client-side (tag-based) and server-side (API-based) data collection in a single platform for richer customer data

True real-time (we are talking milliseconds) collection, standardization and delivery

With Tealium’s flexible architecture you can mitigate risk and reliance on third-party data by building a first-party data foundation

Data Accuracy and Quality

Filter and monitor event data streams in real time

Augment and monitor data quality as data flows into the system
Configurable deterministic identity resolution

1,300+ Turnkey Integrations

End-to-end customer data collection and activation

Marketer-friendly, no-code integration workflow

1300+ integration marketplace including deep server-side integrations with the world’s largest media partners like Facebook

Privacy and Security

Governance & Automation - Tealium’s data collection technologies collect the consumer datasets alongside their privacy
preferences, in real time, on any type of devices.

Consent Management - Easily collect and enforce privacy preferences with Tealium’s built-in consent and privacy manager or integrations with your preferred consent management platform.

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