Why Everyone Is Talking Second-Party Data
Last week, ownerIQ hosted a panel discussion at the 2016 MITX Data Summit, from Boston’s Innovation and Design Center. The summit invited top minds in the industry to share proven best practices for business success and explored the latest data strategies in the ever-changing digital marketing landscape.
The Q’s session, “Why Everyone is Talking Second-Party Data,” was moderated by Susan Bidel, Senior Analyst at Forrester Research, and provided attendees with the opportunity to hear from five digital marketing pros: Steve Ustaris, CMO at ownerIQ, Karen Kokiko, Senior Product Marketing Manager at Oracle, JR Crosby, Director, Strategy and Investment at Xasis, Matt Gorman, Director of eCommerce and Strategy at Canon, and Marie Knight Joshi, Business Development, Digital Marketing at Adobe. First digging into the ins and outs of just how second-party data actually works, the panel then examined the state of second-party marketplaces across various tech sectors by presenting real-world examples of how data sharing brings value and innovation to different business models.
At its most basic, 2nd party data is the transparent access to a trusted and relevant partner’s first-party data. This data set is more scalable than first-party data, and more relevant than third-party data. Beyond that, second-party data has many other important applications. For instance, as Marie Knight Josh of Adobe pointed out, second-party data also makes it possible to monetize your first-party data asset. What’s more, it’s highly customizable and can be privately available. To help illustrate, JR Crosby of Xaris points to Facebook as the king of 2nd party data.
ownerIQ’s Steve Ustaris stressed that this no longer elusive data source has already gone mainstream within relationships between two entities with an existing and symbiotic relationship, such as retailers and brands. Beyond these instances, Steve asserts that the adoption of the concept will depend on the particulars of the association between the parties at hand. In other words, organizations with an adjacent relationship, organizations that share an agency, and organizations that share a platform are all common examples of other 2nd party data use cases.
JR shared that two advertisers came to them from the airline and hotel industry in hopes of sharing their data – problem was, they didn’t know how. Second-party is exactly how to achieve this.
Matt Gorman of Canon expressed that because mobile cameras changed their business, reaching millennials who were not as familiar with their brand became considerably more challenging. Through the ability of accessing the audiences of key retailers and those browsing for travel accessories, second-party data has helped greatly in reaching the right audience and expanding Canon’s brand message.
But how easy is it to implement a second-party data strategy? And what are the concerns around doing so?
While true, second-party data is highly scalable, the panel agreed that there are certain factors that could work to limit its scalability, or even break a deal if not properly considered, including compensation, reporting on value on both sides of a 2nd party data campaign, and specific terms and conditions around using one another’s data. Likewise, platform integrations (technical aspects as well strategy and communication) must be well understood and planned for prior to any undertaking.
Additionally, privacy issues are likely to resurface in the era of “data sharing.” How much data does one really want to share? If going with multiple platforms, how does one decide where the data lives? Panelists believe that in an ideal world, the data will live in the buyer’s platform. Generally speaking, whoever is executing or buying media is the one with the responsibility to report back how it’s performing.
Wrapping up the discussion, Steve Ustaris explains why second-party data is today’s marketing and advertising data of choice: “Second-party data targets truly in-market shoppers. In the third-party data world, accuracy takes a back seat. With second-party data, you choose your data. It’s about complete data transparency.”
The panel acknowledged that in reality 2nd party data isn’t so new. What is new, however, is the technology used to facilitate it. We now know that we can execute on these relationships very quickly – we can look at the value of our data and decide how deep we want to go in sharing it.
The only limitation is if you can only think of what’s in front of you…
Learn more about second-party data here.