Second-Party Data: the (Data) Deets You Need to Know
Second-party data is – and will increasingly be – a valuable marketing asset for retailers and durable goods companies alike. Remind me, what’s second-party data again?
Here’s a quick definition: 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.
Indeed, according to a September 2016 commissioned study conducted by Forrester Consulting on behalf of ownerIQ, 96% of those surveyed with a second-party data strategy today consider it valuable or very valuable to their overall marketing strategy, and a whopping 98% are likely or very likely to participate in second-party data partnerships in the future.
Advertisers and marketers are turning to second-party data sharing to enrich customer profiles, enable identification of target audiences, and improve their ability to personalize communications and offers. And while the survey revealed a commonality between retail and durable goods professionals in regard to the top initiatives supported by second-party data, retailers were more likely to leverage second-party data for audience segmentation and personalization efforts, while durable goods organizations were more apt to use second-party to reach audiences at scale. As one retailer said:
“As you leverage personalization at many, many levels, depending on the partnerships and second party, you can really drill down and get sophisticated, and — dare I say — clued in on what you’re doing there.” – Digital marketing director at a retail company
Second-party data will also play an increasing role in programmatic advertising strategies. Advertisers and marketers are currently tapping into first-party data for 41% of their programmatic campaigns on average, utilizing second-party (24%) and third-party data (22%) relatively equally.
The professionals surveyed in the study predict that third-party data will take a back seat to second-party data in five years, estimating that the former will account for just 19% of campaigns compared with 29% for second-party data. And while retailers will hold relatively steady in their use of second-party data as a percentage of campaigns, second-party data will play a more significant role at durable goods organizations, with ad and marketing pros at those companies predicting an increase from 23% to 30% of programmatic campaigns in five years. Particularly for those durable goods firms that lack direct channels, second-party data will play a critical role. A marketing leader at a durable goods company said:
“Because we no longer have a direct eCommerce channel . . . we’re very heavily involved with our retail partners’ channels now, which means that we’ve also started pursuing a lot of data sharing activity. We’ve been developing [that] over the past couple of years and more intensely over the past year.” — Senior manager, marketing & CRM at a durable goods company.
Interested in learning more about the ins and outs of second-party data? Download this complimentary study, The Era of Second-Party Data is Here, to uncover must-know second-party data strategies, challenges, and benefits.
Included in this post are some key takeaways from a September 2016 commissioned study conducted by Forrester Consulting on behalf of ownerIQ.