The Age of Second-Party Data is Here (And Here are Three Reasons Why it Matters)
ownerIQ CMO, Steve Ustaris, shows how in 2017, second-party data will become a mainstream marketing concept that will serve as table stakes for brands and retailers looking to better understand and reach their customers. Second-party data is about to have its moment for these 3 reasons:
In 2017, second-party data will become a mainstream marketing concept that will serve as table stakes for brands and retailers looking to better understand and reach their customers.
There are few reasons why second-party data is about to have its moment. This shift in thinking has come about as both brands and retailers continue to recognize the value of their own data – and the added value created by sharing their data with select business partners. The combined data allows them to gain deeper insights to who their customers are, their buying habits and how best to speak to them.
A new study conducted by Forrester Consulting on behalf of ownerIQ, “The Era of Second-Party Data is Here,” found that more retailers, consumer electronics, and durable goods companies are placing an increasing level of importance on data partnerships to fuel more effective marketing. In fact, eighty-five percent of retailers and brands will integrate second party data from trusted partners into their marketing strategies over the next 12 months.
There are a confluence of circumstances that have brought about this shift towards brands using more second-party data and establishing data partnerships. Here are three reasons why 2017 will usher in the new era of second-party data.
Data quality questions will drive second-party data adoption
Third-party data, which has long been a staple of digital marketing, is losing much of its luster because of the lack of transparency and the fact that it’s broadly available to competitors. Currently, marketers rely on second and third-party data equally. Both types of data are used for about the same percentage for programmatic ad campaigns. But this mix is in the process of changing dramatically. Indeed, 35 percent of marketers surveyed cited the lack of transparency of third-party data as a major factor in adopting a second-party data strategy. Indeed, marketers reported that their increase in second party data use will be at the expense of third-party data.
Durable goods companies will drive the second-party trend
Durable goods companies are also a big driver of the second-party trend for a few reasons. Currently, while nearly half of the durable goods companies surveyed have a second-party data strategy, the practice will be pervasive within the next three to five years. And particularly for those durable goods firms that lack direct channels, second-party data will play a critical role at reaching audiences at scale.
Partnerships will play an increasing role in the marketing mix
Brokering second-party data partnerships for brands and retailers has become easier a bit easier as second-party data brokers and marketplaces – including Adobe’s – have become more commonplace. Our research found that 33 percent of respondents with a second-party data strategy will expect their agency to assist them in structuring these data partnerships in the future. Working with partners can be a challenge and marketers who work with partners directly on second-party data deals reported a number of challenges including data security, data transparency, and audience duplication. Our research found that marketers will look to their data management platform providers (DMPs), agencies, and independent third-party providers for future data sharing deals.
As brands and retailers continue to recognize the value of their own data, the Forrester study found that a growing number of companies are placing an increasing level of importance on data sharing to fuel more effective marketing. Beyond the growing use of second-party data in general, the Forrester study also found that second-party data use will increase as a percent of total programmatic advertising campaigns.
This article originally appeared on MarTech Advisor, you can access it here.