The second-party data opportunity
Organisations today have a one dimensional understanding of their customers. They understand their direct relationships, but know little else about their preferences or lifestyle. How can an organisation validate whether they share customers with a potential strategic partner? Or measure if a particular ad campaign was effective for reaching their best customers?
New customer data platforms make it possible for marketers and analysts to combine these inter-enterprise insights in a trusted and transparent way, without losing control of the data. This enables organisations to securely collaborate over data and make more informed and data-driven decisions.
First, second or third party data?
First party data is the data collected by a company about their customers, whereas second party data is another company’s first party data. The combination of the two creates unique insights that help organisations to produce more detailed and accurate audience profiles.
Conversely, third party data is usually acquired from a data broker and is widely available, so competitors are likely using the same external information and are making the same assumptions. As Forrester notes, “using ill-gotten or badly aggregated data can be riskier than sharing data carefully and securely with select trusted business partners”.
By tapping into second party data sources, organisations can double the impact of their data by more accurately targeting customers, validating the benefits of a partner relationship or understanding the knowledge of joint users. Gaining collaborative business intelligence is the premise behind data cooperatives, where companies pool their data into a centralised location where is can be integrated and analysed together.
According to a study by Criteo and Forbes, 60% of brands and retailers are currently participating as a part of a data cooperative and 72% of marketers cited “increased revenue” as a key benefit from the expanded customer understanding. These partnerships help to level the playing field, as they enable SMEs to have the same level of customer understanding as the larger and more diversified corporations.
Retain data ownership
Pooling data to combine insight is more complex under the GDPR, as if a customer withdraws consent, then it is the responsibility of the company that collected the data to ensure all other parties have also deleted it. Decentralised customer data platforms can provide the same end result as data cooperatives but, crucially, without the loss of data ownership and the privacy, security and commercial risks.
By using decentralised customer data platforms to securely partner with second party data sources, companies are able to “see the bigger picture” to further understand their audience and tailor campaigns based on detailed and accurate customer personas. They can learn more about demands to answer strategic questions, drive revenue and direct the future of the organisation.
Get in touch to find out how we can help you activate your first-party data!