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<Img
img="/uploads/1st_2nd_i_3rd_party_data_0a6be87456.png"
alt="First, Second and Third-Party Data"
/>

Data is the backbone of marketing. [**54% of marketers**](https://www.invespcro.com/blog/data-driven-marketing/) claim that success of advertising campaigns depends on data. Lack of necessary information about target audience results in loss of money. Businesses that personalize communication with their customers using data have ROI 5-8 times higher. That's why companies are switching to a [**data-driven approach**](data-driven-marketing).
 
Information obtained from several channels gives a more detailed picture of your audience, helps to personalize and scale your business and makes it possible to predict user behavior. There are several different types of data used for different tasks. By the way of obtaining and uniqueness, there are 1st, 2nd and 3rd party data. In this article, we will take a closer look at these types of data, learn how to use them in marketing and how to collect information about customers without violating confidentiality.

## What is 1st Party Data 

**1st party data** is data that companies receive directly from customers through registrations, [**pixels**](ak-pixel), cookies, CRM and other services. There are no restrictions on collecting information when it comes to this type of data. The only thing you need is user permission. Customers can refuse to provide data, although leaving a name, phone number or email address is usually not a problem.

<Img
img="/uploads/1st_party_data_89096760bb.png"
alt="First party data"
/>
 
**1st party data that companies collect:**

- user behavior and time spent on websites and in apps;
- results of email and SMS newsletters (open rate, clicks);
- contact details: email address, phone number;
- information about customer orders;
- feedback;
- demographic data;
- user survey results;
- behavior in social networks;
- interests.
 
**Advantages of first-party data:** it's free of charge and reliable, you have full ownership of it because your competitors don't have access to company information. 

**Disadvantage of first-party data:** it's not enough to scale your business.
 
<Note>
Data collection is a priority for companies. 
</Note>

**Why do businesses need first-party data:**

- It helps to learn about the needs of customers in detail and offer them products that they will definitely purchase. 
- It [**personalizes offers and content**](/features/personalization) for customers. 
- It helps to launch advertising and retargeting campaigns. 
- It makes it possible to predict customer behavior. 
 
*Example. A customer purchased T-shirts of a certain brand in an online store. Six months later they visited the website and added the same ones to the cart. So we can conclude that a purchase is possible in the future. The company «anticipates» actions and pushes the customer: it offers them special conditions, a discount and reminds them about the product in a newsletter.*

## What is 2nd Party Data

**2nd party data** is the 1st party data collected by another company from its sources. Second-party data is bought from partners or third-party companies with a relevant audience. 

<Img
img="/uploads/2nd_party_data_34d23b8721.png"
alt="Second party data"
/>
 
**Why do businesses need 2nd party data:**

- It helps to scale your business. It's difficult to broaden your audience only with 1st party data. If you don't have 2nd party data, you can make a mistake and take wrong actions when working with a new audience. With second-party data, it's easier to launch the first advertising campaigns.
 
*Example. Let's imagine a company that specializes on women's clothing for fitness. The company made a decision to diversify the range and start selling men's clothing. The business doesn't have data on the new audience. But they have partners who are engaged in sports nutrition and work with their potential customers. Information obtained from this company is 2nd party data.*

- It serves as an addition to first-party data. With 2nd party data, you will see problems in the sales funnel.
- It helps to track trends. Your conclusions will lack objectivity if you have only first-party data. 
- It [**strengthens partnership**](/partners). When you exchange data, you increase trust between businesses.
- It brings unexpected ideas to creative companies.
 
*Example. A travel agency buys 2nd party data from an online store that sells suitcases and travel bags. According to the online store, 30% of their customers purchase dog carriers for airline travels. So the agency makes a decision to launch a new product and advertising campaign for travelers with pets.*
 
**Disadvantage of 2nd party data:** you can't be sure that the data your company receives is 100% accurate and relevant. You don't know how and when this information was collected. If you buy 2nd party data, you should trust the seller and their data collection methods. 

## What is 3rd Party Data

**3rd party data** is data from multiple sources collected by aggregators. This includes 1st party data that were bought by outside sources and/or data collected through surveys, studies, interviews and so on. Examples of aggregators: Nielsen, eXelate, Acxiom, OnAudience, BlueKai, Oracle Data Cloud, Peer39, Google services, payment systems, etc. Social networks are also data aggregators that sell companies ready-made audiences for advertising. Third-party data sellers collect information and [**segment it into categories**](how-to-build-an-email-database) for searching by industry, by interests and so on. 

<Img
img="/uploads/3rd_party_data_63efa184d4.png"
alt="Third party data"
/>

**Third-party data includes:**

- gender data;
- interests;
- income level;
- geographic data;
- professions.
 
**How to use 3rd party data in marketing:**

- Use it to expand 1st party data, study your audience in detail and increase personalization. 
- Study and get ideas for business development. 3rd party data provides you with a larger audience reach that 1st and 2nd party data. 
- Launch targeted advertising for a potential audience. 
- Track global trends. 
 
**Advantages**: third-party data is often collected automatically, so this information is always up-to-date and can be used for a quick change of marketing strategy.

**Disadvantages**: you can't be sure of the data accuracy; the same information is available to competitors.  
 
<Note>
It's important to work with all types of data because they complement each other. 
</Note>
 
*Let's go back to the example of the company selling women's fitness clothing (see above), which decided to diversify their range and add men's sportswear. 2nd party data is the basis for the first campaign but the audience reach is not large enough. The company buys 3rd party data to supplement customer information and widen the audience.*
 
If you have all three types of data, you have a comprehensive picture of your audience. The more you know about your customer, the easier it is to reach them and sell your product faster.

## How to Collect Data

The current tendency in the world is to increase the privacy of personal information. Data collection is limited by legislation and by companies that collect data. 
 
[**GDPR**](customer-data-privacy-issues-in-digital-marketing) (General Data Protection Regulation) is a regulation that protects personal data of EU users and is valid for companies that work with EU citizens. A person can request personal data, correct and even delete it, revoke permission to its processing.
 
The Russian Federal Law on Personal Data prohibits disclosing user data to third parties without consent.
 
Google restricts cookies for 3rd party data in the Chrome browser. The company is planning to get rid of third-party cookies during 2022 to enhance user privacy. This approach is the obstacle to tracking customers’ interests and journey to conversion. It will become difficult or impossible for end-to-end analytics to find out customer journey through cross-devices. 
 
Apple restricts third-party cookies (Intelligent Tracking Prevention) for Safari browser (from 13.1). The browser restricts the collection of data from third-party services. IOS 14.5 now requests confirmation to collect information via IDFA (The Identifier for Advertisers). If the user doesn't confirm, the accuracy of data decreases. Apple offers an alternative — anonymous aggregated data. However, it won't be enough to cover all marketing needs with such information.

### Data Collection Rules

- Prioritize 1st party data, collect 2nd party data to [**build your own data system**](ways-to-address-customer-data-privacy-issues-in-digital-marketing) and be less dependent on 3rd party data.
- Notify users about data collection and ask their permission for its processing. You can't consider people whose data is collected secretly your target audience.
- Follow the legislation on user data protection and the rules of the information market.

## Conclusion

Marketing can't function properly without data. However, not all types of data are equally useful. There are 1st, 2nd and 3rd party data. First-party data is obtained directly from users. Second-party data is the 1st party data that companies buy from partners and businesses with a similar target audience. Third-party data is obtained from aggregators that buy information from companies or collect it themselves. 

1st party data is reliable and easy to collect, but not suitable for scaling your business. 2nd party data expands your audience, but it’s difficult to test its validity. 3rd party data contains a lot of information, but you can't be sure of its reliability. Third-party data is also available to competitors. 

Regulations of aggregators and state laws slow down the collection of information. Companies should monitor changes, create their own data collection and storage systems so as not to depend on third-parties.

In this article, we will learn how to use different types of data in marketing and how to collect information about customers without violating confidentiality.

1st-2nd-i-3rd-party-data.png

Data is the backbone of marketing. 54% of marketers claim that success of advertising campaigns depends on data.

What Are 1st, 2nd and 3rd Party Data and How to Collect Them

First, Second and Third-Party Data

<Img
img="/uploads/customer_profile_bd139d94c0.jpg"
alt="How to create a customer profile"
/> 

Whether selling through traditional avenues or eCommerce platforms, marketers must first understand which individuals are most likely to purchase their products and services. Creating an accurate customer profile of who, why, where, and how is the critical starting point for an enterprise to promote its brand.

Social media marketing, for example, offers a fabulous opportunity to develop a targeted presence economically. However, a company must understand where their most likely clients spend their time, how they communicate, their likes and dislikes, and problems they hope to solve.

## What is a Customer Profile?

A customer profile describes your prospective and current customers’ buying behaviors, demographics, interests, everyday activities, and pain points that influence their purchasing decisions. By creating and adjusting their consumer profiles, marketers can adapt their strategies and campaigns to focus on similar customers.

Building from your existing data, you should begin to create a clear image of the attributes and behaviors of prospective customers that will guide your future marketing strategies.

### How Does a Customer Profile Differ from a Buyer Persona?

A Buyer Persona is a generally fictionalized version of the group of buyers that you might hope to target, often developed before your products have reached the market.

On the other hand, a customer profile is a [**data-driven**](data-driven-marketing) analysis of past successful conversions, identifying the common psychographic characteristics that drove their decisions to buy. These are the customer profiling characteristics that influence how and where your product advertising and brand-building should focus.

## Advantages of an Effective Customer Profile

Your customer profile should be specific. Boiling down your profile to a demographic that targets billions of people leaves you with virtually no direction. More detailed criteria that focus on the primary target allows you to:

- Identify prospects that are most likely to convert

- Reduce marketing and acquisition costs per conversion

- Focus better on individual buyers for bot sales and continuing support

- Generate more fact-based rather than speculative decisions

- Define eCommerce and [**social media strategies**](self-marketing-how-to-promote-yourself-on-social-media) that take your message where your most likely customers are hanging out.

## Building Your Customer Profile

Accumulating sufficient data from existing customers to fine-tune a compelling customer profile is the main challenge. Here are some steps to help create a profile that works:

1. Review specific details with your Sales Team to find some common characteristics they may have noted in successful sales situations. How did those customers arrive at the point of buying your products?

2. Survey past clients. Specify common characteristics from sales data, customer reviews, and [**feedback**](how-to-use-customer-feedback-to-increase-sales). Determine distinct age groups, gender, and means of contact. Were they buying from a desktop or mobile device, for example?

3. Identify which online forums are most important for your customer base.

4. Who are your customers’ prominent [**influencers**](what-is-influencer-marketing-how-to-build-strategy)?

5. Where was the purchase originated? Hopefully, you can identify by city, state, country, and continent to identify trends.

6. Investigate your industry and competitors, seeking details about the specific places and methods where their marketing efforts are concentrated.

## What’s Next with Customer Data Profiling

With more resources than ever to develop a brand and create a lasting presence, effective enterprises know that customer data profiling is an essential tool for success. While businesses would simply purchase “broadside” advertising through TV, radio, newspapers, and magazines in the past, marketers today can create very specific content in online locations frequented by individuals who are most likely to purchase your products or services.

Companies that are not fully aware of the characteristics and habits of their most likely customers are destined to flounder as the competition moves ahead. Take the time to unearth the data and [**tools**](/en) that will help to define your customers, and create your strategy to meet the demand precisely where it exists.


By creating and adjusting customer profiles, marketers can adapt their strategies and campaigns to focus on similar customers.

customer profile.jpg

Accumulating sufficient data from existing customers to fine-tune a compelling customer profile is the main challenge. Here are some steps to help create a profile that works.

What Is an Accurate Customer Profile and How to Create It

Understanding Your Target Customer: Creating a Customer Profile

<Img
img="/uploads/blog_a3c611b32f.jpg"
alt="How to build an email database"
/>

Today, almost everyone has an email address. In 2021, there are over 4.1 billion email users and the number is expected to shoot to approximately 4.6 billion by 2025. With this trend, there’s a need for every business to have an email marketing database.

Email marketing is among the most effective digital marketing strategies with a high return on investment (ROI). This is because millennials prefer business communications via email.

But how can a business use email marketing to reach more customers and to drive sales? Find out more below.

## Benefits of email marketing

By marketing products and services via email, businesses can approach new clients and retain existing customers by encouraging repeat website visits. Here is why email marketing is beneficial to any business.

### High Conversions

According to DMA, the average ROI for email marketing is [**$42 for each $1 spent**](https://www.oberlo.com/blog/email-marketing-statistics). So if you’re launching a sale or promotion, email marketing would be an excellent marketing strategy to reach more customers and drive sales.

For instance, you can email a special offer or a discount to a prospective client. Altcraft Marketing will help you with it by automating your emails. Set up an [**automated workflow**](customer-journey-automation) and send a welcome email, birthday email, or a re-engagement email to encourage your customer activity. Also, abandoned cart emails will help sell your products and services better.

### Brand Awareness

Email marketing enables businesses to reach qualified leads directly.

Sending emails to potential customers will help keep your [**brand on top of mind**](povyshayem-uznavayemost-brend-ustanavlivayem-avatar-email-otpravitelya). What’s more, email marketing is more impactful than a social media post since it’s highly personalized and targeted.

A business can easily send tons of emails to a large number of recipients at lower costs, contrary to other marketing channels.

### Build Customer Loyalty

An email a week is enough to create [**unbreakable ties**](customer-loyalty) with your customers.

From lead-nurturing to conversion to onboarding to retention, an email will help drive customer loyalty. Businesses can easily build a strong relationship with a customer by creating and sending a [**personalized email**](dynamic-content) with customized content.

## Tips to Capture Email Addresses

For email marketing to work, a business will need to have an email database. And to capture those email addresses, you’ll need some kind of strategy.

Although you can purchase email address mailing lists, it’s essential to build it organically, and here’s how it’s done.

### Personalized CTA

There are three types of CTA’s: basic CTA, multivariate CTA, and smart CTA. Basic CTA’s are the same for everyone. Multivariate CTA’s are used to test two different CTA’s to determine the one with high conversion rates. Smart CTA’s are personalized based on individual needs and interests.

According to research, smart or personalized calls to action are 202% better than general and multivariate CTA’s.

Everyone visiting your website or blog has something specific in mind, and it would be best if they get personalized calls to action based on their needs.

When you serve your audience with content that matches their interests and needs, they are likely to subscribe to your email newsletter, thus increasing conversion rates.

### Slide-in or Pop-up

Timed pop-up ads can help you create an excellent email list. The pop-ups should be relevant to individual behaviors, interests, and needs.

After a visitor spends some considerable time on your page, they can receive a pop-up ad that is in line with the content on the page. An example of this is the exit pop-up which appears once a visitor tries to leave a page. Scroll pop-ups appear when someone scrolls the page to a certain percentage.

<Img
img="/uploads/lego_3b837fd5a4.png"
alt="Pop-up on LEGO website"
src="Pop-up on LEGO website"
/>

### Social Media Accounts

Facebook, Twitter, Instagram, and LinkedIn accounts are excellent places to reach more people and capture their email addresses. Use both your personal and business [**social media**](self-marketing-how-to-promote-yourself-on-social-media) accounts to pitch email newsletters.

Post insightful content on social media and include links to your website or landing pages containing CTA’s to email subscriptions.

## Collecting the Right Type of Data for Your Email Database

Considering 20% of customers account for 80% of sales, it’s easy to see why Customer Data Management (CDM) should be a crucial part of a business.

The end game is collecting the right type of customer data on:

- **Identity**: this information should help build a unique profile for customized communication throughout the customer journey. Examples include name, address, social media, gender, and date of birth. 
- **Descriptive**: descriptive data aims at painting a clearer picture of a customer persona. Such information includes career, family, education, and lifestyle.
- **Quantitative**: this is the information gathered throughout the customer journey from channel interactions, discovery details, and conversion-specific steps leading to purchase. Examples are social networks, online activity interactions, and outbound and [**inbound marketing communication**](inbound-marketing).
- **Qualitative**: there’s no better way to understand a customer’s choices than collecting their qualitative data as it aids in figuring out why they behave in a certain way, helping you turn them into a qualified lead. Qualitative data entails data on opinion, motivation, and attitudes.

A pain-free way of managing this is employing a [**Customer Data Platform**](/features/cdp) (CDP), a CDM system that collects and coordinates data from various sources into a central, widely accessible platform. The main benefits of CDP’s are:

- **Centralization of customer data**: whether a customer uses a phone or computer, a CDP will collect and organize all that data into a convenient Single Customer View (SCV) platform.
- **Meant for marketers**: unifies all the data into a single customer information interface and enables cross-department communication.
- **Real-time data streaming**: enabling immediate action during the customer journey, such as up-selling opportunities and personalized recommendations.

## Audience Segmentation

Databases are just the first step towards building customer relationships. However, delivering the same content to all customers is not a wise decision. Each client is special and each one is important to you. That’s why you should make sure your customer receives a message that is relevant to him at a point that makes sense in his purchase journey. This is where [**audience segmentation**](/features/personalization) comes in handy. 

You can segment based on:

- **Demographics**: age, income level, job type, and geographic location.
- **Behavior**: what people buy, how often they make a purchase, and why they buy the product.
- **Buyer’s journey progress**: where your customer is in his [**buyer’s journey**](stroim-customer-journey-map).
- **Level of engagement**: regular or infrequent customers.

Segmentation is the key to creating more tailored and personalized messages for stronger connections.

<Img
img="/uploads/personalization_tactics_1e159c03a1.jpg"
alt="What are the most effective personalization tactics used for email marketing purposes?"
/>
## Conclusion

Email marketing is a scalable and cost-effective way to reach out to more potential customers and retain those you already have. Create email databases, segment your audience and start sending personalized emails. This way you will be able to build lasting customer relationships.

Read our article to get some practical tips on how to build your email database. Learn what customer data to collect and how to segment your audience.

блог.jpg

Email marketing is among the most effective digital marketing strategies. For email marketing to work, a business will need to have an email database.

Email Marketing: How to Build a Database and Segment Your Audience

How to Build an Email Database

uzum-case.png

Reduced push notification opt-out rates, increased OR, saved working hours

bnb-bank-kejs-v-menyu.png

The open rate for automatic Viber messages is around 60%, and MAU growth for the year is +19%

All user information is systematically collected in a unified customer data platform

Distributing messages across various communication channels: email, SMS, push notifications, messengers

Promo codes, bonuses, and points for building long-term customer relationships

You can create and edit any HTML template, as well as save your own custom blocks

Personalized distribution of messages to clients through communication channels

Conducting experiments and optimizing marketing strategies

Tracking the effectiveness of marketing campaigns to make informed decisions

Connecting external systems to the platform and synchronizing data with company databases

Creating questionnaires, surveys, and feedback forms of any level of complexity

The ability to communicate with your clients anytime and anywhere

Increasing user awareness of your company's offers

Customer Data Platform

Omnichannel Marketing

Loyalty programs

HTML Email Builder

Personalized mailings

A/B/n Testing

Real-time analytics

Integration and WebHooks

Forms and Surveys

Messenger Communication

Pop-Up Windows

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