The Rise of Third-Party Data: 4 Reasons Why It’s Driving Digital Marketing
With increased privacy regulations and major browsers removing support of third-party cookies, many digital marketers are trying to figure out what’s next. The upset has also led to some confusion of the impact on third-party data. While third-party cookies are a type of third-party data, they are not one and the same. It’s clear that tracking cookies are on their way out, but third-party data is still at the center of targeted marketing, and arguably more important now than ever before.
Here are four reasons the importance of third-party data is growing and why B2B marketers need third-party data to fuel acquisition campaigns.
First-party data is a good start – but it’s not enough. Recently, I’ve heard several digital marketers and strategists point to first-party data as an alternative to third-party tracking cookies. Data collected by a business directly from prospects and customers certainly avoids the issues of browsers removing support for cookies, but it doesn’t have the scale to reach the level of targeting and personalization today’s B2B buyers expect. Even enterprise-level businesses with extensive customer lists have a difficult time getting enough comprehensive data, as it’s often spread throughout various channels or different vendors within a business process.
According to The State of Data, a recent study from the Winterberry Group, marketers and other users invested $11.9 billion in third-party audience data in 2019. When it comes to data, quality is still more important than quantity, but there is a minimum threshold that marketers need. First-party customer data is a great foundation for your marketing, but it falls short, especially in reaching the scale necessary for successful acquisition campaigns. The best way to reach that quality and quantity level is to supplement first-party data with high-quality data from a reputable provider.
Data is a valuable asset. As regulations increase and the public becomes more aware of privacy concerns, buyers become less likely to provide their personal data. And when they do provide information – often in exchange for access to relevant content – there are limits to what they’ll share. They may gladly provide their name, email address, company size or location, but leave out other details. Or they could give false information, resulting in time and money spent hunting down leads that don’t exist.
The State of Data report indicated that more than a third of audience data budgets in 2019 went to demographic, firmographic and attitudinal data, indicating that marketers are looking to address those gaps in their own data.
Even good data goes bad. It’s inevitable as people move, change jobs, or update their email address, data becomes outdated. Studies estimate that B2B data decays up to 70% per year. Audience contact data is not static; it’s a living file that needs to be regularly maintained and updated to reflect the real person it represents. Manually updating contact data is tedious at best, and unfeasible for large databases. Plus, there’s the risk of typos or introducing duplicate records. A database cleansing service can automate the process of removing, correcting and replacing inaccurate data. Third-party contact data from a reputable provider should include a data validity guarantee and be regularly cleansed. Additionally, the provider may offer the service for outside databases. The combination of fresh, high-quality data with first-party data that’s been cleansed for accuracy can ensure your campaigns are firing on all cylinders.
Third-party data offers breadth and depth. Quality third-party contact data expands marketing reach, offering a wider net to cast for campaigns. Additionally, it offers a deeper understanding of who the target customer is – and who they aren’t. Through segmentation, marketers can put their buyer personas to the test and better define their audience based on results. From there, additional contacts that best match the target can be found by acquiring additional third-party data through audience mirroring, a process of identifying new prospects who share similar traits. Keeping with the fishing analogy, it’s moving your boat to where the fish are biting.
Third-party data provides a more complete view of B2B buyers and the best way to reach them so marketers can target prospects that show the most promise of becoming customers. And with the uncertainty and economic issues many businesses are facing today, it’s even more important than ever.
This content was originally published here.
