What is First-Party Data?
First of all, we have first-party data. This is data that is gathered directly from your customers or visitors through various interactions.
As companies know it’s from a valid source, this data has a higher level of trust. It tends to be more accurate than other types of data.
Different types of first-party data includes:
Transaction data, like purchase history and order details
Customer feedback from surveys and reviews
Data related to customer interactions that are stored and managed in CRMs
Opens and clicks of emails
Consumption of content like blog articles
interactions from web analytics, user registrations, and online behaviour
First-party data is now more important than it’s ever been in the past - and using it correctly lets you provide more personalised experiences for your customers, across your website as well as your advertising and marketing efforts.
What Is Second Party Data?
Next, we have second-party data - this refers to another company’s first-party data that is shared with your company. Both parties exchange the data with mutual consent, through partnerships or collaborations.
As second-party data consists of another company’s first-party data, it is considered to be of higher quality and accuracy than third-party data from external sources.
An example of second-party data sharing could be the following: a hotel booking website and flight booking site share data. This will enable the hotel site to target customers flying to a given destination with remarketing adverts, highlighting accommodation in that area. In return, the flight company will be able to target people looking at hotels in specific regions with ads promoting flights to get them there.
What Is Third-Party Data?
This is information collected and sold by a party other than the end user, or the company that initially collected the data. Third-party data is often bought from external sources like data brokers or organisations that collect and sell information, and can include a wide range of demographic and behavioural data about individuals.
Data from third parties can differ in quality and accuracy and also raises privacy concerns. It’s important to stick to data protection laws when acquiring, storing, and using it. People also may not be aware that third parties are collecting their data.
Third-party data is often huge sets of aggregated data from ad networks or social media listening tools. Examples include:
Demographic data - age, gender, income
Interest data - gathered from browsing activity
Social media data - a list of people who have interacted with or ‘liked’ a brand or topic on a social media platform
Location data - based on IP addresses
This kind of data is still useful but is clearly less trustworthy than first-party. Its categories are broader, but still enable you to tailor campaigns to suit the data points on the list and get your messaging in front of a reasonably well-defined audience.
What Is Zero-Party Data?
And finally, we have zero-party data. This refers to information intentionally shared by individuals with a company. The difference between this and first-party data, is that first-party data is collected through actions like website interactions, whereas zero-party data is willingly volunteered, including preferences or personal information, making it highly valuable.
The defining feature of zero-party data is that the customer actively chooses to provide the information, not passively having it collected through tracking or website activity.
It provides high quality insights because customers directly express their preferences, so zero-party data is considered highly valuable for understanding customer needs and tailoring marketing efforts.
Some examples of zero-party data include:
Selecting preferred communication channels (email, SMS), product categories, or desired frequency of updates on a website.
Asking customers about their satisfaction with a product, reasons for purchase, and areas for improvement
A "Find your perfect product" quiz on a beauty website where users answer questions about their skin type and desired coverage
Providing feedback on a recent customer service interaction or website experience
Participating in a poll on a brand's social media page about their favorite flavor or product feature
When signing up for an account, providing additional information like birthday, interests, or dietary restrictions
Sharing details about purchasing habits or preferred products to join a loyalty program
Summary: Different Types of Data
First-Party Data
Data gathered directly from your customers or visitors through various interactions. As it’s 100% from a valid source, this data has a higher level of trust. It tends to be more accurate than other types of data.
Second-Party Data
This refers to another company’s first-party data that is shared with your company. Both parties exchange the data with mutual consent, through partnerships or collaborations.
As it consists of another company’s first-party data, it is considered to be of higher quality and accuracy than third-party data from external sources.
Third-Party Data
Third-party data is often bought from external sources like data brokers or organisations that collect and sell information, and can include a wide range of demographic and behavioural data about individuals.
Zero-Party Data
Information intentionally shared by individuals with a company. The difference between this and first-party data, is that first-party data is collected through actions like website interactions, whereas zero-party data is willingly volunteered, including preferences or personal information.
So that’s a quick overview of the four types of customer data. Remember, all of them can be used meaningfully by ecommerce companies, it’s just a case of using them in the right way to get the best results.
