Is big data too big? In a way, yes. Forrester recently reported that only 12% of data collected by brands is actually used! The report highlights the fact that what businesses are seeing is not necessarily a need for more data, but for better quality data.
Data in itself has become a commodity—it’s available to everyone and because of the amount of providers in the space, it’s accessible at a relatively low cost. In order to use metrics to create competitive advantage, brands now need to look for ways to complement their first-party data with quality external sources (second and third-party).
Here’s a quick breakdown of the three types of data streams:
- First-party: Data that a business collects first-hand, usually through cookies. This can include metrics from website analytics platforms, CRM systems, and custom-built collection analysis tools
- Second-party: Data that a trusted business partner collects on your behalf. For example, if you use a third-party ecommerce or registration platform for your website, the data they report exclusively to you is second-party data.
- Third-party: Data purchased from an aggregator, which can include demographic, behavioral and contextual information about your target audience. This information may be useful, but won’t be exclusive, as your competitors could purchase the same or similar datasets.
We know that first-party is the most valuable data for understanding your audience, but it doesn’t tell the whole story. Seventy percent of a customer’s interactions with a brand happen off-domain. In order to create an actionable data strategy, it’s important not just to access all three data streams, but to be able to analyze them in a holistic, big picture way. Better quality data means greater relevancy, which translates to a better customer experience and reduced marketing waste.
Learn more about the different kinds of data, and how they’re used by marketers, in “Data as a Competitive Advantage” – a recent study from Winterberry Group and Interactive Advertising Bureau (IAB), sponsored by AddThis.