Data (3P, 2P, 1P)

Any conversation about Marketing today has to include a discussion on data and at the highest level the different types. Data can typically fall into 3 buckets: 1st party, 2nd party, and 3rd third party (You’ll often see these abbreviated to 1P, 2P & 3P). If you’re just starting to work with data it’s important that you have an understanding of these different types, their differences and how they can be used. Before we get into that though let’s look at how this data is captured, created and derived...

Broadly speaking data can be explicitly or implicitly derived.  Data derived explicitly is typically the result of a questionnaire (How old are you, what’s your phone number, select your interests from this list etc) This information is considered reliable but it’s not flawless in all situations, a consumer may misstate their interests for example but a home address entered for product delivery is generally very reliable. Data derived implicitly is inferred, based on a consumer’s actions. For example, you may infer that a consumer is a parent because they have visited the children’s clothing section of your website or you may categorize them as a car owner because they requested a quote for auto insurance. While both of these could be true they aren’t guaranteed, I could be an uncle/ aunt buying for a newborn, I could be researching insurance costs for a car I don’t yet own…

First-party

First-party data is YOUR data, data that you have collected directly from your audience or consumers. This can include data from behaviors, actions or interests demonstrated across your website(s); data you have in your CRM; subscription data; social data; or cross-platform data from mobile web or apps. The limiting factor here is of course your reach/ scale. Unless you are Google or Facebook your purview on the world is very narrow. You know how the data is collected, under what conditions and the rules that are applied to it. There’s full transparency – you own or have complete control of the consumer touch points. While you don’t have to pay any vendor for this data there is an underlying maintenance cost associated with the technology and resources responsible for the collection process.

Third-party

Third party data is data you have acquired from a third party and can again be explicit or implicit. In the instance of third party data however you are wholly dependent on the third party to determine how the data is collected and the rules applied to it. You have no control of their practices, process, governance or cleansing procedures.

With third party data there is the opportunity to achieve significant scale through some very large data aggregators. When purchasing third party data, there are many factors that buyers should be aware of, including whether the company uses modeling or registration-based data. Implicit/ modelled and explicit/ registration derived demographic information are two very different things, and which one will work best for a particular campaign will depends on your goals.

Second-party

Second-party data is somebody else’s first party data. Unlike third party data it isn’t widely available and therefore hasn’t been commoditized. It’s typically acquired (purchased or traded) through trusted partners who are willing to share their customer data (and vice versa). These trusted partners typically have an existing relationship like retailers and manufacturers who often share marketing assets. There’s already a trust and mutual understanding of each other’s business. Sharing data and audiences makes sense to achieve the shared goal of driving sales via the retailer.

Measure the journey, not just the silo...

If you can’t measure it you can’t optimize it” is a phrase we’ve all heard and maybe you think it’s overused but we still need to adhere to it. Measurement is the cornerstone in so much of what we as marketers do today. It removes subjective decision making and enables us to compare performance: where we’ve been, where we are and where we’re going. It provides us with a framework to measure actions and ideas, what works, what doesn’t.

In this digital world we’re fortunate that so many of the tools we use across paid, owned and earned media channels are able to provide us with data: impressions, viewability, engagement, purchase information, the list goes on. It’s both a blessing and a curse as the amount of data being generated becomes overwhelming.

The proliferation of tools in the advertising and marketing ecosystem is a reaction to today's consumer who accesses multiple channels (social networks, apps etc) on average owns 4 devices [1] and is moving between them up to 27x per hour [2] and buying online and offline.

When we count up the number of tools brands are using to ensure they are able to address today's consumer we see that on average each brand is using 36 different systems and vendors to gather data for their marketing efforts with some using more than 100[3]. Looked at in isolation data coming from these disparate systems may appear to be multiple actions with no definitive conclusion and this is where the marriage of adtech and martech happens.

As marketers we need to unite this disparate data together to come to the right conclusions. We also need to ensure we’re doing this at the granular event level or the 10,000 ft view provided by aggregate level data is going to hide the detail… In this way when we talk about improving the customer experience and the customer journey we have the data to measure it and can take a truly informed, holistic approach.

Having a robust data strategy across touch points will enable optimization, reduce waste, provide a framework for vendor assessments and future proof your marketing efforts.

[1] Nielson The US Digital Consumer Report 2014, [2] NPD, March 2013, [3] Forbes Insights Customers for life September 2014 

A DMP Primer

A DMP or Data Management Platform typically allows you to:

  • Collect information about visitors to your online properties (websites and apps).
  • Provide a medium to acquire data from second and third parties
  • Leverage your data in audience modeling scenarios
  • Provide a basis for measurement and analysis
  • Facilitate media exposure to specific audiences
  • Control access to your data

A brand or advertisers first exposure to a DMP is often via their media agency who use the technology to facilitate media exposure to specific audiences. The agency will configure the DMP to collect data from the clients (first party) online properties and CRM tools etc and supplement it with data from third parties to extend reach and scale. Using these techniques, the media agency is able to optimize media buying and ensure that the right message is going out to the right audiences.

As the custodian of the DMP the agency is also typically the custodian of the data but that has been changing. Brands, advertisers and publishers have been licensing DMPs (from vendors like Lotame, BlueKai, Adobe and Krux) as they recognize the strategic value in owning the data that resides in the DMP after all agencies can come and go but the data within a DMP is a strategic asset that should be retained.

As this gradual transition of DMP ownership and maintenance moves from agencies to their client’s adoption isn’t always universal. Ideally data should be gathered by a DMP from all customer touch points whether through paid, owned or earned media channels. Unfortunately, this remains a challenge for multiple reasons but principally because it requires alignment across multiple stakeholders both internally and externally.

Why should I ensure a DMP captures data across all customer touch points?

All too often we see data silos appearing across a company as they deploy point solutions for email, web analytics, CRM etc. and no connective tissue between these silos. Without a way to join the dots between these different touch points it’s very challenging or impossible to see the consumer journey, understand, model or exploit it.

Control your data

Deploying your own DMP allows you to better control access to your data not only to the users (internal and external) accessing it on a daily basis but also to 3rd party data providers who may have, unbeknownst to you, been aggregating your data and selling it. This later scenario is frightening for many marketers but sometimes an unfortunate consequence of granting far reaching rights to your media agency without understanding the implications.

When you bring a DMP in house you will of course have to put process, governance and standards in place but with the right approach you don’t have to boil the ocean all at once and can establish a very pragmatic roadmap to adoption.

Keep your data clean and flowing

You will need to monitor the ongoing data gathering process to ensure that the information being collected is kept clean and error free. Website or app updates and email changes etc. can impede or corrupt data flow so ensure that the governance processes you establish take these things into account.

The Cross Device Challenge

Today we’re all multi-screen consumers, and often, we’re using multiple screens at the same time. Marketers are struggling to at brands can't confine themselves to these outdated distinctions? Frankly, it is because technology has not kept up with reality.

From the perspective of a B2C marketer, the data being gathered by analytics tools on owned-and-operated sites suggests that most marketing campaign value comes from desktops, where — it is believed — the majority of conversions are happening.  However, the evidence also shows that a lot of consumer research takes place on mobile devices.  Unfortunately, most data can’t tie that mobile research to conversions on other devices.  As a result, there’s no credit given where it’s due.

So although marketers are turning to data to guide the strategic decision-making process, there’s a black hole when it comes to consumers’ cross-device journeys.

In contrast, here’s what a unified approach looks like, and the solutions it offers:

Customer Understanding

Each time a consumer engages with a brand on a device is an opportunity to learn more about them. Smartphone browsing may spike between 7:30 A.M. and 8:30 A.M., while tablet activity may be focused on, say, shopping for women’s shoes and behavior on a laptop might indicate that the user lives in New York. By unifying all this information, marketers can create more relevant, engaging experiences for their potential customers.  This level of understanding builds customer loyalty and can be fed into all facets of the marketing ecosystem to drive media targeting, optimization, A/B testing, MVT testing and an overall enhanced customer experience.

Accurate Analytics

For customer acquisition pros, the real value of exposure can be better understood once there is visibility across an entire plan and devices.  A 360-degree view of all “ingredients” in a successful customer acquisition campaign provides a huge leap forward from the old silo-ed perspective.  Furthermore, marketers responsible for managing the customer experience on owned-and-operated properties can understand each device’s role in the customer journey and where conversions actually take place.

Continuity

When marketers are able to provide consumers with messaging that evolves across devices, it results in better online experiences.  Unified, sequential messages are more personalized, leading to higher brand loyalty and increased revenue.  For example, the customer shopping for shoes on a tablet can receive a call-to-action message when she transitions to her laptop.

As you can see, there are many different ways that cross-device technology can unify the customer experience and improve marketing results. And it’s exciting to know that these obstacles are finally going the way of the rotary phone.