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21 February 2021

What Is First Party Data, and Why Should You Use It?

Data is the most valuable resource any business owner can use. Creating a solid first-party data strategy is like finding gold in terms of your marketing #shinebrightlikedata. So what is the difference between first, second, and third-party data, anyway? We’ll get to that, hang tight.

With data, you’re able to serve your customers in a more personal way and reach customers with highly targeted ads. Your marketing strategy becomes concrete and impactful when you base it around data. 

But are you tapping into your business’s full data marketing potential? Do you know which types of data you are using (or should be using)? 

In today’s blog post, you’ll learn the following about data marketing: 

  • What is first-party data and what are its benefits? 
  • First party data vs third party data vs second party data
  • Why you need to take advantage of first party data marketing for your business

Let’s dive right in! 


The Three Types of Data

Although many people don’t realize it, there are three main types of data. Understanding the types and classifications of data helps you build a precise, accurate targeting strategy and market more effectively. 

So here’s the simple explanation we promised. The main difference between first, second, and third party data is quality and reach. We’ll go over each of the three data types below, and then dive deeper into the best one to use in your business. 

What Is First Party Data?

First up, we need to discuss what first party data is. First party data is the data that you collect yourself about your customers or audience—you own and manage this data. 

First-party data comes from your own website or app, purchases, feedback, point-of-sale, and other information given with user consent provided. This type of data is based on a direct, trustworthy relationship between a business and a consumer, so it’s the most powerful type of data there is. 

When you own first party data, you can create specific segments and profiles based on your unique customer data. It’s usually considered more valuable and relevant because it is so specific and allows you to develop a high quality first party data strategy in your marketing. 

You should know, though, that first party data is limited by its reach—you get a really clear picture of one specific audience, but may not have the scale to let you draw conclusions and patterns to pinpoint future audiences. 

What Is Second Party Data? 

Second party data is basically when you buy someone else’s first party data directly from them, and then use that data in your own marketing. You are able to overcome those scale limitations associated with first party data, expanding your reach and potentially boosting the effectiveness of your campaigns. 


This type of data only really works out when the two businesses have a high level of trust and have no competition or conflicts of interest. Plus, a disadvantage of this type of data is that you cannot control the quality of data when it is collected by someone else. 

What Is Third Party Data? 

Third party data is compiled from a bunch of different sources, and is usually made up of rich behavioral and/or demographic information. Typically, this data is collected by an entity that doesn’t have a direct relationship with the consumers. 


One of the main differences in first-party data vs third party data is that while first-party data is collected based on current, relevant information, third party data is often inferred, meaning it is based on past behaviors instead of information provided by the user themselves. 


Third party data has the potential for much higher risk, but also much lower quality. Since it’s not created from a direct business-consumer relationship, it may be less reliable and less personal. Plus, your competitors may end up with the same data since it comes from a third-party entity. 

How to Create a Strong First-Party Data Strategy

Creating a first-party data strategy means focusing on a compliant, personalized, insightful experience for consumers and businesses. You can deliver your current customers highly personalized, consistent experiences. All of the data is gathered with immediate, direct consent through your website, so you’ll be compliant with the GDPR and CCPA. 

First, analyze your web traffic and create audiences to represent visitors looking for specific products or topics so that you can create personalized messages—this makes marketing so much more effective! 

Make sure to include the proper consent forms on your website so that you can gather this important data without stress. 

Finally, gain valuable insights about your customers by creating a full view of your customers with multi-channel data sources. You can set up surveys, apps, and even games to understand what they like and dislike, want and need, and even where they like to spend their time online or offline. 

One tip for creating an effective first-party data strategy is to supplement your first-party data and fill in the gaps with third-party data. Wherever you notice limitations in reach, you can add in third party data—just don’t rely on it exclusively.  

If you’re looking for more effective ways to reach your ideal clients and utilize the unique first-party data you collect, Exact Data can take your reach to an entirely new level. Give us a call at 877.440.3282 if you’re ready to get started or have any questions about how we can upgrade your digital marketing experience with our reliable and targeted data.