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Jun 24
Third party data best practices

Best practices for third-party data

As we approach the enforcement date for CCPA, marketers should be refocusing on data—or, more specifically, the right data—that is used in their digital advertising campaigns.

For marketers who are lacking first-party data to fulfill their data-driven campaigns, they look to leverage third-party data. But understanding how to pick the right third-party data provider can be a mystery.

Third-party data is thriving. In fact, according to the IAB and Winterberry Group, spending on third-party data increased by 17.5 percent in 2019 to reach $19.2 billion and preliminary research indicates the spending significantly increased in 2020.

The following guide provides some best practices for using third-party data, what to look for when selecting third-party data segments, and examples of third-party data audiences.

Jump ahead:

How to choose a third-party data provider

Value of third-party data

Examples of third-party data audiences


How to choose a third-party data provider

At its core, third-party data is collected by data providers to enable marketers to launch targeted advertising campaigns and supplement their first-party data. Think of third-party data as puzzle pieces that are then aggregated and pieced together to complete an existing data set or increase the size of a target audience.

But with so many third-party data providers out there, how do you choose the right one? How do you know they are the right ones? Obviously, you are looking for a high-quality and privacy compliant third-party data provider, but how can you judge that?

Don’t worry–you’re not the only marketer that asks those questions. With the increased pressure and attention surrounding data privacy, all marketers are asking these questions as they leverage third-party data providers for their digital advertising strategies.

Here are five factors you should take into consideration when choosing a third-party data provider.

1. Source

In this connected world, everything we do generates data. With so much data available, there have growing concerns surrounding the sourcing of data. Recent privacy regulations like Europe’s GDPR and California’s CCPA and headlining court cases have marketers wondering if it is safe to use third-party data. Still, it ultimately comes down to selecting a privacy-compliant third-party data provider that is transparent about their soucing.

Understanding the source of where data come from is as important as picking a good tagline for your marketing campaign. To understand how the data provider sources their data, you’ll want to gather more information on how it is collected. Do they receive it from publicly available data sets? Or is it based on survey responses? Where did it come from? What sources are they using, or is it aggregated? What methodology have they employed? Was it modeled or validated?

In most cases, third-party data providers are not collecting the data on their own. They leverage multiple sources or individual clients to gather the information and then compile them into the data segments that can be used. Understanding the source of the data can give you a better insight into what data provider would work better for your strategies and goals.

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Looking for more information on the third-party data providers available in Choozle?
Here’s an overview of each data provider partner and their data collection methodology.

2. Scale

The next factor to consider is the scale. Scale looks at the potential reach or the amount of data available. If we look at the available third-party data segments available to target someone between the ages of 35-44, you’ll see that different data providers have vastly different potential reach.

If you are like many marketers looking for additional data to help them fulfill their campaign goals, you’ll want to have data that the scale that relates to your campaign goals.

3. Reputation

Privacy compliance goes hand-in-hand with reputation. There have been a fair amount of news stories that highlight the bad actors of third-party data providers, i.e., the Facebook and Cambridge Analytica scandal of 2018.

Just like any purchase, you’ll want to do your research and check your prospective provider’s reputation. Does your data provider have results to show? Have they worked with any comparable brands in the past? Are there any pending complaints or issues around their data practices?

4. Price

Another factor to consider when choosing a third-party data provider is their price, or what they change to use the data. Most pricing will be based on CPM price or the cost per thousand views or impressions. The CPM price is typically included in the total cost of your digital advertising campaign. Some data providers are priced at a percentage of media spend, so you can achieve significant cost-savings if you are looking to use more expensive data segments.

It is important to note that each data segment is priced differently, and prices can vary from $1.00 CPM to a little over $50.00 CPM depending on the data provider. The price should align with how broad or narrow the audience is and its available reach.

5. Quality

The quality of data matters immensely. It can be one factor that makes or breaks your campaign’s success. In a recent Ascend study, 62 percent of marketers believe that improving marketing data quality is the most crucial objective of a successful marketing data strategy.

When choosing data, many marketers have the impression that their third-party audience segment can deliver a near-perfect targeting. As it turns out, that is not always the case with some third-party data providers. Understanding where the data is coming from, how it is collected, what methodologies have been applied will provide better insight into the quality of the information you are using.

More importantly, ensure that the data is compliant. Data providers need to share how they comply with current legislation and how they’re preparing for the new law. Make sure to review privacy policies and opt-out language continuously.


Value of third-party data

Data is critical in today’s consumer landscape. As marketers look to build out their digital advertising strategy, third-party data allows for consumer-behavior based targeting.

Gain revenue-driving consumer insights: Your first-party data is limited to the interactions you have with your customers. When you add third-party data into the mix via data enrichment, you learn more about their habits, behaviors, and demographics, which can empower more informed business decisions.

Identify new potential customers: Third-party data paints a more thorough picture of your highest value customers. You can then use this information to target new lookalike audiences and audience segments that share the profile of your current customer base.

Create data-based campaigns. Remember, third-party data can go well beyond demographics or online activity. It can also include segments based on the places people have visited, what they have purchased, their interests, and what they are engaged with, and more.


Examples of third-party data audiences

Just as there are many third-party data providers, there are many use cases and examples of third-party data audiences. Here are a few third-party data best practices for audiences to get you started:

Sports fans: Leverage data segments from Datonics for users who have recently searched for sports-related terms and display your ad after they have left the search environment with search retargeting. Use data segments from ShareThis for users that have shared sports-related posts on social media or engaged with social media posts from sports teams.

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Gluten-free foodies: Leverage data segments from Datonics for users that have searched for gluten-free recipes, purchased gluten-free food on a weekly basis, or search for discounts/coupons for gluten-free products. Use data segments from Foursquare to reach users that have recently visited a gluten-free restaurant.

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Human resource professionals: Leverage data segments from Bombora to reach users that are confirmed to have the title relevant to HR and interested in benefits management, employee assistance programs, etc.

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About The Author

Megan Sullivan-Jenks is director of marketing & communications at Choozle – Easy Digital Advertising®. A self-proclaimed tinkerer, Megan's a problem solver for marketing and advertising strategies and execution. From nonprofits to consumer goods and software, she's an expert at creating online and offline marketing & communications strategies that are engaging and results-driven. Outside of the office, Megan rolls up her sleeves to enjoy all things DIY like sewing and woodworking.