Third-Party Data is gathered by a specific company or organization that is archived and then shared with marketers and advertisers. It allows for more consumer data that can give detailed insight and be used to for marketing purposes. Third-Party Data is provided to marketers by an external data provider. This partner typically creates audience profiles informed by external data sources and then charges a CPM for the use of the data. Third-party data can come from a variety of places, including surveys/panels, online opt-in tracking, cookie-based tracking, registration data, public records, and offline transaction data such as loyalty cards. Third-Party data is provided by different data brands such as Experian, Exelate, Dun & Bradstreet, and many others. There are instances in which using branded third-party data is useful and cases in which it is not.
It is recommended to use branded data when targeting small or niche audiences. For example, branded data would be useful when targeting doctors in particular fields. This is because this subset of people is made up of specific attributes or behaviors. To maintain volume, it is best used for middle- to upper-funnel initiatives since the more precisely a marketer targets, the less inventory will be available. These segments can be custom designed by the advertiser, or pre-existing segments can be used.
Third-party data can also be useful in helping advertisers find new prospects. For example, a hotel could target its ads to users who have not yet been to its site, but who have searched for flights in the area. Overall using third party data in behavioral targeting strategies in conjunction with other targeting strategies, such as contextual or retargeting tactics, can help to lower the average CPM.
In comparison if you are looking to target broad audiences, using branded third party data might not be the best use of the budget. For example, a sandwich shop would not need to leverage branded third party data as they would look to target potential customers near their store. It does not matter what a person’s occupation or annual income is for them to be a sandwich-lover. In this case, using geo-targeting to target those located within a certain radius would be just as effective.
Determining which segments to use let alone which type of data and whether third-party partners should be brought in or not can seem like a daunting task, but there are a few ways marketers can ensure they are making thoughtful evaluations and are on the path to the correct decision. Using third-party data to buy audience segments allows marketers to extend their programmatic dollars by spending them more efficiently. When using branded third party data in the right context, it can be very useful to lower a digital advertising campaign’s average CPM and help to deliver the right message to a more narrow audience. By understanding the differences between the data types, and the appropriate times to bring in third-party data providers, marketers have the ability to make their campaigns exponentially more successful.