Audience Data 101: Types of Audience Data & How to Use Them

Audience Data 101: Types of Audience Data & How to Use Them

In today’s vast omnichannel landscape, marketers are so awash in audience data that it can be overwhelming. But rather than struggle against the rising tide, marketers need to analyze the right kind of data at the right time. There are several types of audience data available to brands, and different business situations will call for one of these data types, or some combination of them. When you recognize which kind of data needs to be leveraged and when, you are better equipped to make informed and confident marketing decisions at various stages throughout the customer journey. To get there, we first need to look at the four main types of audience data to see how each can provide distinct types of insights to achieve an organization’s goals, while being mindful of their drawbacks.  

I’m all yours: first-party data

First-party data represents the total sum of customer data your company collects from its own sources, both online and offline, and are the kinds that marketers are most familiar with, including site cookies, CRM data, mobile app analytics, registration data, point of sale records, etc. First-party data is unique to your brand because you collect it directly from your customers and, for this reason, it is one of the most valuable data sets to develop marketing campaign strategies.
Accurate, relevant, and reliable, first-party data is a perpetual font of useful information and insights into existing customer behaviors.
It is, however, not without its downsides. Limited to an individual’s actions across sites and apps, your dataset will be restricted to the net behaviors and figures of your audience, and your audience only. A marketing campaign that is only built around first-party data often means scaling issues, as you’ll only reach old customers, rather than targeting potential new ones. So while its value is without question and lays the foundation for your brand, first party data can’t be the only kind of audience data to build and run marketing campaigns.   

Widening the circle: second-party data

Collected by another company as their own first-party data – and then sold to your brand – second-party data adds more depth and scale to your own first-party collection efforts, making it extremely powerful audience data. In the same way you learn more about your existing customers’ interests, preferences, and behaviors from your own data, second-party data does the same for potential customers, letting you know who is likely to be interested in your brand.
This widens the circle of your target audience and sets the stage for you to begin developing your own relationships with them.
But while you’re able glean additional audience insights that were invisible at the level of first-party data, the downside of second-party data is the potential for data privacy, ownership, and usage expense issues, in addition to the challenges of integrating second-party data into your already established dataset.  

Fifty shades of third-party data

Third-party data is accumulated from various sources of original data, and then packaged and sold by an aggregator. So while not the originator of the data, aggregators can still supply marketers with valuable information, often in the form of registration details such as names, email addresses, postal codes, phone numbers, social media handles, purchase histories, and site browsing activities.
When a brand is armed with third-party data, it once again widens its circle to grow its targeted audience, creating new segments for more effective targeting and retargeting.
Third-party data, however, has an image problem, often perceived as being of lower quality than other types of audience data, and for good reasons. Pulling for profit, aggregators have no direct relationship with individual customers, and so questions remain about its accuracy and reliability. Not just that, but because of its potentially shady origins, you run the risk that the third-party data was obtained through data breaches, which could besmirch your brand reputation and catch the attention of data privacy regulators. Finally, third-party data is a commodity for sale to all comers, so it is anything but unique; and because your competitors can easily purchase the same data as you, the effectiveness of your marketing campaigns will be severely undermined.  

Friends with benefits: zero-party data

Zero-party data is the dataset that consumers consent to provide, intentionally and proactively, because they trust your brand.
When you directly ask your customers for the exact data you want, such as their needs, preferences, and intentions, the zero-party data you collect allows you to build direct relationships with consumers, immediately.
Not only does zero-party data showcase your transparency and willingness to protect their privacy, but it is also a powerful way to build strategic campaigns, leveraging an intimacy with customers to personalize offerings using data points like preference data, purchase intentions, or personal context. In this way, it is a value-based exchange, but an exchange nonetheless and not necessarily unconditional. Customers still want something in return for their data: that you will use the data – while keeping it secure – to create a digital customer experience that meets their needs. Consensual and highly useful in personalized marketing, more and more brands are opting for zero-party data over the other types of audience data.  

Building real relationships

We are long past the point where a company can effectively scale their revenue without the use of audience data. It is now an indispensable part of strategy, growth and profitability, and so the difference-maker is not if marketers use data, but how marketers use different types of data in novel and strategic ways depending on individual use cases. Each type of audience data comes with its own benefits and disadvantages that should be carefully considered before embarking on any large-scale collection or campaign efforts. And, going forward, marketers would do well to heed how well-managed and controlled zero-party data, when supplemented by first-party datasets, can guarantee access to accurate and up-to-date information about their target audience, all in a secure and transparent way that helps build lifelong relationships.