Third party data is one of the most useful tools for digital marketers. It enables marketers to learn about their consumers and provide a customized experience for each individual. The importance of third party data is growing when it comes to customer acquisition for a number of reasons, including:
1) First party data, or data collected by the business directly from consumers, is helpful but certainly not enough. First party data can tell us some things about consumers and avoids the issues of browsers removing support for cookies, and can be supplemental to third party data - however, it cannot replace it, as it doesn't have the scale to achieve the level of personalization and targeting that third party data does. It is not as comprehensive as third party data, as first party data is often spread across different channels and vendors.
2) Data is becoming harder to collect, as consumers are becoming more wary of their privacy and less willing to share data about themselves. According to a State of Data report, "more than a third of audience data budgets in 2019 went to demographic, firmographic, and attitudinal data, indicating that marketers are looking to address those gaps in their own data."
3) Data can become outdated quickly. Studies show that B2B data becomes outdated up to 70% per year, as people move locations, change jobs, or get new email addresses. It is important for businesses to maintain their databases to ensure that their data is up to date, whether manually or through third party database cleansing services.
4) Third party data offers breadth and depth. It enables businesses to cast a wider net for campaigns, and lets them develop a deeper understanding of who the target customer is and how to best appeal to them. Marketers can use third party data to segment their customers and target different segments in a customized way, creating a better experience for customers, which leads to higher acquisition by the businesses.
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