Larisa Bedgood
Larisa Bedgood 17 June 2016

A Marketer’s Guide to Using Data

Data is one of the most important assets in the marketing mix. Data-driven marketing delivers results in terms of customer loyalty, customer engagement and market growth.

 According to a report by Forbes Insights and Turn, Data Driven and Digitally Savvy: The Rise of the New Marketing Organization, “Organizations that are ‘leaders’ in data-driven marketing report far higher levels of customer engagement and market growth than their ‘laggard’ counterparts. In fact, leaders are three times more likely than laggards to say they have achieved competitive advantage in customer engagement/loyalty (74% vs. 24%) and almost three times more likely to have increased revenues (55% vs. 20%).”

The Three Types of Data

You may have heard the terms 1st party, 2nd part and 3rd party data. If you aren’t entirely familiar with what each type of data entails, here’s a brief overview.

  1. 1st Party Data
    This is data you have captured based on the actions someone makes when interacting with your business. For example, this may be data collected when a user fills out a form on your website (i.e. name, address, phone number); it could be purchases and other transactions, both offline and online, that  your customers make (i.e. what types of products or services they purchased from you, when they purchase, how often they purchase); or it could be data gathered from users interacting with your website (i.e. how they arrived at your site, what pages they went to, how long they spent on those pages). Many 1st party data elements can be collected through the numerous interactions your customers and prospects are having with your brand.
  2. 2nd Party Data
    This data term is still relatively new, and refers to another company’s 1st party data that is collected and sold or exchanged to you. Another way to think of this is as data that users aren’t giving you directly, but that you’re obtaining through a direct relationship with another entity. This data is generally unique to you, but it is not strictly “yours” in the sense that you did not collect it from users directly. One example might be a hotel chain working with an airline to mutually benefit from each other’s data sets.  Or an apparel retailer and a sportswear brand might exchange data to enhance their co-op advertising programs through better targeting and personalization.
  3. 3rd Party Data
    3rd party is external data available for purchase by data providers who source and aggregate the data into applicable sets that can be applied to your 1st party data bases. This data is integral to deploying targeted marketing campaigns, because they provide hundreds of data elements that no consumer would fill out in a single form. With only a few 1st party data elements, 3rd party data sets can be appended to correct and fill in missing elements such as email addresses, phone numbers, lifestyles, demographics, purchase indicators and more to strengthen your customer insights.

Best Uses of Each Data Type

Econsultancy and Signal conducted research, asking marketers to rate how they used 1stparty, 2nd party, and 3rd party data. When marketers were asked to compare different levels of data and their effect on desired outcomes, first-party data ranked highest across the board. It was most popular for gaining insight into customers, cited by 74% of respondents. More than six in 10 respondents also said it was the easiest to justify using, drove the highest increase in customer value and the highest campaign lift among data sources.

Marketing Data Uses


According to a report by eMarketer, “January 2015 study by Forrester Consulting, commissioned by Adroit Digital, found that while first-party data had to be accompanied by second- and third-party information, it was still the most important source—cited by 87% of US digital marketers and customer insights professionals when asked about their attitudes toward the use of data at their companies.”

Marketing Data Uses


According to the research:

  • 40% strong agree that they would increase the use of 1st party data
  • 1st party data sources would be most important to respondents’ strategy moving forward, with transaction history (87%), customer information (80%) and behavioral data (74%) cited as the most important data types.

1st party data may reign supreme, but it takes all 3 types for the best marketing. 

Combining Data with 3rd Party Data Sets

With the wealth of data available today, marketers are increasingly turning to 3rd party providers for a more robust, in-depth view of the consumers they are selling to. A report from Royal Mail Data Services and DataIQ highlighted that companies lose an average of 20.7% of their customers each year, making 3rd party data critical in helping companies gain a better understand of who their customers really are, what they really want, and why they really want it – insights that are difficult to obtain by 1st or 2nd party data alone.

Marketers have traditionally gravitated toward 3rd party data sets as a way to improve customer acquisition. However, with today’s consumers demanding more personalized and relevant communications at the time of their choosing and the channels they prefer, marketers are using these 3rd party data sets to also boost customer retention and improve customer experiences with more relevant and targeted communications. For example, a company may know certain details about a consumer, but learning of something new about them through a third-party data provider, such as age, income, lifestyle, occupation, and so on, allows marketers to find new opportunities for upsell, cross-sell, or a way to bolster the customer relationship.

A Look at Third Party Data Sets

Consumer Demographics
Data providers aggregate these data sets in different ways and some are better than others. Be sure to look for a provider that uses multiple sources of data including public records, phone directories, U.S. Census data, consumer surveys and other proprietary sources.

Consumer Demographics Provider

Example of the types of consumer data selects that can be appended to your database include:

  • Date of Birth
  • Home Ownership
  • Mail Order Buyer Purchase Date
  • Occupation
  • Gender
  • Estimated Income
  • Age
  • Telephone Number
  • Credit Card
  • Hobbies
  • Language Spoken
  • Purchase Behavior
  • Lifestyle Interests
  • Presence of Children
  • Investments

Business Firmographics
For B2B marketers, any number of data selects can be appended to enhance your lead generation efforts. Samples of data selects may include SIC Code, Number of Employees Headquarters/Branch, Annual Sales Volume, Ethnicity Code, Woman-Owned Business, and Fortune Rank.

On average, every 30 minutes 120 business addresses change, 75 phone numbers change, 20 CEOs leave their jobs, and 30 new businesses are formed. (Source: D&B The Sales and Marketing Institute)

Because data is constantly changing and appending data ensures that your database has the most up-to-date information available.

Email Append & Validation
Many 3rd party vendors offer email addresses as part of their business or consumer databases. Unfortunately, many of these email addresses are collected without going through any type of validation process. Because of legal restrictions and CAN-SPAM laws, look for a vendor that utilizes a rigorous validation process. This data should only be compiled from third-party opt-in data and should include a process to identify addresses known to be associated with spam traps, invalid emails and domains, role accounts, complainers, know hard bounces, and more.

Additionally, if you’ve collected customer email addresses without additional important contact information, a vendor can help by providing reverse email append services.

Phone & Reverse Phone Append
A 3rd party vendor can also append and correct contact details such as phone numbers. Telephone marketing and outreach is a highly effective channel for turning opportunities into business through appointment setting, seminar booking, follow-ups, market research, customer reactivation, collections, lead generation, and more.

Although phone enhancement services vary across vendors, a 3rd party vendor may provide services such as:

  • Phone Appending – These may be compiled consumer and business telephone numbers or telco-sourced directory assistance, residential and business telephone numbers, including newly connected numbers.
  • Phone Verification – Verification of your existing residential and business telephone numbers.
  • Reverse Phone Match– Reverse phone append services provide name and address data for telephone numbers.

Poor data quality or missing data elements are often cited as an obstacle to obtaining a single customer view, which is why it pays to combine 1st party data with 3rd party data sources. By understanding the differences between types of data, the advantages of how each type can be used, and how data can be combined to generate really rich profiles of your customers and prospects, you can power your marketing initiatives with the right insights to make them exponentially more successful.

To learn more about how to implement a data-driven marketing strategy across channels, download our eBook: The Ultimate Data-Driven Marketing Guide to Success.

Original Article

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