What do you think is the most important thing for your business?

Is it having enough money? Great team?

Yes, all of these count. But one major thing that will particularly take your business to the next level is ‘Data.’

Nowadays, everything is hyperconnected, so brands don’t have to go above and beyond to collect data. Marketers can obtain different types of customer data from online channels. It means giving a hyper-targeted customer experience, which drives conversions.

But you might need to ask yourself, is your company properly utilizing data?

Are you combining the right strategies to achieve your business goals?

Most often, brands just collect data without thinking much about it. However, the truth is it’s much deeper than just gathering consumer data.

What does that mean?

There are three types of data, i.e., first, second, and third-party data. Each one of these has a significant purpose. Let’s discuss it in more detail so you can find the best strategy that aligns with your business.

Keep reading.

What Is First-Party Data?

First Party Data refers to information collected directly from individuals or users by a company or organization. Simply put all the consumer data that’s collected from online or offline sources. It can be from a company’s mobile applications, CRM, social media platforms, etc.

The information included in first-party data includes location, visited websites, and customer interactions.

The best part about first-party data is that it can be collected for free. Because the company owns the data and technically has the consent of all customers, What does that mean?

It means the company can use it accordingly. Since GDPR is gaining much prominence, it’s important to abide by its regulations. Furthermore, you can easily make various customer segment with the help of a Data Management Platform.


  • Full Control: Complete control over collection method, storage, and utilization.
  • Trust and Transparency: Builds trust through transparent data practices.
  • Customization: Enables personalized marketing and targeted communication.
  • High Accuracy: Directly collected from customers, ensuring reliability.


  • Limited Scope: Restricted to interactions with existing customers.
  • Scaling Challenges: These may pose challenges when expanding into new markets.

How Can You Use First-Party Data?

With first-party data, you can improve your visitors’ current experience.

How’s that possible?

It’s because of personalization and sending the messages they expect. You can gather all the data of users and divide them categorically into various groups. You can analyze your web traffic and understand what your ideal customers like the most.

These data type cookies comply with all GDPR rules and regulations. It’s transparent, and you’re collecting the data after their consent.

What Is Second-Party Data?

Second-party data involves information shared between two parties or organizations. There’s a major difference between first-party data and second-party data.

In first-party data, all the data is collected directly from users. However, second-party data is obtained through partnerships, collaborations, or agreements with another entity. In this arrangement, one organization shares its data with a trusted partner.

With the help of second-party data, marketers gain access to high-quality information about their consumers. It can be either a small or a large group with similar interests.

Remember that second-party data is usually someone else’s data. So technically, it’s first-party data of another company or organization discussing the potential customer touch points.


  • Additional Insights: Gains insights into new and broad audiences through trusted partnerships.
  • Shared Expertise: Accesses diverse knowledge and expertise from collaborating partners.
  • Cost Sharing: Distributes data-related costs through collaborative efforts.
  • Diversification: Enables diversification by using the data pools of partners.


  • Dependency on Partners: Dependency on partner reliability and data quality.
  • Negotiation Challenges: Complex negotiations for clear data-sharing agreements.

How Can You Use Second Party Data?

You can use this data to create huge data sets. However, if the data is small, that doesn’t mean it’s low quality. Second-party data sets are often considered highly valuable.

Why is that so?

It’s because usually you know that business partner. It means you’re aware of the data you’ll collect. You can integrate second-party data easily with existing first-party data. This integration provides a holistic view of the audience or market.

It is utilized to make creative and interactive campaigns. Hence, it opens new opportunities to deliver highly personalized campaigns to the customer base.

What Is Third-Party Data?

This data is collected and aggregated by an entity that is not the original collector or user of that data. Third-party data is often acquired from various external sources, such as data brokers, social media platforms, public records, or other businesses.

It is different pieces of information that are available online. However, these are not random. Instead, they are relevant to your target audience. It includes the interests of your audience and their purchase history.

Suppose you’re running an ad campaign to sell a brand-new car. However, you don’t have data.

In this case, third-party data helps you. You can target audience groups and show them relevant ads.

A company purchases this data from data providers. However, before choosing a provider, you should know some details.

What are those details?

It includes the strategy they use to collect data. Moreover, ensure that data is relevant to your business goals.


  • Diverse Data: Provides a wide range of information. It includes interests, online behavior, and demographics. It gives companies a competitive advantage. 
  • Cost-Efficiency: Cost-effective compared to extensive in-house data collection efforts.
  • Market Expansion: It facilitates entry into new markets by providing insights into varied audience segments.


  • Privacy Risks: Increased privacy risks due to aggregated data. Thus raising ethical concerns.
  • Accuracy Concerns: Quality may vary, posing potential inaccuracies from external sources.

How Can You Use Third-Party Data?

You can run effective digital campaigns with third-party data. The target audience is users with the same habits and preferences as your ideal audience. However, they have never visited your website. It is most often implemented in programmatic campaigns.

With this knowledge, you can run hyper-targeted and personalized ad campaigns. Attract new customers to your business and send customized messages to them.

With all these activities, you can boost your online presence. It’ll eventually increase your sales.

First-Party Data Vs. Second Party Data Vs. Third-Party Data

Consumer data is not limited to text only. It is available in different shapes, sizes, and forms. Here’s a summary of three primary data types you should remember.

AspectFirst Party DataSecond Party DataThird Party Data
SourceDirectly collected from user direct interactionsShared by a trusted partner or collaboratorObtained from external sources, not directly collected by the business
Accuracy & ReliabilityHigh accuracy, directly from usersVariable and depends on the reliability of the partnerVariable and may vary based on the credibility of the third-party data provider
Ownership & ControlFull control and ownership by the companyShared control involves collaborationLimited control and ownership due to external sourcing
CostInitial setup costs for data collectionMay involve negotiated costs with partnersIt can be expensive due to external acquisition, ongoing costs for updates
AccessibilityOwned and readily accessible by the companyShared access with partnersBroad accessibility obtained from external providers
Privacy IssuesTransparent privacy policies are requiredConcerns about shared data and potential misusePrivacy concerns related to external sourcing and data aggregation
Popular Use CasesPersonalized experiences and marketing, CRM, insightsCollaborative CRM, insights from partnersBroad targeting, market trends, and insights

Which Data Is Suitable For Your Business?

Now that you know these data types, you might be wondering which approach is most suitable for your business.

Is it first-party data?

Second Party?

Third party?

Remember, the need for data collection varies for organizations. You should consider your marketing objectives tech stack and find the reason behind data collection. However, now, more marketers are approaching first-party data.

Because there are a high number of data privacy regulations, companies use a fresh approach instead of collecting data from other sources.

But here’s something you must know.

Combining first-party data with second and third-party data gives you a 360-degree customer view.

Practical Example Of First, Second & Third Party Data

Let’s understand how you can utilize each data type according to your business needs.

Suppose you’re running a successful menswear online store. You have a huge database of all your clients’ information. Not only this, but you also have a detailed analysis of every individual social profile. How did you collect it?

Through the website, connect it with your CRM. This data is highly trustworthy and, most often, free. That’s your first-party data.

However, let’s assume you want to include watches as well for men in your brand. But you lack the data that’ll help you get a comprehensive understanding of the male target audience who loves watches. What should you do?

You should look for someone who has all the data and is willing to share it. That’s the utilization of second-party data.

Lastly, you want a full package of consumer data categorically divided according to gender. That’s when you should opt for third-party data.

It will tell you what kind of things your customer finds interesting. Moreover, their customer journey, location, and want they specifically want to purchase.

Based on these aspects, you can consider a strategy that will yield exceptional results.

Final Thoughts

You should ensure that your company is abiding by all the ethical practices. The interplay between first, second, and third-party data is dynamic. You must follow it strategically to ensure you’re meeting your business goals.

Businesses must balance the benefits of data-driven insights with user privacy. In a nutshell, first-party data is considered the most reliable piece of information. The major reason for that is because it comes from your authentic sources. In contrast, second and third-party data are not considered accurate. However, by implementing these ideas collectively, you can expect tremendous results.

All the data should be compliant with GDPR. Following these regulations is important for every organization. It saves you from troubles and legal issues that might arise.