Data Quality

Second-party data: the complete primer

Last week, we covered the ins and outs of first-party data. Now, we continue our deep-dive into consumer data with a look at second-party data.

What is second-party data?

Second-party data (a.k.a. partner data) is information companies acquire through a partnership with another company that provides access to their first-party data.

Examples of second party data:

  • Data acquired through ad services like Google or Bing
  • Co-registration campaigns such as contests or sweepstakes
  • Co-op data pools created by a partnership between a group of companies

Why should brands collect second-party data?

Reliable – Second-party data is collected directly by your partner, so the origins are completely transparent. You know where the data came from, when it was collected, and how/if it was verified.

Scalable – First-party data on its own may not be enough to power all of your marketing programs. In a recent Forrester survey, 27% of participants said they use second-party data due to a lack of scalability of their own first-party data.1

Minimal effort to collect – Second-party data has many of the benefits of first-party data with the added operational advantage of not having to collect it yourself.

How do marketers collect second-party data?

Brands may collect second-party data directly from the company that owns it. In this case, there’s no middleman, so brands must find partners who are willing to exchange data for mutual benefit.

Both brands should agree how data will be shared and ensure they have the same approach to data privacy. In addition, the brands can explore technology solutions that help to protect consumer data while allowing them to exchange data efficiently.

In the case of co-op data sources, a group of companies agree to pool their first-party data to create a collective data source that allows brands to benefit from other companies’ data. Some data co-ops require members to contribute their own first-party data to participate. For example, Data Axle’s donor cooperative allows nonprofits to access insights into gift-giving behaviors to other charities when they share their own data. Other co-ops like do not require brands to provide their first-party data but instead enable companies to acquire transactional data through a list rental.

What can you do with second-party data?

Grow your audience

Marketers can increase their reach by using second-party data to find new audiences who are interested in your services.

Brand example:
Dunkin’ Donuts partnered with navigation app, Waze to target hungry consumers while they are on the go. The partnership allows Waze users to place a Dunkin’ Donuts order directly in the app with the “order ahead” feature and then pick up their order in the store. To make the feature even more fun, Dunkin’ Donuts recruited NFL player Rob Gronkowski to be the voice that guides travelers to the closest Dunkin’ Donuts location once they have placed their order.

Reach niche audiences

Companies who need to reach niche audiences can seek out data partners with customers in that niche, allowing the brand to build out their data set for an audience they might not have in their customer list.

Brand example:
Walmart partnered with Buzzfeed to reach a niche audience through Buzzfeed’s Tasty. The publication and online network for food and drink recipes drove Tasty audience members to Walmart’s ecommerce site where they offered exclusive Tasty kitchen products for cooking enthusiasts. The partnership allowed Walmart to leverage an existing pool of highly relevant content and videos for their target audience while saving them the time and investment of producing it on their own.

Learn more about your customers

Gaining greater insights into customer behaviors and preferences was the No. 1 driver of second-party data partnerships, cited by 69% of respondents in a Forrester survey.2 For the insurance industry, the benefits can be two-fold: Second-party data can improve the customer experience AND improve risk assessment. The growing adoption of connected devices provides a huge opportunity for insurance brands.

Brand example:
Progressive partnered with Zubie, a connected car service, to give Zubie customers the option of sharing their driver data with Progressive in order to earn a discount on auto insurance through Progressive’s Snapshot® program, which rewards safe drivers with lower premiums.3

Identify opportunities for co-branded campaigns and events

Savvy marketers can establish partnerships that allow them to co-market with brands that have complementary audiences.

Brand example:
Ally Bank partnered with media company, XO Group, to target consumers in key lifestage moments. XO Group created 21 content pieces on behalf of Ally Bank, which were delivered across the media network’s publications, The Bump, The Nest and The Knot and covered financial advice for having a baby, buying a home, and getting married. The campaign established Ally Bank as a financial partner for XO Group’s readers and provided a key connection point for the bank to reach a millennial audience – diving consumers towards additional content, and product information on Ally Bank’s website in the process.

Natasia Langfelder
Content Marketing Manager

As Content Marketing Manager, Natasia is responsible for helping strategize, produce and execute Data Axle's content. With a passion for writing and an enthusiasm for data management and technology, Natasia creates content that is designed to deliver nuggets of wisdom to help brands and individuals elevate their data governance policies. A native New Yorker, when Natasia is not at work she can be found enjoying New York’s food scene, at one of NYC’s many museums, or at one of the city’s many parks with her two teacup yorkies.