When purchasing 3rd party data, thinking strategically allows you to build audiences as effectively as possible. An accurate assessment of the available first-party data, as well as knowledge of what to look for in a third-party data provider are both important factors in buying third-party data. Knowing when it is necessary to buy data as well as which data to buy is crucial. The following article provides a step-by-step guide of data buying, as well as an example of buying data to fulfill an RFP.
Is My 1st Party Data Sufficient?
Prior to purchasing data, it is logical to first determine if first-party data alone is sufficient to build the desired audience. This can be done via the following steps:
- Determine the number of impressions to be delivered for your campaign.
- Figure out the ratio of impressions to uniques (or opportunities or page views)
- Using historical data for a previously-targeted audience, compare the number of impressions which were able to be run vs. what the estimator (or actual daily activity) showed could be run. This can be done by looking at uniques, opportunities, or page views.
- Once an estimate has been reached, it is possible to determine if the size of the audience in question should be increased using 3rd-party data.
How To Choose a 3rd Party Data Provider
If the size of an audience composed solely of 1st-party data is insufficient, determine which 3rd-party data provider offers data that best compliments the audience in question by analyzing the following factors:
- How each data provider collects their data (quality/methodology)
- The price for each data provider
- The scale (amount of data available) for each data provider
Based upon the aforementioned 3 factors, rank the data providers from first to last. Begin adding 3rd-party data to the audience in question. While doing so, be sure to continually check the size of the audience to see if it is sufficient.
Additional Data Buying Tips:
- Use affinities and Lotame’s Audience Profile Reports (APRs) to find similar segments.
- Utilize similar segments that have more scale.
- Suggest those to the client – but make sure to have good rationale for why they should want to use those.
Data Buying Example
An RFP requires an audience to be built which targets mothers who are age 25-34 and like Versace. A few things can be done in this scenario:
- Create the exact audience segment (assuming there is data available on fans of Versace products) and look at an audience profile report for the interests and behaviors to scale the audience.
- Think creatively and determine that Versace is very niche and instead choose to target fans of high-end clothing or simply fans of fashion in general. Doing so creates additional options:
- Target the exact audience requested: Reach 10,000 people for a CPM of $30
- Target Women 25-34 who like high-end clothing: Reach 1M people at a price of $10 CPM
- Target all users who like high-end women’s clothing: Reach 5M people at a price of $8 CPM
- Target women 25-34 who like art or fashion as those users are at least 4 times more likely to be interested in art or fashion than the average user.
Based on this information, it is the most cost-efficient to target Women 25-34 who like art or fashion. This allows an audience of 10 million people to be reached at a CPM of $5