Lotame, the leading independent data management platform, today announced the launch of Lotame Syndicate, a…
At Lotame, we saw a 600 percent increase in our second-party data client portfolio in 2018, and we expect the popularity of this data source to continue increasing in 2019. Why is second-party data in such high demand? It has significant advantages related to transparency and can help you uncover valuable insights to improve your marketing and grow your audience.
In this article, we’ll look closer at these benefits and also discuss the challenges of using second-party data, how the second-party data marketplace works and more. Let’s start by explaining what second-party data means.
To get a better second-party data definition, we’ll first define another common type of data — first-party data. First-party data is information you collect directly from your audience. Examples include details customers give you when they subscribe to your email list, data you gather when users interact with you on social media, data you collect when visitors take actions on your website and other similar kinds of information.
So, what is second-party data? It’s essentially another company’s first-party data you purchase directly from the source — the company that collected it. The buyer and seller must agree on what data will be available, the price, how to access it and other terms of sale. The seller may offer particular data points, audiences or hierarchies.
Second-party data differs from another popular kind of data, third-party data, in several ways. You don’t purchase third-party data from the company that collected it. Instead, other organizations aggregate data from multiple sources and sell it on publicly available marketplaces.
To get second-party data, you can reach out to a company with which you already have a relationship, or you can seek a company that may have the data you need and attempt to start a conversation. As long as they’re not in direct competition, there’s a good chance they’ll be willing to discuss a possible exchange of data. You can use a second-party data marketplace such as Lotame Syndicate to help you find these potential sellers.
So, once you get second-party data, what do you use it for? Here are a few of the most common applications.
We’ve already touched on what makes second-party data so beneficial to advertisers, but let’s look more in depth at some of its most important benefits.
One of the most advantageous aspects of second-party data is the high level of transparency that comes with buying data directly from the source. Because you’re buying data right from the company that collected it, you can get a lot more information about it than if you bought it from a third-party data exchange. You can ask for information about how the other company gathered the data, and how best to use it. This increased clarity into the source of the data gives you full confidence it will be accurate and relevant to you.
This transparency also helps alleviate privacy concerns. With the introduction of the EU’s General Data Protection Regulation (GDPR), privacy issues regarding data have taken center stage even more so than in the past. To comply with GDPR, you need a clear view into where your data comes from and how it’s getting used. Second-party data offers this capability, so using it as opposed to less transparent data sources decreases risk. Because of this, the introduction of GDPR has contributed to the increase in second-party data’s popularity.
If you need to fill in gaps in your first-party data, you can turn to third-party or second-party data. Third-party data is excellent for adding scale to a campaign, but it’s not as precise as second-party data and typically covers a broad selection of data points. With second-party data, on the other hand, you have more control over the data you receive. You can go directly to the data sellers who have the information you need and work out a deal exclusively for what you want to purchase. If you need data for a specific niche, all you have to do is find a data seller with audience members in that niche.
When purchasing second-party data, highly specific sets of data are available. You could request, for example, data collected at a particular frequency or the data collected over a certain time. Say, for example, that you are looking to run a marketing campaign to sell luxury vehicles. You could request a dataset for people only within higher income brackets who searched for information about cars within the last six months. Precise datasets like this could allow you to run intensely targeted campaigns.
Buying second-party data requires forming relationships directly with data sellers. That means purchasing second-party data is also an opportunity to expand your network and can help you start working relationships that can benefit both companies involved. Once you’ve established a relationship with a company, it becomes easier to purchase data from them in the future if you need similar information again. Over time, these relationships can lead to better deals, quicker access to data and other benefits.
You don’t even have to start these relationships entirely on your own. Through our private second-party marketplace, Syndicate, Lotame can help you make these connections.
With Lotame Syndicate, second-party data is just as flexible as first- and third-party data. Syndicate makes it easy to export second-party data to the demand-side platform, or DSP, of your choice. We’ll get into the specifics in the section below titled “How the Second-Party Data Marketplace Works.” Syndicate also provides a potential additional revenue stream for companies that sell their data in the marketplace and makes it easy to do so.
Second-party data has a lot of benefits, but like any resource, it comes with some issues. Here are the hurdles data buyers most often cite regarding second-party data, and how to overcome them.
If you want to enjoy the benefits of using second-party data, you need to know where to buy it and how to make agreements to purchase it. Here’s how to get started.
One option for how to buy second-party data is to find a potential seller and approach them yourself via a phone call, an email or another communication channel. Some companies might advertise their willingness to sell data, but you can also contact any company and ask about the potential to purchase data. This method offers complete flexibility, since you can contact any company and propose any transaction you want. It’s easiest, though, if you already have a relationship with a potential seller. It can be challenging to know whom to approach and what kind of transactions to propose to get the data you need.
Another option for where to buy second-party data is to use Syndicate, the second-party data marketplace from Lotame. Syndicate serves as a channel through which you can quickly sell and acquire second-party data. Using a marketplace like Syndicate gives you extra assurance the data you’re getting is credible, and facilitates complete transparency while still allowing you to maintain control over the terms of your transactions. The marketplace is also self-service and automated, allowing for immediate access to the data you purchase. Lotame, meanwhile, handles the billing. We can also help you find the right data to meet your needs and connect you to sellers.
To provide enhanced flexibility, Syndicate offers two tools for accessing second-party data — Syndicate: DMP and Syndicate: Direct.
How is our solution different from our competitors’ products? Here are five key advantages of using Lotame over other second-party data marketplaces.
Want easy access to high-quality second-party data? Syndicate, our second-party data marketplace, is the perfect solution. Our data management platform and other data products can also help you take control of your data, expand your audiences and optimize your campaigns.
To learn more about buying and selling second-party data in a private marketplace, check out our guide to success with second-party data. The Lotame data team would also love to chat with you about second-party data, give you a demo or talk about the data options available to you. Contact us today to set up a time to chat or request a demo here.
Or, if you’d like more information on 2nd party data, check out our Guide to Success with 2nd party data to learn more about buying and selling second party data in a private data marketplace.