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What is Second-Party Data?

Today’s businesses can use audience data to fuel their marketing campaigns, personalize their content and acquire new customers. Ultimately, it can help them boost their bottom lines and grow as a company.

Different situations, however, call for different kinds of data. Businesses can choose between three main types of audience data — first-party, second-party and third-party. While each type of data has its benefits, second-party combines many of the best aspects of first-party and third-party data to make for an exceptionally valuable resource. Especially when combined with high-quality data collaboration tools, second-party data can help you uncover new insights about your first-party data, better understand your customers behaviors and preferences, and ultimately grow your business and meet your goals. Here are the topics we will cover in this article.


What Is Second-Party Data?

What is Second Party Data?

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So, what exactly is the definition of the term second-party data? Second-party data is essentially another organization’s first-party data, as they gather it directly from their audience. It may include data from activity on websites, apps and social media, in-store purchase history, survey responses and more.To further clarify what second-party data is, it’s helpful to define the other types of data.

  • First-party data is data about your audience that you collect directly from them. It’s your data.
  • Third-party data is data that an aggregator collects from various sources and sells as a package. It can be beneficial to use when marketers are looking to increase scale for their campaigns. 

In order to use second-party data, you need to have direct interaction with the organization that collected the data. This differs from the process for purchasing third-party data, in which you work with a data aggregator. In a second-party data collaboration, both parties connect, whether it be a brand or a media owner or brand and brand, and they agree on terms and then exchange the data via a data collaboration tool. This arrangement gives you more flexibility in the transaction, helps ensure that you get high-quality data and enables you to build relationships with other companies. Data collaboration tools offered within Lotame’s Spherical platform can help you onboard, collaborate, analyze and activate your data with the second-party data of partners of your choice. 

Second party data is essentially another organization's first-party data as they gather it directly from their audiences.

The Power of Second-Party Data

With second-party data, you get many of the benefits of first-party data but also the ability to gain insights you couldn’t get from your own data. When you engage in a second-party data collaboration, you maintain control over the data you share, and the relationship you make with the data collaboration partner. You can go directly to the organization that has the data you need and work out an agreement to obtain just the data that’s most relevant to your goals.

Because you know exactly where the data is coming from, you can be confident in its quality and its relevance to your audience. There’s a lot of transparency in second-party data collaborations and you have the opportunity to be more flexible in your agreements. This flexibility enables you to create unique datasets that meet your needs perfectly.

As you’re interacting directly with second-party data partners, you can also build relationships that can benefit both organizations for years to come. If you need more data in the future, you may be able to come back to that organization for more data collaboration insights and opportunities. 

Second-Party Data Example for Brands

second-party data collaboration

Let’s say, for example, that you run a national online shoe store, and you collect data about your customers, including information about their purchase history, interests and demographics. With your customers’ permission, you’ve used this information to inform your marketing campaigns and improve your sales. It’s served you well, but you realize there’s a deeper layer to this first-party data, and you can uncover additional insights through second-party data collaboration. 


Data collaboration with another brand or media owner is an excellent way to maintain control over your data, while uncovering further insights with second-party data. To find another partner to collaborate with, you could seek out other local businesses who may be interested in your data. A clothing company may be interested because they could advertise items that go with the shoes customers buy. Just be sure not to choose a clothing store that also sells shoes, as that would make them a competitor.

Second-Party Data Example for Media Owners

Now let’s take a look at second-party data from the other side. Let’s say you’re a publisher or media owner who’s collecting data on the visitors to your website. You could gather data about the visitors who read sports content and offer to collaborate with a sporting goods store. The store may be able to use the information they uncover from the collaboration to improve their audience targeting. 

As a media owner, the second-party data insights you gather from the sporting goods store help you understand your own audience better. This allows you to show the value of your audiences matched with your inventory – a win-win for monetization across the board. 

How Is Second-Party Data Used?

Need more of a reason to get started with second-party data? Here are five ways companies can use it.

1. Inform Marketing Campaigns

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Second-party data can help you to improve the targeting of your marketing campaigns, enhancing their performance. You can use second-party data to improve your ad campaigns in much the same way you would use first-party data. First-party data helps you learn more about your own audience’s demographics, interests, preferences and behaviors. Second-party data does the same for potential customers you want to target because they’re likely to be interested in your products or content.

You can be confident that the second-party data you are using is high-quality because you have transparency into the source. This means it is likely more accurate, precise and relevant to your needs. These qualities help you to better target your ads to the right people.

2. Increase Data Scale

First-party data is extremely valuable but often lacks scale since it only includes your customer data. This is especially true if you run a small business. To achieve scale with your campaigns, you might need to add data from other sources. Second-party data is an excellent way to increase the reach of your campaign without sacrificing any quality.

3. Reach New Audiences

If you want to expand into a new market and find new customers, second-party data can be beneficial. Your first-party data is limited to your existing customers so, for example, if you run a company that exclusively sells skateboarding gear, all your first-party data will be about people who are interested in skateboarding. If you want to expand into surfing gear, you’ll need some data about customers who surf. To get this data, you could reach out to a surfing publication or publication that has data on surfing enthusiasts. 

4. Predict Customer Behaviors

Second-party data can also help improve your ability to predict the behavior of your audience. Being able to predict behaviors enables you to anticipate customers’ needs, reach out to customers at the right times, proactively meet their needs and boost your sales. For instance, if a user searches for homes for rent in their area, there’s a good chance they’re planning on moving soon. Using this information, advertisers may show them ads for apartment complexes, moving services and other relevant products.

Second-party data allows you to add to the information you already have through your first-party data to get a more robust and accurate pool of data through which to make your predictions. 

Check out this real life example of how real-estate company, RE/MAX, and media company Advance Local used second-party data collaboration to deepen their understanding of prospects behaviors, interests, and personas. Watch the webinar. 

4 Benefits of Second-Party Data

Benefits of Second-Party Data Collaboration

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Second-party data can help you grow your business in numerous ways. Some of the leading benefits of this type of data include:

1. High-Quality and Precise Data

With second-party data, you can have confidence that the data you use is high-quality, provided you are collaborating with a reliable organization. You can also seek out highly precise data segments from specific companies.

Second-party data is another company’s first-party data, so it’s likely recent and well-maintained. It’s often already organized and in a usable form. In a second-party data collaboration, you have the opportunity to ask questions and ensure that the data meets your needs before you collaborate.

2. Uncover Hidden Insights in First-Party Data

Second-party data serves as a powerful tool for enhancing the value of an organization’s first-party data. By incorporating insights from trusted partners, digital marketers can enhance their understanding of customer profiles, adding layers of intelligence to their data. This process allows for a more complete and dynamic view of the customer journey, facilitating personalized marketing approaches that resonate more deeply with target audiences.

3. Complete Data Transparency

Working directly with the company means that you get exceptional transparency in the collaboration. When working with second-party data, you have more control over the type of data involved and the terms of the collaboration. 

4. A Direct Relationship Between Data Collaborators

Second-party data collaboration requires both parties to interact with each other directly, which can lead to a relationship forming between the two companies. This relationship can benefit both companies for years to come. After a data collaboration, you may be able to go back to that same company later to share and exchange more second-party data. Because you already established this relationship, you can acquire your data more quickly in the future. Over time, the relationship may also lead to better deals on data.

How to Get Started with Second-Party Data Collaborations

At Lotame, we offer all the tools you need for safe and secure second-party data collaborations. Our end-to-end data collaboration platform, Spherical helps media owners and digital marketers share and collaborate with second-party data in smarter, faster and easier ways. 

Want to unlock the power of second-party data? Fill out the form below to contact us to learn more about our second-party data solutions or request a demo today.