AdTech Gyan: WTF is Third Party Data?

Third party data, as the name implies, is data that a marketer acquires from a multitude of outside sources. Normally used to help create consumer segments for targeting ads and marketing messages, third-party data often refers to information gathered from internet interactions. Data-management firms aggregate information from sites across the web that show interests in particular topics based on behavior, and that third-party data is used to categorize people into groups such as travelers or sports enthusiasts. But third-party data isn’t just digital. It can represent real-world interactions such as purchase transactions or mobile phone locations.

Over the past few weeks, we’ve covered first party publisher data, first party advertiser data and second party data, but there is still yet another key type of data — third party data.

What are the benefits?

Third party data provides a depth and breadth of information that can’t be matched by an individual entity. While first party data is usually considered the most valuable since it is free and highly accurate, it simply can’t match the range and scale of third party data. Additionally, these third party data providers distill the data down to targetable audience segments, removing analysis that the advertiser may have needed to perform otherwise.

What’s this data actually used for then?
Typically, when marketers talk about first-party and third-party data, they’re referring to information they can use to target or tailor ads or offers. This often comes in the form of cookie information they can use to target and track specific users. This data is often “plugged in” to a demand-side platform to help it decide which ad impressions it should buy from exchanges.

So which data is better; first or third party?
First-party data is typically considered more powerful than third-party data because it tends to be more accurate, and also because it’s free. Any advertiser can collect data from its properties and consumers provided it has the right mechanisms in place. By contrast, third-party data is usually licensed or purchased.

Where does “second-party” data fit into all this?
Second-party data is a newer concept, but it basically refers to a situation in which one “first-party” gives data to another. For example, a large advertiser such as P&G might strike a deal with a large publisher to gain access to its audience information. As far as P&G is concerned, that information isn’t “first-party” data because it didn’t collect it itself. But it isn’t third-party data, either, which is typically gleaned from a variety of places.

Which companies collect and sell third-party data then?
Lots. Some examples include Acxiom, Bluekai, Lotame, Datalogix, Experian, TruSignal, Alliant, IXI and comScore.

Here are some examples of third-party data points collected by data brokers:

  • Employment information
  • Credit score
  • Allergies and ailments
  • Home address
  • Birth date
  • Voter registration information

Evidently, companies can access a lot of information just by purchasing third-party data from data brokers. But how accurate is this data and how does it impact marketing campaigns? Third-party data is prone to three major inaccuracies:

Lack of Relation

First, data brokers create inaccurate consumer profiles by piecing together data from unrelated and unaffiliated sources. It’s like trying to complete a customer puzzle with a bunch of different pieces from different sets: there’s no way to flawlessly and fully complete it. This lack of relatedness among various third party sources can lead to some stretched and inaccurate conclusions. For example, just because an individual types “cute dog photos” into a search engine doesn’t necessarily mean that he or she is a dog owner.


Brands relying on third-party information risk exposing their customers to irrelevant experiences, and no one likes irrelevant experiences. In fact, in a recent survey, when asked about their reactions after receiving irrelevant information or product recommendations from a company, 47% of US respondents and 44% of UK respondents claimed that they ignored all future communications from the business.

No Cross-Device Accuracy

Lastly, traditional third-party tracking cookies, one of the most well-known and widely-used forms of third-party data, only monitor device-specific behaviors. Heavy reliance on tracking cookies results in an inability to understand users’ cross-device activities, which is especially vital to grasp as the average US consumer owns four devices (Nielsen), more than 20% of consumers between the ages of 18–49 visit websites from four different devices each week (Experian) and 46% of consumers use multiple devices to accomplish a single task (MarketingLand).

With so much room for error, marketers who rely heavily on third-party data to understand and reach their customers are setting themselves up to deliver ineffective campaigns and waste marketing spend. The inability to know exactly who they’re reaching prohibits them from adequately measuring and optimizing their campaigns.