The modern consumption process (where consumers do extensive online research before they make a purchase, buy products online or using their mobile, etc.) generates a lot of data. In the past, with everything being done on paper, things were a lot more inefficient. Now, however, all of this data can be gathered, shared and transferred much more easily.
In fact, data has become more important than ever before. With brands and advertisers all vying for the attention of the Millennial Generation (consumers under 35, who make up 25% of British adults), there is a massive push towards data-driven marketing. This approach to marketing has been heralded as the main way forward.
A recent report by Turn and Forbes revealed that marketers are six times more likely to report a higher profit when using data-driven marketing.
Indeed, one thing many of the big players can agree on is the importance of data.
A global review of data-driven marketing by GlobalDMA and the Winterberry Group found in its survey of 3,000 marketing professionals that nearly all recognize the importance of data in advertising and customer experience efforts, with over 77 percent saying they're confident in its prospects for future growth.
According to Pierre Naggar, managing director of Turn Europe, “marketers can base their decisions, for marketing campaigns as well as to inform wider business decisions, on what their customers really want, rather than rely on guesswork”.
According to Brendon Ritz, Meltwater’s Growth Hacker,
“Armed with… data, you can make informed decisions to help set goals, surpass them, grow the company, and prove the department’s worth.”
We thought we’d sum this up for you in the following diagram.
Despite the growing importance of data, there are many amongst us who may still fear it, thinking it means complexity and confusion.
After all, as per Brendon Ritz, “some people are uncomfortable with numbers and metrics. For many of us marketers, our strengths are in relationships, language and other softer skills.”
So let us first try to get to grips with exactly what data is.
What is data?
Data refers to the figures and statistics that have been collated for analysis.
Types of Data
First Party Data
This data is collected from your own audience and customers, and it is generally thought of as the most valuable because of its quality. Whatever is decided regarding third-party cookies, first-party data will always be your own – which makes it the safest form of data.
First-party data can come from:
Data from an advertiser’s web and mobile analytics tools
Customer Relationship Management (CRM) systems
Data collected from subscriptions and newsletter signups
Second Party Data
Second-party data is first-party data that you can acquire from the source (who collected it). Second-party data can be acquired if you enter into partnership with a particular the person who owns it.
Companies with complementary customer sets (or selling complementary services) can share audience data and extend the insights they’ve derived from their own customer engagement data to enrich customer profiles, reach audiences at scale or help with ad targeting.
An example of this is when you buy a car from Audi or Seat and the information is sent to the mother company, VW, which of course offers complementary services.
Third Party Data
Third party data is collected by external data collection companies (or aggregators) and sold to companies for use. They then analyse the data and express it in summary form.
Third party data is used to develop marketing segments for targeted marketing initiatives and can either be from data modeling or registration-based data.
This refers to when the data is processed, and the range of data is increased to include ‘look-a-likes’ i.e those who could potentially be targeted based on their online behaviour. The accuracy of this is considerably lower than that or registration-based data (i.e 20-50%).
This is when an internet user is registered as a potential buyer based on searches. The accuracy of this is much higher, roughly 70%.
The beneﬁt of third party data is the sheer volume of user data you can access. It can also be used for demographic, behavioural, and contextual targeting. Third party data also plays a critical role in solutions like audience targeting and audience extension.
Here at The Media Trader, we thrive on complexity and no problem is too difficult for us. Using sophisticated algorithms, we are able to process massive amounts of data, no matter how complicated, breaking it down and simplifying it for our clients. We help our clients to make sense of data, turning it into insights that they can use, and therefore producing the best results possible.
P.S.: 21 days to go until the Web summit, Dublin. See you there!