Throw a party with your advertising data
If you're hosting a party, you've got to have the perfect guest list -- and your data is the same way. Columnist Adam Grow walks you through how to use comprehensive first-, second- and third-party data to acquire the right customers.
Acquiring new customers is a lot like throwing a house party. You want to invite as many people as possible, but you want to invite the right people — not the ones who will never show up (or who will show, but you’ll wish they didn’t).
In this article, we’ll compare advertising audiences to the different groups of people you could invite and show you how to use this metaphor to leverage data to acquire new audiences.
Say you just moved into your friend’s neighborhood and wanted to throw a “Game of Thrones” marathon party before the season finale to help you meet the neighbors. Do you:
- Only invite the people in the neighborhood that you already know and who like “Game of Thrones?”
- Invite the people you know and tell them to invite their other epic fantasy-loving friends in the neighborhood?
- Invite everyone in the neighborhood who’s near your age and always looking for a new TV series to follow?
If you host the first party, you won’t fulfill your purpose of meeting anyone new. If you host the second party, there’s a good chance they’ll all enjoy the TV marathon. And if you host the third party, it’s not guaranteed that everyone will enjoy the show.
Each group responds in a different way. This is similar to the three types of advertising data. Each type includes audiences with a different kind of interest in your products, and therefore, each produces different results when used. It’s up to you to find the right mix.
Your ‘Game of Thrones’-loving friends
First-party data is like the party with people you already know who love your brand. Remember to be all-inclusive when gathering this data — don’t use only CRM (customer relationship management) information and web analytics. You can also gather customers’ names, ages, geographical locations, purchase history and site interactions from mobile apps, mobile web use, SMS, emails and customer call centers.
Think about when someone calls your customer service center and says, “I saw this shirt in your store in Salt Lake City, but they didn’t have my size, and I can’t find it online.” You know they’re in Utah, you know what size clothes they wear, and you’ll have to access their name and email address in order to help them. Remember that data so that you can use it to improve their customer experience with a relevant offer in the future.
While first-party data and the people you already know are great, inviting only them doesn’t fulfill your purpose of finding new customers or making new friends.
You also can use your first-party data to create valuable seed audiences for second- and third-party data. Then, to make new friends you think you’ll click with, have people you already know (your trusted partners) introduce you to their friends who are similar to those in the seed audience.
Epic fantasy lovers
When your trusted friends introduce you to their friends who, like themselves, love other fantasy dramas, there’s a good chance those people will enjoy your “Game of Thrones” marathon. Second-party data behaves in a similar way — when your trusted partner introduces you to people who have interests similar to your existing customers, there’s a better chance these new consumers will convert on your site, and they have higher potential to become loyal customers.
Second-party data is increasing in popularity among marketers. In a 2015 Signal study, 60 percent of marketers said they plan to increase their use of second-party data.
Unlike first-party data, second-party data allows you to reach new consumers and includes people more likely to convert than those found in third-party data. While third-party data comes from various sources that don’t directly interact with the consumers, second-party data is another brand’s first-party data — it comes directly from a brand, like our company, with whom you can partner to access their data.
Because first-party data is usually high-quality and extremely valuable, second-party data can be just as high-quality and valuable but also provides further reach than just your data. Full of active, in-market shoppers, second-party data can be used for directly targeting consumers and to create high-value seed audiences for lookalike modeling.
With valuable second-party data, you don’t have to use an accumulated, lower-quality data source to find new consumers. Rather, you can partner with a brand that has data on the specific type of consumers you’re interested in to find new audiences with demographics and behaviors similar to your existing customers. You might discover new loyal customers — or discover a shared interest that results in a new best friend.
Age-appropriate audiences who love TV
Just as when you invite everyone in the neighborhood who follows a myriad of TV series, even though you don’t know most of them, third-party data is information collected by someone who doesn’t have a direct relationship with the consumer — like comScore, BlueKai and others.
Applying key behavior and demographic filters will help you reach more targeted consumers within those larger audience pools. Maybe these neighbors have watched trailers of fantasy epics or are always searching for a new series to watch but never found the right one. No matter what category your products fall into, you can almost certainly find a company selling data that includes the types of consumers you’re looking for.
Your third group of invitees includes a lot of new people to meet — TV watchers are in no short supply — and third-party data includes a lot of new people for your brand. This large group of new people may include some who become interested in “Game of Thrones,” but it may also include some who prefer “Modern Family.” It has the largest reach but isn’t always the most relevant or highest quality.
The perfect guest list: A comprehensive data strategy is key
The best solution to get the right customers, like getting the right group of people to your party, comes from a comprehensive targeting strategy with first-, second- and third-party data — some people you know, some people who enjoy fantasy epics, and some who have never watched them but enjoy TV series.
Depending on your acquisition goals, these different data sources may each play a part in your prospecting strategies and can become one strong asset with scale and high-quality audiences that are still unique to your brand. But get your invitations out soon, because winter is here.
Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.