What Is Third-Party Data
Third-party data is information that is collected by an entity other than the individual or organization that will ultimately use it. This type of data is typically gathered for business purposes, such as marketing research or product development.
While third-party data can be very useful, it's important to remember that this type of information may not be accurate or representative of the entire population.
For example, if a survey only includes people who live in one city, the results may not be representative of people who live in other areas.
Additionally, people may not always answer questions truthfully, which can skew the data.
Where Does Third-Party Data Come From
Third-party data is collected from a variety of sources, including online and offline data sources. Online data sources include website cookies, pixel tags, and other tracking technologies. Offline data sources include loyalty cards, customer surveys, and public records.
To acquire information about a wide audience, independent researchers employ surveys, interviews, and feedback forms.
Organizations can then acquire this data for their own use, just as second-party data.
The difference between third-party data and first-party & second-party is that the majority of third-party research is done with random sample sizes.
Unlike the other two types of data, which is gathered from your customers, third-party data is gathered from anyone who is willing to fill out a survey. While this increases the number of participants and responses, it's difficult to predict whether the data will be valuable to your company.
Third-party data is often shared without the individual’s knowledge or consent. This raises privacy concerns and has led to calls for increased regulation of the collection and use of this type of data.
What Are Examples of Third-Party Data
One of the most common examples of third-party data is consumer demographic data. This type of information can be sourced from government census records, marketing research firms, or even online surveys. It can provide valuable insights into the age, gender, income level, education level, and family size of a company's target market.
Another common type of third-party data is purchasing behavior data. This information can be sourced from loyalty programs, credit card companies, or online retailers. It can give businesses a better understanding of what products and services their target market is interested in, as well as how much they are willing to spend on those items.
Finally, social media data is another example of third-party data that can be used to supplement a company's own customer data. This type of information can be sourced from social media platforms like Facebook, Twitter, and Instagram. It can provide insights into the interests, values, and opinions of a company's target market.
Disadvantages of Third-Party Data
Third-party data has been a staple of the marketing industry for years. However, with the new General Data Protection Regulation (GDPR) in effect, many companies are rethinking their use of this type of data. Here are some of the disadvantages of third-party data:
1. You Don't Know Where It Comes From
One of the biggest problems with third-party data is that you don't really know where it comes from. The company you're buying it from may not be entirely transparent about where they got it, and there's no way to verify its accuracy. This can lead to all sorts of problems down the line, including wasted marketing spending and inaccurate targeting.
2. It's Often Incomplete or Outdated
Another issue with third-party data is that it's often incomplete or outdated. This is because it's collected from a variety of sources, and not all of them may be reliable. As a result, you could end up with a marketing list that's missing important information or full of inaccurate data.
3. It Can Be unstable
Third-party data can also be unstable, meaning it can change unexpectedly. This can make it difficult to keep your marketing lists up-to-date and can lead to wasted spending if you're targeting people who have moved on from your target audience.
4. You Could Be in Violation of GDPR
If you're using third-party data from EU citizens, you could be in violation of GDPR. The new regulation requires companies to get explicit consent from people before collecting, using or sharing their data. This means that if you're using third-party data for marketing purposes, you need to make sure you have the proper consent forms in place.
5. It's Not Always Ethical
Another disadvantage of third-party data is that it's not always ethical. This is because it's often collected without people's knowledge or consent. In some cases, it may even be collected illegally. As a result, using this type of data can damage your reputation and put you at risk of legal action.
6. You Don't Have Control Over It
Finally, one of the biggest problems with third-party data is that you don't have control over it. Once you've bought it, you can't change it or update it. This means that if there are any errors, you're stuck with them.
Overall, there are a number of disadvantages to using third-party data. While it can be a useful tool, it's important to weigh the pros and cons before making any decisions.
What Is Third-Party Data Breach
Third-party data breaches occur when a third-party service provider, such as a cloud storage provider or an e-commerce platform, experiences a data breach. This type of data breach can be especially damaging because it can expose sensitive information that you may not have even known was being stored by a third party.
In some cases, a third-party data breach can also lead to identity theft or fraud.
There are a few steps you can take to protect yourself from third-party data breaches.
First, make sure that you only use reputable and trusted third-party service providers.
Second, regularly review the security settings for all of your accounts with third-party service providers.
Finally, keep an eye out for any suspicious activity on your accounts or on your credit report.
If you believe that you may have been a victim of a third-party data breach, you should take steps to protect your identity and your financial information.