First, Second, & Third-Party Data: What It Is, How To Collect It

May 2024

#first party data

#second part data

#third party data

The more intel you have on your customers, the better decisions you’ll make — and the more revenue you’ll generate. In this blog, we explain the different types of data, and where it comes from.

Recently, Google announced they were once again delaying the removal of third-party cookies until 2025, and some people in adtech breathed a huge sigh of relief. Third-party data is often thought of as the lifeblood of advertising, and some houses were struggling to adapt to using other kinds of data.

But what is third-party data? And what about the most-discussed alternative, first-party data? Are there other kinds of data?

In this blog post, we dig into data: the different types, how they’re collected, and how they affect advertising online.

Table of Contents

Case Study: Insticator transformed Brit+Co’s community with a 50% increase in online engagement. read more.

Why Are We Collecting Data?

Before we break down the types of data, we should briefly point out why so much of online business depends on this information.

In the real world, it’s easy to know where to place your advertisements. If you’re running a gas station, renting billboard space a few miles ahead of the nearest highway exit is a sensible choice. If you’re selling luxury furniture, you can send catalogs to the nice part of town.

But online, your customers could be anywhere. Collecting data on audiences is how advertisers know how, virtually-speaking, to put their ads in places where their customers can see them.

What Is First-Party Data?

First-party is any data that your company collects, on your own customers. As governments worldwide begin to crack down on data collection, first-party data has some tremendous advantages. For one, you gain the consent of your users to collect this data — it’s often in a pop-up when you first enter a website, or part of the terms & conditions when setting up an account or making a sale. 

Types of first-party data include:

  • Demographics: User locations, age, devices, gender, etc.
  • Purchase History: When a customer buys from you, that goes on the record.
  • Website Behavior: Websites they’ve visited, actions they’ve performed on your page, etc.
  • Time On-Site: A basic site metric that can nevertheless tell you a lot.
  • Interests: As your customers “like,” “dislike,” and look into various categories on your site, you’re building a profile of their interests. That profile is first-party data. 

You collect this sort of data from user behavior on your site, sales records, your company CRM, customer-service phone calls, and more. Through first-party data, publishers gather insights about audiences, provide tailored content, and stay in total compliance with privacy laws. 

Here at Insticator, we’ve long been a proponent of first-party data, and have constructed a variety of engagement tools like our Commenting platforms and Trivia & Polling widgets to help gather more of this first-party data for publishers. In the future, a good pool of first-party data is going to be the edge publishers need as other forms of data collection get more restricted (more on that later).

What Is Second-Party Data?

Believe it or not, there is such a thing as second-party data, though it’s not talked about nearly as much as the other kinds. That’s because second-party data is just someone else’s first-party data

If you’re partnering with another company, for example, you might pool your data insights together. Alternatively, if you’re looking to expand your product footprint into a new area, you might purchase someone else’s first-party data. Say your company sells beverages, but you’re looking to branch out with some alcoholic offerings: you might buy first-party data from a company that specializes in alcohol sales to get better insights off the bat.

Second-party data is often considered reliable, because you’re dealing directly with the company that originally collected it, compared to aggregated datasets collected from a number of places. Though the uses of second-party data are narrower, it can be great under the right circumstances. It’s also an important reminder that your own first-party data could be incredibly useful to someone else.

What Is Third-Party Data?

This is the big one.

Third-party data is data that’s not collected by the publisher or the user themselves but by a (you guessed it) third party. This data is collected from all over the Web, aggregated together into datasets, and then sold to companies in the advertising ecosystem who need it.

If dozens of different companies sell their first-party data to a data firm, they can bundle all that data together to create a third-party dataset for sale. But generally speaking, when people talk about “third-party data,” this isn’t what they’re talking about. Usually, they mean third-party tracking cookies.

With third-party tracking cookies, bits of JavaScript code are deposited on a user’s computer, accumulating browsing and behavioral data as a user roams around the Web. If, for example, you find yourself looking at camping equipment online, you may find that the ads you’re served as you browse around the web may start showing more tents. That’s the third-party data being passed from one site to another as your browsing session continues.

Data And The Law

Implemented in 2018, the General Data Protection Regulation is a law governing user privacy over in the EU. We often think of the Internet as “borderless,” but regional and local laws can affect how entities on the Internet interact with their customers. In the case of the GDPR, these privacy laws affect a lot of customer interactions where either or both parties are inside the European Union. Since 2018, other jurisdictions have followed suit, with some American states like California creating similar laws of their own.

Mostly what these laws mean is that data cannot be collected without consumer knowledge and consent (which is why you’re seeing those pop-ups to “accept cookies” on a lot of websites these days) and are quickly making third-party tracking cookies a thing of the past

As a result, tech companies like Google are slowly working their way towards abandoning third-party cookies in favor of other forms of data collection. Under this new system, first-and-second-party data are going to become a lot more important.

Final Thoughts

In short, while third-party data as a whole isn’t going away anytime soon, third-party tracking cookies will be. In the absence left behind, first and second-party data options will become the only game in town. The future, then, will belong to the companies that learn how to collect and wield first-party data effectively.

If you’re ready to kick your first-party collection up a notch, Insticator is a solution that demands a look. With a variety of first-party tools at our disposal, we’ve got the formula for a cookieless future that also improves the experience on your sites. Reach out today.

Written by
Sean Kelly, Senior Content Writer

Sean Kelly is a Senior Content Specialist, St. Louis-based engagement expert with 20 years of experience in content writing, and 8 years in adtech.

komalchand gaidhane

Written by

komalchand gaidhane