First party data is owned by a single company. The data is collected by the company directly from their consumers. This is the most cost-effective data because it’s free. There are no privacy issues involved with first party data because it’s extracted directly from a user with their consent. First party data is also the most reliable source of data because the data comes directly from the customers.

An example of first party data would be a men’s dress store collecting data on transactions completed by members of the store’s rewards program. The store can use this information to understand trends of their shoppers; how often shoppers visit the store, how much they spend each visit and what products are being bought the most.


Second party data is the newest form of data collection (like in the past 2 years) but has the possibility of becoming the most powerful. Second party data is unique because it is another company’s first party data that can be purchased or traded with another company. Second party data also allows for companies that are non-competitors to exchange data within their industry based on customized data points.

An example of second party data would be the men’s dress store exchanging data with a laundromat that is in close proximity. The laundromat gives the dress store data on individuals who have brought their suits in every week for the past five months. The men’s dress store in turn delivers the laundromat data pertaining to individuals who have purchased new dress shirts in the last week. Both the laundromat and the men’s dress store can now run targeted marketing campaigns to these customers. The laundromat could email 20 percent off coupons to the customers of the men’s store that have purchased in the last week, and the men’s dress store could send out a coupon saying “Bring in your old suit to be recycled and receive 40 percent off your next suit.”

As the market begins to use second party data strategies, there is room for a data co-op to be developed. First party data is reliable, customizable and specific. The industry is beginning to see smaller companies being bought out by larger companies mostly for their data. The creation of data co-ops would allow businesses to join co-ops in order to exchange first party data with non-competitors in their industry. Co-ops will allow larger companies to partner with smaller companies rather than buying them out. If companies are able to grow and evolve on their own, innovation within the market would increase. While data co-ops are still a theory, there is definitely room for them to become a reality as long as companies begin to adapt second party data partnerships.

We are in the process of setting up 2nd party data runs as we speak for future use.  This is a game changer.  I will keep you informed.


Third party data is collected by data collection companies and sold to companies for use. This form of data collection is more expensive, but provides a greater amount of information about the market that can be used by the purchasing company. Third party data is used to develop marketing segments for targeted marketing initiatives and can either be from data modeling or registration-based data.

An example of third party data would be the men’s dress store reaching out to a retail data provider who collects data from men’s fashion sites, retail e-commerce and/or brick and mortar stores. The data delivered to the men’s dress store will help the company establish a marketing campaign to drive more customers to their store.


There is no good, better, best with data. It is important for companies to understand the difference between the different types data in order to establish strategies that will benefit themselves. First party data is customizable, owned by the company and the most reliable. Third party data gives deeper insight into the market and provides more information to make decisions, while second party data allows for non-competitive businesses to build partnerships with one another to drive targeted marketing campaigns. It is best if all three strategies are used, however, it takes time and relationships to obtain these three data types, so figure out which is best for the company before using or collecting data.