Third-party data is the new bacon
Anyone who knows me knows I love to cook and be in the kitchen. Today, for example, I’ve got a sheet full of Wagyu beef bacon cooking in the oven, and let me tell you – there’s not a better smell than Local Yocal bacon in the air.
Don’t you wish you had a home office right about now?
Besides the smell, and the out-of-this-world taste, bacon also gets me thinking about why people love it so much. And then it occurred to me – data is the bacon on the marketer’s plate because it makes everything better (work with me).
Data is like bacon
Just as bacon makes a meal complete, data in all its forms makes us smarter. Ignoring the data in front of us makes us do stupid things, like sending stupid emails.
How can you target your existing customers without data? When you think about your customers, do you imagine them like cattle you herd to the cart? Data is what makes every marketer smarter and better able to do the job.
But all data isn’t created equal. Most marketers collect first-party data – the kind your customers hand over in preference centers or surveys or that you infer from their behavior on your emails, websites and social channels. And that’s where they stop.
First-party data is like supermarket bacon – it’s easy to get, and it can taste good. But the Wagyu beef bacon of data is third-party data because it can take you where Oscar Mayer can’t.
Getting the whole existing customer picture with third-party data
Why third-party? Because customers lie. Sorry to put it out there like that, but customers, consumers, end users all lie. They might not lie deliberately. They might not even realize they’re lying, but they still do it and for many reasons.
They might aspire to want something, or they might say they prefer one thing but then buy something else. And, what they tell you might be different from what they do or say on other websites, especially your competitors’.
When I was in Cannes recently, I was talking with a C-level McDonald’s person. The company had been rolling out food-ordering kiosks in its European locations. I’d seen them in London, and they remind me of casino slot machines – all bright colors and video.
This exec told me something surprising: People order more food when they use a kiosk. They hold back when they look at a human to place their orders, or they order what they think they should have instead of what they want.
They might order a salad when they wanted a cheeseburger, or they might order a single cheeseburger instead of the Deluxe Quarter-Pounder with Cheese they would order at a kiosk.
Customers like to protect their own ideas of themselves. Call it vanity, call it white lies or self-deception, but when talking about first-party data, it’s not entirely accurate.
3 reasons why third-party data is the Wagyu beef bacon of data
- Third-party data gives you an idea of who your customers are outside of their experiences with your brand.
If you could look at the customer profile Woot! keeps on me, it would show I buy only refurbished electronics, tech and gadgets.
That probably makes Woot! think I’m a cheap guy who buys only a lot of reconditioned crap. That might be true for Woot!, but only because Woot! is the only place I buy it. So, the profile doesn’t reflect how I shop across the web.
Woot! doesn’t know I’m a huge wine snob. I buy a lot of wine, and Woot! sells wine. But not to me, because its first-party data doesn’t show that I buy wine on other websites. The only way Woot! would find that out is to look at third-party data.
In the 360-degree view of your customer, first-party data shows you only one or two degrees.
- Third-party data enriches your modeling and advanced segmentation.
In an earlier work life, I did a project for a large global software company. It had a separate division just for business analysis, with data scientists and analytics people studying B2B and B2C behavior.
This company used that data to develop incredible models and insights into their users and to make targeting decisions – but with only its own customer data.
My team worked with the company to redo its models. We supplemented the first-party data with a vast amount of third-party data and propensity models and created our own models and personas. When we compared our results, the company reps saw everything they had thought about their users was wrong.
Using third-party data, we presented detailed, accurate views of customers in personas that told us how to communicate with them, what the messages should be, what behaviors to anticipate and what customers did when they weren’t using that company’s software.
The company’s own models sought to understand its users only when they were using the programs. We showed it what its users did with the other 23.5 hours in the day. In this way, our models helped the company communicate better with its customers.
- Third-party data has become easier to access.
You can buy data from companies like Acxiom, Epsilon, Experian and other companies and integrate it with your systems through an API so you can pull out just what you need. Facebook, Google and Amazon have programs you can use to upload your customer lists and do direct matching and lookalike modeling.
This accessibility makes third-party data more powerful. You don’t have to rely on systems that tell you what you already know about your customers.
Third-party data offers us more richness of information. When we ignore it, we ignore the reality that customers act different when they aren’t on our own sites.
First-person marketers are aggressive about reaching out to get access to this valuable information because they know it helps them target their messages more accurately and sharpens their ideas of who their users are.
If you don’t incorporate data, you’re just sending batch-and-blast email, and batch-and-blast is like eating Canadian bacon. It doesn’t thrill you to the core like a maple-covered, triple-thick, peppered slice cut from the center of the beef or pork belly – and that’s the same feeling that you can get from third-party data.