Is Second-Party Data Worth a Second Look?

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There's nothing new about it. Think magazine subscription lists. But now it's been ramped-up and real-timed by programmatic platforms.

Second-party data is nothing more than somebody else's first-party data. It's been popular as long as direct mailers have been purchasing subscription lists from magazines. So, while it's hardly new, tech-based vendors are starting to expand the second-party execution model, making it more accessible for one-off campaigns. Think, for instance, of Home Depot accessing recent visitors on Whirlpool's and GE's websites to promote a big sale on appliances.

OwnerIQ's Qniverse, for instance, is a platform that hooks up retailers with rentals of second-party data of more than 500 brands programmatically. Light years removed from the old model of renting a list from one manufacturer or an aggregated list of dated information, services such as Qniverse provide retailers with customer data from brand sites based on anonymous shopper data in real time. (It also works the other way, brokering retailer data to brands.) 

It's a Goldilocks proposition to marketers: first-party data is too limited, third-party data is too scattershot, second-party data is just right. OwnerIQ maintains that 50% of shoppers who visit a brand's website make a purchase in the category within 30 days.

“We came to the second-party world when we realized that someone needed to broker a relationship between a retailer and a supplier,” says Jay Habegger (left), cofounder and CEO of OwnerIQ. “If they do it themselves, the retailer has to send an audience request, the brand has to make decisions as to whether or how that retailer can use it. Various controls are imposed and it takes time and effort. We make all that programmatic and add software that dynamically places their content.”

Earlier this month MediaMath launched Helix, a new business brokering the second-party data of the nation's top 100 retailers. “Advertisers struggle with the limited scale of their own customer data and the unreliability of third-party data,” says Helix President Jacob Ross. “The core of Helix is a...second-party data business...with powerful predictive signals that are pooled in an anonymous and aggregated fashion.”

But CTO George Corugedo of RedPoint Global, which uses probabilistic algorithms to create “golden records” of individuals across channels, says that even second-party data amped up by technology has to be matched up with first- and third-party data. “To use that data and apply it to your file, you need to do probabilistic matching. It does act as something of a short cut, but what it really does is add depth to your record.”

Winterberry Group senior managing director Bruce Biegel maintains that programmatic second-party data is fancied-up co-op advertising. “It's just a different way of buying it, but it's a one-time use data exchange. It's co-op as a model, with a different set of rules,” he says. “You're taking something complex and overlaying the data so you can target buyers you wish to interact with, while making the process easier and keeping it anonymous. But it still goes back to RFM [recency, frequency, monetization.]”

The truly new wrinkle in programmatic second-party data, according to Corugedo, is the business opportunity it presents to brands and retailers. “What's interesting about this new world is that everybody's a data aggregator and can sell [their data]. The concept isn't different, but the variety of sources is much broader.”

In total agreement is OwnerIQ's Habegger: “Every retailer and product brand is or will become a data marketer going forward. They've had close relationships and they've been exchanging dollars for years, but they also have marketing assets to share.”

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