How People Feel About Third-Party Data
Like it or not, third-party data affects everyone—from credit reports and purchase history to entertainment and even what car you buy. It’s a multi-billion dollar industry built around the collecting and selling of information.
Whether you agree with it, the shift from third-party data (purchased information) to first-party data (business-owned) is happening. One benefit of this shift is that it provides the opportunity to deliver personalized messages, but it also comes with concerns about privacy and security. Consumers will wonder how much a company really knows about them and how they’re protecting that information.
We recently conducted a research study to help organizations better understand how professionals are gathering and using customer data, how they feel about the value of that data, and what will happen as a result of changes within third-party data that will be available to them. After surveying more than 230 professionals across the United States, it was fascinating to see the perspectives, attitudes, and beliefs that emerged.
Different Segments, Different Beliefs
After conducting the research, three distinct segments emerged. Think about which one sounds like your ideas and beliefs about third-party data.
#1: Independent Respondents
Representing 25 percent of our survey participants, Independent respondents feel good about their organization’s use of data. They aren’t too worried about the loss of third-party data, mainly because they don’t use much of it. These respondents say they carefully protect the privacy of the data they collect, and they know what to do with it. They give their organizations high marks for analyzing data, keeping it current and integrating it across departments so everyone can use it.
Independent respondents also say their organization focuses on making sure they are well-prepared for whatever comes in the future because they’re good at adjusting to change.
This group is the least likely of our data segments to say they worry about their organization’s ability to succeed without access to third-party data. They believe that data-based approaches to marketing are more effective than traditional methods. And they’re the least likely to say that buyers are more likely to block their ads or that data privacy laws make it harder for them to do their jobs.
#2: Data-Reliant Respondents
Representing 33 percent of our participants, Data-Reliant respondents value data highly and think it’s more important than ever (especially data generated from the Web).
These respondents say their organizations are very strategic when it comes to data-based marketing and sales decisions. Because of this, they’re actively working to add more data into their decision-making. They believe organizations that use data-based approaches to marketing are better prepared for market changes and opportunities.
Data-Reliant respondents also say it’s perfectly ethical to use third-party user data to target and connect prospects and that data-based marketing is more effective than traditional methods. They say their organization needs a custom-built system to manage their customer data.
#3: Concerned Respondents
Representing the largest segment of our study, Concerned respondents make up 42 percent of the total. What makes them unique is that they believe the best prospect lists are developed in-house and that buying data creates risks and reflects poorly on the organizations that use them.
These respondents believe in-person activities will always be the best way for them to sell their products or services and working with purchased data about prospects makes organizations look like spammers.
They are the most likely of our respondents to believe that buyers will block ads and are much more likely to say their organization tends to “spray and pray” their marketing activities—a strategy that includes saying something to everyone in the hope of reaching the right audience.
Concerned respondents feel it’s risky to use third-party data in order to reach prospects and even worry about the privacy of their own personal data. They are by far the most likely to believe that access to third-party data is going away.
Some additional takeaways we discovered are that Data-Reliant and Concerned respondents are significantly more likely than Independent respondents to say their organization purchases third-party data about their customers and prospects’ online activity. Most Independent respondents say they collect only basic contact data from their customers.
Although each segment has different thoughts about buying and working with third-party data, they do have one thing in common. They are all looking at the third-party data landscape differently—both in terms of opportunities and risks.
New Regulations, New Roadblocks for Marketers
Because the internet is unregulated, it can seem like the Wild West. But now, federal and state governments are ready to create rules on collecting third-party data—case and point, the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). The GDPR is currently in Europe, but many US companies are following these regulations because it sets a standard for what may eventually be done here. There are pros and cons to each of them, but as these rules are trying to protect the consumer, it’s causing new roadblocks for marketers.
Independent respondents may not care about these changes, but it’s still important to know what’s going on in regard to how third-party data is regulated. Stay flexible by making changes when needed and rely on your in-house data to make changes in your process. For Data-Reliant and Concerned respondents, start collecting that first-party data now to be more in control.
Don’t know where to start with collecting first-party data? Starting can be as easy as creating a survey online. After an event, send out a survey with 3-4 questions for attendees to answer. The sooner you start collecting data, the less stress you’ll have when the switch fully happens.
Ask yourself: Which of the segments best represents your organization? The answer will create challenges now and in the future. In our next post, we’ll continue to explore the differences between these groups and how they see data collection and usage.
To learn more about the research study, check out our entire executive summary. And to explore the data yourself, check it out here.