Breaking Down Data
By: Jeremy Sneed
How many of you are cluelessly nodding your heads along when you see headlines talking about data or when it comes up in conversation?
There’s so much talk around data and around it all tends to make things confusing.
Don’t worry, we’re here to break down what it all really means.
Specifically, we’re here to break down data by 1st, 2nd, and 3rd party data.
What is data anyway?
Data in its strict definition is “distinct pieces of information.” The word data, however, has been used to describe information relating to computers and the online domain since the beginning of their existence.
Data is essentially multiple pieces of distinct information.
Since we’re in the world of digital advertising, we’ll keep this data talk digital.
Data is on the rise
Now take into consideration that in the U.S., nearly every move the 300 million of us makes in the online world is being tracked or stored somewhere.
We’re adding to the world of data at an exponential rate that it's nearly incomprehensible. All of this adds up to amounts of data that are becoming nearly immeasurable even just on a day to day scope. That isn’t sarcasm, it’s just the facts.
What does this add up to?
Here’s some information to give you an idea.
Every minute online:
- The Weather Channel receives over 18 million forecast requests.
- Around 150 million emails are sent.
- Users watch over 4 million YouTube videos.
- 400,000 tweets are sent.
- 510,000 comments are posted on Facebook.
- 46,000 Instagram photos are posted.
This is just the tip of the iceberg.
When it’s all piled together in one solitary view and on a global scale we’re looking at around 18 zettabytes of data currently in existence.
Wildly enough, over half of that data was generated within the past two years alone.
Nerd moment: a single zettabyte is 1,000,000,000,000,000,000,000 bytes or 250 billion DVDs.
Fueling El Toro
Basically, this all adds up to further prosperity for El Toro.
The more consumers are online, the more insights we’re becoming privy to. Day to day behaviors, locations people have visited, and where consumers reside is knowledge we continually have more access to.
El Toro is just as much a data company as it is an ad tech company. Our tech and patented algorithms are in constant deployment, capturing and observing data in real-time.
Let’s Talk Data
With such endless amounts of data in existence, it’s important to know what all we’re really talking about.
There are three noted forms of online data, 1st, 2nd and 3rd party data. Each form of data has its significance and purpose and we’re here to sort that out.
1st Party Data
What is it
Firstly, 1st party data is perhaps the most valuable data there is.
1st party data is data that you yourself have gathered. This is data that came from your own efforts of collection and pertains to your audience base.
1st party data could be the addresses of consumers or their past purchases.
There’s a lot that makes 1st party data so valuable. 1st party data is typically free to collect. Even beyond this, 1st party data is extremely reliable because it’s directly from your consumers and therefore people who have already shown an interest in your brand.
With 1st party data, you aren’t relying on any outside sources to pull your data from. Instead, your customers are giving it to you outright.
Collecting 1st Party Data
1st party data can be gathered in a number of ways. Typically the most common means of obtaining 1st party data is through a business’s online website.
One common way to get 1st party data from your customers is by placing a pixel on your website. Once you enable a pixel on your site, you can then collect information pertaining to your audience’s site visit. A pixel can track visitor’s behaviors while they’re on your site.
Don’t overcomplicate it. You can also get 1st party data through your website even more easily than that. Form fills such as signing up for a mailing is a great example.
Easily the most common form of 1st party data at your , customer purchase data. By simply buying a product from your website, customers are handing over some of their most relevant data such as their email address and home address.
Why it’s Useful
1st party data comes directly from who it’s pertinent to: you. 1st party data is first hand and first source. This your fan base.
We know that already existing customers are your greatest audience to leverage. This is given as this audience is most likely to convert per their already displayed loyalty.
1st party data is fantastic because it gives deeper insights and details behind a customer. All of this can then be leveraged for more detailed and more accurate ad targeting and messaging for your already existing customers.
1st party data is the best place to start when it comes to gaining more data for more audience building or insights.
2nd party data
What is it
2nd party data is the next best thing since 1st party data.
2nd party data is data obtained on consumers directly through another organization. This then is typically purchased or sold in trade.
Collecting 2nd party data
Typically, companies will identify entities with similar consumer bases.
Organizations can work together to build upon one another’s data.
Purchasing or trading data between companies is a common form of exchanging 2nd party data.
2nd party data is useful
Essentially, 2nd party data can be purchased in order to enhance your already existing data.
Consider what companies or organizations would have a similar audience pool to your own. From here, acquiring data from this related source can further enrich your audience pool. You may find that this 2nd party data not only gives more insight behind your audience but can add new members to your audience as well.
A simple case scenario would be a high-end jewelry store partnering with a yacht club in town. These two companies share similarities in their audience’s wealth-indicators. With this knowledge, these companies are ideal for exchanging data.
3rd party data
What is it
3rd party data is data that is purchased from an outside source. The difference in 2nd party data and 3rd party data, however, is that 3rd party data was not originally obtained by the seller of the data.
Data brokers are typically the handlers of 3rd party data. These entities monitor and collect data online from wherever it’s available. This data is then aggregated into a massive list.
3rd party data is then made available for purchase.
Collecting 3rd party data
There are a number of 3rd party data providers on the market.
Here at El Toro, we push our clients towards respectable and trustworthy data brokers.
Why 3rd party data is useful
3rd party data really opens up your audience potential.
With 1st party data, you’re limited to those who have interacted with your brand. Even with 2nd party data, you’re limited to those who have interacted with your peer’s company. In the case of 3rd party data, however, you can open up to a completely new audience pool.
With 3rd party data, you can create audiences based on data points you find pertinent to your brand. Audience creation with 3rd party data can be done by consumer wealth indicators, zip codes, online purchases, even more.
Not only can you use 3rd party data to create new audiences, but you can use it for audience refinement as well.
If you’re looking to narrow down your audience list or aggregate it in a way that allows for more relevant personalization, 3rd party data is a terrific resource.
Data and El Toro
Perfecting an Art
At El Toro, we’re using data to fulfill the advertising industry’s need for precise and dependable ad targeting.
We have domain over numerous, proprietary online data sources.
We’re able to absorb consumer data directly from the sources. We’re digesting, validating, and making use of data all in real-time`.
By now you probably know, we match physical addresses to IP address. We then use this IP address for the purpose of ad targeting. By this, we can target direct households or physical addresses with digital advertisements.
In order to match physical addresses to IP addresses, our algorithms are monitoring data from these direct sources in real-time.
To provide high levels of validity behind our targeting, we’re monitoring nearly 400 million data points per second.
We’ve used this to perfect the art of ad targeting. Through our data, we’ve created a way for our clients to target consumers with certainty unlike ever before.
Optimize and Enhance
While we don’t rely on you bringing data, many of our clients come to us with their consumer data for audience targeting.
Our IP Targeting product is specifically designed to be powered by our client’s data. The only data we need for this? Physical addresses
Clients can optimize their data before coming to El Toro
Take, for example, clients can segment their 1st party data by pulling their highest-spending consumers. They could then purchase 2nd party data from a company with a similar consumer base. From here, they can cross-reference this list to see who was seen as a high-spender at this location as well. They could then obtain 3rd party data and pull those only identified as having a high income.
All of this to then further validate their originating data.
Clients can also optimize their data through El Toro.
Take a look at our recent work with an NFL team for more information.
This NFL team used El Toro’s location-based data. Our data was able to identify locations that consumers from this list had been seen at. Through this, we were able to show high-spending consumers as well as consumers with a high affinity for sporting events.
The results? Most importantly, a conversion rate of over 30%.
With this, we were able to refine their audience list with more relevant, validated insights.
The More the Merrier
We have access to more data now than ever in the history of our existence. Of course the online world just began a few decades ago, but still.
As we said, don’t overthink it. Don’t forget, it all starts somewhere.
Consider obtaining more 1st party data from your client base. You could also research partners to gather 2nd party data from. Perhaps you might enrich your data through 3rd party data sources. It’s also a great idea to come to El Toro and allow us to assist you in data analytics and enrichment.
In the end, you can rest assured that El Toro is making use of these endless levels of data. We’re doing it all for the power of honest and trustworthy digital advertising.
By: Jeremy Sneed