Data 101: The Different Types of Data
Measuring marketing campaign performance is an important activity for just about any modern business. It's been said that "if it can't be measured, it can't be improved," and companies should always be alert to ways in which their strategies and tactics can be optimized for best results.
Digital marketing is the top priority for most companies — and ad tracking is the most efficient way to measure the effectiveness of digital marketing campaigns. Of course, today's advertisers often run into the problem of "information overload." They have virtually instant access to a vast amount of data, which can seem overwhelming when taken out of context.
With that in mind, let's sift through the different types of data that advertisers can use to measure marketing performance.
What is Ad Tracking?
Ad tracking is the process of collecting data and user insights on the performance of online advertising campaigns. Ad tracking enables companies to understand how many people their digital ads are reaching and how effective those ads are at driving action.
There are several methods of collecting such information, including measuring clicks, impressions, and conversions. However, just about all tracking data falls into one of three categories: first-party data, second-party data, and third-party data. Let's examine those one at a time.
Simply put, first-party data is the information that your company collects about customers. This is information that your customers have freely given you, and as such, it is perhaps the most valuable category of digital marketing data in existence. Your company owns and manages first-party data.
First-party data can come from a lot of different sources, including:
- Your website tracking tool (how much data this tool gathers is typically determined by user preference)
- Your company's official app
- Your email newsletter
- Your CRM
- Your social media accounts (via interactive content like polls or surveys)
- First-hand customer contact
- Customer profiles created on your site or app
While first-party data is quite valuable since it comes directly from your customers, it does have its limitations. For instance, the scope of the information may be limited to basic contact information, at least initially. Moreover, you may not be able to determine entire audience segments from first-party data alone.
Second-party data is first-party data...from someone else. In other words, another organization may collect first-party data from its customers and then sell that information to you (within the boundary of applicable data protection laws).
Second-party data can be helpful if you need to "fill in the gaps" in your own information system. However, you'll only be able to receive second-party data from companies that aren't in direct competition with you and have no conflict of interest with your business. (So don't expect your number #1 competitor to shell out second-party data to your marketing team!)
Third-party data encompasses any information collected by an entity without a direct relationship with the consumer. This may be a Data Management Platform (DMP) or another type of data provider. Think of it this way: third-party data vendors act as the "middleman" between you and your customers in terms of gathering and delivering marketing data. (Although relatively few customers are aware of this "middleman's" existence.)
Third-party data comes from many different sources. It can include behavioral data, such as which websites your customers visit or which hobbies they're interested in. Third-party data can also be demographic, including the average age of your target customers, their gender, their location, and so forth.
A lot of third-party data comes from "cookies," or third-party ad tracking tools that can "follow" a user as they browse the Internet. However, third-party cookies are being eliminated by Google — which means many advertisers are being forced to rethink their approach to marketing metrics.
What are the Benefits of Ad Tracking?
There are several key benefits associated with ad tracking. For example:
- A better understanding of your audience: Ad tracking can help you identify which keywords your target customers are more likely to use, which geographical region they live in, etc.
- Enhanced marketing campaigns: As you learn more about your audience, you'll be in a better position to allocate marketing dollars to areas where they'll produce the best ROI.
- Improved content generation: Ad tracking also allows you to create and distribute content that is more personalized and valuable to your target demographic.
- More conversions: This is the ultimate goal of any marketing campaign — and ad tracking dovetails nicely with this objective. The more you know about your audience, the more you can tailor your content to their needs; and the more valuable your content is, the more prospects you'll be able to convert into customers.
Managing Data is Easy With CoxNext
Maintaining a database of consumer tracking data can provide your marketing team with several key advantages moving forward. When your marketers have an in-depth knowledge of your target buyer, you can also have the power to optimize your campaigns, track their performance, and deliver exceptional results every time.
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