Page 412 - Social Media Marketing for Dummies

news, participate in groups, find products, and further professional relationships
that they forget to think about the value exchange at play.

Social media platforms are able to offer their services for free because they gather
data on consumers that is then used by businesses to market on their platforms.
The same applies to company websites and advertising efforts — data is gathered
by businesses (not just the social media platforms) that is then used to market
more effectively. It’s just the nature of how marketing works. To better under-
stand what data you have available to you to play with as a marketer, it’s neces-
sary to learn about first-, second- and third-party data.

» First-party data: This is the data you have directly collected from consumers
who have bought your product and services. It can also be data that you have
collected from consumers who have visited your website, used your service,
or simply engaged with you in some fashion. First-party data is typically of
high data quality and can be used in precise ways for marketing, such as for
retargeting advertisements in Facebook (running ads on Facebook to people
who have already visited your website). This data requires you to explicitly ask
your consumers for permission before collecting or using.
» Second-party data: This is data other businesses may have collected about
consumers whom you may want to market to. The data quality is typically not
as strong as first-party data and has narrower targeting reach but can be used
to run effective marketing campaigns. You typically have to buy these data
sets or form partnerships with those businesses to use their data. It’s key that
the businesses that provide you with this data not only have permission from
the consumers to collect and use the data but also to allow third parties like
you to use it.
» Third-party data: This is the data collected by third parties from multiple
sources and combined into larger data sets and then segmented based on
specific characteristics. Not surprisingly, the quality of these data sets can be
of varying quality and the ability to market effectively with them can be
limited. Even though the data sets can be very large, it’s often outdated. Here
too, the rules of making sure that consumers have granted permission to the
business to collect, use, and sell the data to other businesses are critical to
follow.

Typically, any marketer is probably dealing with a combination of first-, second-
and third-party data in their marketing efforts. For example, you may collect
email addresses on your website (first-party data), combine it with purchasing
data from a retailer that is selling your product (second-party data), and eventually
match all that information in Facebook to create custom audiences (third-party
data) that you can then advertise against. That’s how advertising works and is par
for the course for most advertisers.

396 PART 5 Old Marketing Is New Again with SMM