Today, more reliable than 3rd Party data, 2nd Party data has a strong competitive value and can target qualified audiences. This data corresponds to the 1st Party data of another advertiser, and 2nd Party partnerships prove to be very lucrative for advertisers with little or no access to the consumer (like Danone, Nestlé, or Mondelez).
According to a study conducted by Forrester on 100 advertisers with more than 500 employees, 54% of them have already set up a data exchange. All are unanimous on the fact that this exchange made it possible:
- increase sales
- refine knowledge about customers and leads
- improve the ROI of digital activations
The profitability of the partnership will also depend on the data exchanged. The more relevant it is to your business, the more profitable the partnership will be. Moreover, advertisers who use 2nd Party data are not limited to a single partner, the multitude of 2nd Party partnerships enriches their marketing strategies.
The choice of your partner is thus crucial and sometimes difficult, we entrust our 5 best practices to you to succeed this operation.
1. Identify and structure your business goals
Start by asking yourself which business objectives you want to achieve. Having clear objectives will simplify the choice of your partner and the data to exchange.
We advise you to structure all these objectives along the traditional funnel marketing:
Illustration n°1 : Marketing Funnel
At each step of the funnel, detail each use case you wish to implement to bring value to your business.
The most common objectives are:
- Make your product or service known
For example: Extend your prospecting audience via profiles with similar tastes, behaviors or moments of life to your customers.
- Acquire new customers
For example: Target hot prospects interested in products competing with yours for a display campaign
- Convert customers who already know your products or services
For example: Scoring your audiences to retargeter and personalize the messages addressed for a display campaign
Increase a customer’s value via upsell or cross-sell
For example: Make your customers discover your other products and services according to their moment of life or their appetite via an emailing campaign
- Build customer loyalty and prevent attrition
For example: Target and retain customers in the termination phase whose motivations/behaviours have been detected via data from other sites
For the exercise to bear fruit, be as exhaustive as possible and try to list ALL the uses and opportunities imaginable for your business.
2. Prioritize your use cases according to a tactical or strategic ambition
Once you have listed the use cases, structure them along two axes:
- X-axis: implementation difficulty, for example
- Technical feasibility
- Your internal capabilities
- The necessary digital media budget
- In ordinates: business priority, for example:
- Increase product sales
- Increase a customer’s value
- Reduce media costs
Thanks to this matrix you will see two zones appear, the tactical use cases and the strategic use cases:
Illustration n°2 : Use case Mapping
Tactical use cases are those that will be easily and quickly implemented but will bring less value than strategic use cases that will require more time to implement.
Use this matrix to prioritize the use cases you have selected.
3. Define a structured list of relevant partners
In order not to get lost in choosing the 2nd Party partner, you must adopt a structured approach. Two possibilities are offered to you to establish a first list of about twenty potential partners:
- Vertical: these are companies that do not compete on the same value chain
- Transversal: these are companies with common interests but on different value chains
Next, prioritize all the partners to contact and select, first, only those that are most relevant for your use cases.
You can prioritize the list of your potential partners according to three axes:
- Accessibility: is the partner willing to exchange data?
- Relevance: is the partner’s data relevant to my activity?
Volume: Is the partner’s data volume significant?
Illustration n°3 : application to a sport accessories retailer
Once built, this matrix allows to quickly visualize the companies to address in priority to establish a partnership: those located in the upper right corner.
4. Target the necessary data for your use cases (and GDPR zoom)
The choice of the data to be exchanged is based on the use cases selected. Nevertheless, a company generally has five types of raw data on its customers and prospects:
- Socio-demo: name, age, situation…
- Moment of life: pages visited, actions carried out…
- Appetences: shared content, loved and consumed content…
- Transactional: product purchased, amount and frequency of purchase…
- Sensitive: political opinion, racial origins…
The value of these data can increase as soon as they are enriched by additional analyses, and obtain:
- Calculated data: palatability score, heat score, clustering
Interpreted data: life moment, life cycle, micro-moment
Focus GDPR :
The current regulations on personal data changed on May 25, 2018. Therefore, the concepts of personal data, collection, processing and storage are reinforced.
This also concerns any exchange of data, and it will be a matter of checking before exchanging data that it respects the following points:
- When collecting data, the person must be informed that his / her data will be collected and disseminated to a contractual third party (in particular in the case of the 2nd Party partnership) and insist on the following 3 points:
- Consent : The consent of the person must be obtained in a free and informed manner and must result from a decision “by which a person concerned agrees, by a statement or by a clear positive act”
- Treatment : Inform the person that his personal information will be processed for enrichment and profiling (especially at the partner’s). The person being informed will be able to give or not his consent about this type of data processing..
- Purpose : Inform the person of the activation of his personal data (digital advertising for example).
- When storing the data :
- Security :
You must take all necessary precautions, in view of the nature of the data and the risks presented by the processing, to preserve the security of the data and, in particular, to prevent them from being distorted, damaged, or that unauthorized third parties have therein access.”
- Portability :
“You will have to offer people the ability to recover some of their data in an open, machine-readable format.” This means that people (data subjects) could recover their data from one company and bring them to a competitor.
- Right to be forgotten :
The data subject has the right to obtain from the data controller the deletion of personal data concerning him / her and the data controller has the obligation to erase this personal data as soon as possible and from his / her partners.
- Security :
Finally, it is important to note that in the event of a data breach with your partner, you will also be held responsible.
5. Respect an ethical charter with its partner
Seal your partnership with a contract drafted and validated by the legal entities of both partners.
To make this contract more pragmatic for marketing and project teams, here is an example of an Ethics Charter. This has no legal value but serves as good conduct to be followed by each partner and ensures an honest, reliable and sustainable partnership.
2nd Party Data Partnership Artefact Ethics Charter
– 1 –
Honouring commitments throughout the duration of the partnership
– 2 –
Working to ensure quality, transparency and sustainability of collaboration
– 3 –
To accompany its partner in the operational realization of its agreement and to take into account, as far as possible, its opinions and comments
– 4 –
Guarantee the fairness of the exchange and compliance with data valuation rules
– 5 –
Inform its customers and obtain their consent to the external processing of their personal data in accordance with the European Data Protection Regulation (2018)
– 6 –
Explain the legitimate purpose of the processing of data collected from its partner
– 7 –
Undertake to process only the data necessary to achieve this purpose
– 8 –
Keep these data only for as long as necessary for the purpose of their processing
– 9 –
Ensure the security of its computer systems
– 10 –
Ensure the protection and confidentiality of the data obtained
– 11 –
Notify your partner if your data leaks
You are looking for a 2nd Party partner? Let us help you find the right partner for your business!
Charles Lucas, Senior Consultant