In this digital age, it’s all about the data. Knowing about it is mandatory. In addition, the knowledge of what second-party data is, how it differs from other types of data (first-party data as well as third-party data) and, most importantly, how and why it’s used is vital in this era of online commerce.


What Is Second-Party Data?

Simply put, second-party data is a collection of data — data that wasn’t collected by you but was instead gleaned from another company. Unlike first-party data, which is collected from a company’s own customers, second-party data is gathered from another company, in many instances, a partner company. In other words, it’s that other company’s first-party data, something that is usually sold to another business.  Second-party data has relevance to the company that uses it, so it differs from third-party data, which is collected by a business that has no direct correlation to either the visitor or customer.


The Importance of Second-Party Data

Like first-party data, second-party data is used to improve your business’s performance. Second-party data does the following:


  • Increases the amount of data your company currently has in its possession
  • Helps you reach new audiences that previously weren’t available to you
  • Adds to your current data, helping you to gain more insight on your customers
  • Increase your customer base, as you have insight on this audience


How Second-Party Data Is Collected

As mentioned earlier, your company’s second-party data is another company’s first-party data. Therefore, the way it’s gathered is the same as with first-party data, only the other company is collecting it. In most instances, it’s gleaned online, which includes the following methods:


  • Online interactions: Probably the typical, not to mention accurate way to acquire data. Often employing website tags, this method delivers a roadmap of how a customer interacts with the brand online. This includes clicks, views, comments and purchase history, along with other online behavior. The end result: insight on who is visiting your site, what links are being clicked, navigation information and what sites they’re going to, after they exit your site.
  • Social media: Much like the online interactions described above, social media behavior delivers a wealth of information about those who follow and interact with you using social media. All clicks, comments, shares and likes, as well as what other pages these customers interact with, can tell volumes about these users.
  • Subscriptions: If your company offers any subscription products, you can easily gain insight from the habits of the subscribers. You’ll be able to analyze the customers who are interested in your company and/or its products.
  • Survey and in-store data: Being able to use data gleaned from the bricks-and-mortar portions of your business and merge it with the eCommerce data can help give you a broader overview of customers’ purchasing behaviors. Similarly, survey data along with customer feedback can also be used and integrated into the previously collected online data.


How Second-Party Data Is Used

Once the second-party data is gathered, it can be used in multiple ways, but the endgame is usually to know its customers better. The result is more personalized and targeted marketing efforts, and by dividing these customers into segments, there is a greater chance these prospects can be converted into customers. Therefore, second-party data can be used to achieve the following.


  • Gain insight: This allows you to get a better grasp on your audience, which enables you to customize your content to match their preferences.
  • Predict behavior: By being able to predict a customer’s behavior, you can deliver razor focused marketing campaigns to these customers (or potential customers).
  • Deliver personalized content: Second-party data gives you the ability to tailor your content and marketing campaigns, making them relevant to your customers.
  • Retarget to your audience: Retargeting is when ads are delivered to prospects who visited your site but haven’t purchased anything.
  • Convert new customers: The ability to find new customers targeting other users — users with similar preferences to those of your current customers.


Security Risks Surrounding Second-Party Data

Naturally, there are all sorts of risks and challenges when it comes to data, and second-party data is no exception. Second-party data is usually classified as business-critical data as well as private information. And because all types of corporate data require a high level of security, data security is based on three rules, which are the following:


  • Availability
  • Integrity
  • Confidentiality


One of the tools that allows this sort of security is a virtual data room (VDR). A VDR is a secure online location, one that allows companies to safely store and share documents and data of all types, including second-party data. Features of a secure VDR include enterprise-level encryption, layers of security, document and version control and permission rights that permit the administrator to allow only certain parties access to specific documents or directories.  All of these features (and more) are the hallmark of a sophisticated VDR.


Where CapLinked Helps the Process

CapLinked, an industry leader in the VDR space, offers online workspaces that are as highly secure as they are simple to use. CapLinked VDRs feature a user-friendly interface that is compatible with every type of OS, which allows users to upload and download documents from any type of computer, tablet or smartphone, from across town or from across the globe. To find out how a CapLinked VDR can securely protect your second-party data, sign up for a free trial at CapLinked today.


Chris Capelle is a technology expert, writer and instructor. For over 25 years, he has worked in the publishing, advertising and consumer products industries.



Indeed – What is Second-Party Data?

HubSpot – A Basic Definition of First Party, Second Party, & Third Party Data

Digiday – What is Second Party Data?