When you think of data clean rooms, you likely think of first-party data. First-party data is a powerful asset and rightly gets a lot of attention, and although data clean rooms can enable your first-party data strategies, they are first and foremost about collaborating with partners - brands, media owners, data owners, sponsors, etc. It is through this collaboration that the most exciting opportunities are unleashed: second-party data partnerships.

Why look beyond first-party data?

The advertising industry has run on third-party data for years. Due to a mix of regulatory (like GDPR or CCPA) and technical changes (disappearance of cookies, the emergence of new large channels like CTV or retail media), companies are now starting to build their first-party data assets and strategies. 

This transition to first-party data is a positive change for the industry. However, regardless of where a company is in its data collection journey, first-party data will only ever represent a partial view of its customers and broader audience because the visibility is limited to the direct interactions customers have with the brand. But customers and prospects also interact directly with many other companies. Working with those companies to access their customer knowledge can help brands create a more complete picture of who their customers are and where to find them - this is second-party data.

A Salesforce survey report found in 2022 that creating second-party data agreements ranks third-highest in the list of actions companies are taking to adapt their business to changing privacy regulations (the first two being: improving their data collection and creating a first-party data strategy). The same report found that over 77% of marketers were already using second-party data in their strategies, and we don’t think this number will decrease.  

At InfoSum, we’ve already seen many companies working together on our platform to generate value through direct data relationships. Because data clean rooms are the perfect solution for companies with large datasets to find safe, secure, and compliant monetization opportunities 

But they are also the perfect solution for organizations that:

• Are early in their first-party data journey and don’t have large quantities of data
• Are unable to generate their own first-party data because they lack a direct relationship with their consumers
• Don’t have data with the appropriate legal basis or consent, either because it was collected before regulations changed or for purposes other than marketing and advertising

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Who has second-party data?

The short answer is any company with first-party data, can safely offer it as second-party data.

Companies that are complementary to their audience, for example, sponsors or companies with a similar target audience in other verticals, are all potential second-party consumers of its first-party data (and vice versa). 

CPG brands leveraging retailer data is the prominent example that comes to mind when discussing second-party data - and for good reason.  Retailers sit on a goldmine of data thanks to loyalty programs and the rise in online shopping. These retailers can allow their CPG suppliers to use this high-quality data for targeting and measurement, providing huge value and new monetization opportunities. 

At InfoSum, we’ve also seen really successful and innovative second-party data strategies powered by clean rooms from companies that one wouldn’t necessarily think of as ‘data providers’, such as:

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How do clean rooms and second-party data come together?

Data clean rooms provide a neutral and secure way to monetize second-party data, creating new revenue streams, new partnerships, and high-value strategic opportunities. And for data consumers, data clean rooms allow them to leverage second-party data almost as if it were its own, to generate insights, match with other partners, or power measurement within a private and compliant framework.  

Data clean rooms give data owners:

• Complete control and oversight of how data is used in a second-party context, without having to share or expose raw data or PII directly with the data consumers
• A seamless experience to foster commercial relationships with billing and reporting
• The chance to be easily discovered by companies looking to leverage specific data assets you own
• Monetization opportunities for non-traditional data providers, like brands or media owners

And data consumers:

• Fast and easy discoverability and access to exclusive, non-traditional high-quality data that is not available to competitors in a marketplace
• Support for complex data needs that need multiple data sources to be connected to deliver the right performance
• UI-driven workflows, permissions and instant query results

A final piece of second-party data advice

Having the right data is important, but having the right partner is equally crucial. Data clean rooms and data collaboration is a nascent arena, and brands need trusted partners willing and able to evolve with them as strategies and data needs become more complex. 

We are only scratching the surface of the second-party data opportunity, but one we firmly believe will provide unparalleled value for everyone involved.

Ready to get started on your second-party data journey? Download our second-party data factsheet or reach out and we’ll show just you how quickly you can get started.