New data privacy laws and misuse of consumer data have made 2018 an interesting year for marketers that rely on third-party data.
Unlike first-party data that is directly collected by whoever uses it, third-party data is information that is collected by a company that doesn’t have a direct relationship with users, e.g. when marketers purchase demographic data from data resellers.
The Interactive Advertising Bureau (IAB) and the Winterberry Group estimate that among US marketers, spend on third-party data increased by 17.5% in 2018 to $19.2 billion.
Is Using Third-Party Data Risky for Marketers?
A June 2018 survey of 255 marketers worldwide by Demandbase and Demand Metric found that four in five respondents were concerned their tech vendors could put them at risk of violating the EU’s General Data Protection Regulation (GDPR), which states that a user’s personal data can be used only if that individual gives a company explicit permission. Companies who violate this law can be fined €20 million ($25.5 million) or 4% of global revenues, depending on whichever is greater.
Researchers from Deloitte and Duke University polled 324 US marketers in August 2018 and found that there was a wide range in how worried marketers were about their third-party data usage raising privacy concerns. Just 10.7% of respondents said they were very worried, while 18.9% said they were not worried at all.