What is third-party data used for in a business context?

Third-party data refers to information collected by an entity that does not have a direct relationship with the data subject, such as customers. In a business context, this data is particularly valuable because it helps organizations expand their databases with additional insights and additional demographics that may not be available through first-party data (data collected directly by the organization) or second-party data (data shared between organizations that have direct relationships).

Utilizing third-party data allows businesses to gain a more comprehensive understanding of their market, customer behavior, and industry trends. It can provide additional layers of analysis that contribute to informed decision-making, marketing strategies, and targeted campaigns, all while adhering to privacy regulations. The critical aspect of following privacy regulations when using third-party data ensures that organizations respect the rights of data subjects, fostering trust and compliance with laws such as GDPR or CCPA. This makes expanding a database with third-party data a strategic move for businesses looking to grow and optimize their data insights responsibly.