Are data privacy regulations and the demand for transparency effecting how brands buy data? New research suggests there has been a huge 1,200% increase in second-party data adoption.
According to a new analysis by Lotame, there has been a 300% increase in second-party data spend year on year
Instead of buying third-party data, which is aggregated and from outside sources that aren’t the original owners of that data, more are turning to second-party data. Second-party data is basically someone else’s first-party data. The seller collects data right from their own audience. Brands like buying second-party data because they know exactly where it’s from and that it’s high-quality.
“With our 2nd-Party Data Marketplace, we have built the pipeline to a new era of data connectivity in the digital ecosystem,” said Evgeny Popov, Head of Global Data Solutions at Lotame. “We are making it possible for parties — whether you’re a marketer or a publisher — to connect to transparent datasets directly from the source at global scale. The demand for a partner that can enable that is at a fever pitch and we are excited to meet the opportunity.”
In addition to outstanding yearly growth, Lotame has seen a stunning 300% rise in revenue over the first four months in 2019 alone. In February, Lotame announced a 273% increase in global revenue since 2017, meaning that they have more than quadrupled their growth over the last several months.
“The explosive growth of second-party data also demonstrates the impact privacy regulation — such as GDPR and the CCPA — and transparency needs have had on data strategies,” added Popov. “With the use of second-party data, marketers and publishers gain a much needed sense of security since they know the source and trust the reliability. In a transparency-driven marketplace, data buyers require assurances as to the quality and precision of the data they purchase for campaigns and activations. The key for us is directly connecting data buyers to data sellers, so they know exactly where their data is coming from, how it is being sourced and can then ensure high-quality data at scale having direct conversations on needs and expectations.”
The upward trend towards second-party data also presents a new revenue stream for publishers and brands. Late last year, Lotame conducted research that found one-third of brands and publishers are actively creating new monetization opportunities by becoming second-party data sellers, leveraging the demand for data quality for their benefit. In the recent report, The Forrester Wave™: Data Management Platforms, Q2 2019, analysts recommended Lotame for publishers who want to “monetize their first-party data and use audience insights to customize new content or products,” as well as for marketers who want to “forge direct relationships with publishers or other advertisers.”
In response to its rapid growth, today, Lotame has also announced that it has tapped Aruna Paramasivam to serve as GM of Global Data Marketplace, a new role within the company. Paramasivam is recognized as a data expert in the advertising industry and joins Lotame after serving in roles such as Head of Data Acquisition & Partnerships at L’Oréal and Head of Audience Partnerships at MediaMath. She also spent several years at Yahoo working in audience platform implementation roles. Paramasivam will be overseeing global data acquisition efforts to balance market demands, and primarily focusing on niche and specialized data sets that provide high data quality at scale.
“As privacy regulation continues to spread and marketers increasingly require transparency, we’re seeing savvy publishers with trusted first-party data advantages,” said Paramasivam. “Challenged to compete against the duopoly, publishers are leveraging this demand for high-quality audience data to monetize their own first-party data. Clearly, the benefits of second-party data are resonating with marketers and publishers alike and we expect this number to only continue to increase in the coming years.”
Paramasivam continued, “Brands like Lonely Planet and eDreams are participating in Lotame’s 2nd-Party Data Marketplace and leveraging their core travel expertise to create specific and coveted travel audiences based on searches, purchases and research activity through their own sites. Being a data seller, Lotame also has the ability to educate its sellers and match them with the appropriate data buyers. For instance, if a CPG brand client is looking to launch new travel size products, Lotame could connect them with Lonely Planet or eDreams to reach frequent travelers with precision and scale, facilitating the connection, pipes and activation.”
eDreams ODIGEO, one of the world’s largest online travel companies, under its four leading online travel agency brands, eDreams, GOVoyages, Opodo and Travellink, and the metasearch engine liligo.com, provides access to the largest audience of travelers in Europe with 1.7 billion monthly searches on their websites. “Our 261 websites and Apps are a go-to destination for travel-hungry audiences,” says Zaida Salie, Director Media Services at eDreams ODIGEO. “From searches, purchases and research conducted across our sites, we have built one of the most unique travel audience data assets in the world. Lotame’s 2nd-party data marketplace supports us in helping brands reach frequent travelers with greater precision and scale.”
Lotame is heavily investing in capabilities in the area of the global data marketplace and will be making major announcements on its efforts and partners in September, in advance of DMEXCO.