Third-party customer data is the most valuable resource in the world right now, and many people weren’t even aware their data was being sold until social media scandals a few years ago. Said scandals included executives from Facebook admitting that user data is sold to external ad firms such as Cambridge Analytica, with ties to mysterious agencies. Conspiracies aside, your data is used in many ways for things like social media ads and cold marketing.
Dynamic Pricing and Insurance Rates
Did you know that your data is shared across common institutions such as banks and insurance companies? Using consumer reports, pricing can be changed dynamically after running a check, and you can have higher or lower rates based on this. But what is a consumer report? A consumer report is a table of data that companies can use to decide how to treat you. This can range from assessing financial risk and even extends to checking your suitability for a job.
Third-Party Customer Data and Social Media
Like 65% of web users, you may click the “reject all” button when tracking banners pop up. However, that doesn’t mean that your data isn’t used at all. For example, you might search for running shoes online and then similar ads begin to show in your social media feeds:
- Ad networks spend a lot of money buying browsing behavior and intent data.
- This enables brands to target you across thousands of sites including social media.
- They do this because targeted ads with intent data have a higher chance of purchase.
Segmented Emails and Promotions
Email isn’t as dead as some people would have you think, and it is in fact one of the most powerful marketing methods around. A successful ad campaign can reach the inboxes of millions of people, and with a 5% reply rate, that’s a lot of potential sales. As such, it makes sense that data such as email addresses are bought and sold, alongside other data types that allow marketers to tailor email ad campaigns to segmented audiences most likely to buy.
Customized Recommendations on eCommerce
You may not know it, but your data has been used to control you for years on eCommerce platforms. If you use sites like Amazon, Wish, and Temu, your historical browsing and purchases are analyzed and repackaged towards your highlights, recommendations, and deals. This is because it makes sense you are more likely to buy something that you have already shown interest in, and this type of algorithm extends beyond eCommerce and into streaming.
Third-Party Customer Data Affects Streaming Channels
Like many today, you may be feeling subscription fatigue from so many streaming services that get worse in quality while hiking prices every six months. Even so, streaming is still popular, and 40% of Gen Z customers stream media channels for 2 hours per day on average. But as if the prices aren’t bad enough, your customer data is used extensively by streaming platforms.
Recommending content
One of the main reasons streaming platforms purport to use your data is to give you the best experience possible based on content recommendations you will like due to previous content.
Targeted advertising
Aside from charging more, you now have to pay extra for ad removal. Streaming platforms use your data to serve ads you are more likely to engage with on behalf of their clients, not you.
Preventing customer churn
Most streaming platforms today have complex algorithms that analyze user behavior to serve content you will enjoy more in the hopes of keeping you a customer for a longer period.
Streaming platforms use your data to enrich their own first-party data. They do this so they can improve targeted ads for their paying ad partners, not to give you a better experience. The whole system of using data is to enable advertisers to target specific demographics for revenue.
Offers Based on Your Geographical Location
Even where you are at the present moment or where you live are data types that can affect how technology interacts with you. Known as Geotargeted advertising, services can use your location to offer personalized promotions based on where you are. For example, you may be on vacation and exploring a quaint seaside town. Trackers can use this data to send limited-time deals to your phone for a nearby restaurant that other people you know won’t have access to.
Search Engine Autocomplete and Results
You probably already know that the internet, even in “free and democratic” countries, is censored to a degree depending on where you are. As such, your location can determine the autocomplete, suggestions, and search results you are served. For example, searching “UK age verification” from within the UK presents positive results about the controversial act. Outside the UK, you are likely to find varying results that also include the negative news stories.
Third-Party Customer Data is Used for Cold Marketing
Although we live in an online age and digital age, cold marketing methods such as telemarketing and direct mail are still popular, with open rates of up to 40% and reply rates of around 5%. This doesn’t sound like much, but third-party data for targeted ads is successful:
- Cold data for B2B marketing is sold to marketers if you have a company or title.
- Data from your job or even personal home is typically sold for lead generation.
- Your status can dictate the type and volume of messaging, such as email.
Cookie Consent and Online Privacy
You will be familiar with cookie options such as banners that are presented when you use a website. There are various cookie consent banners depending on your location, such as the UK and EU GDPR, or California’s CCPA. Most people click reject all or select the ones they agree with. However, there is a lot of data that providing cookie permission gives agencies access to, including the ability to track your online browsing for serving highly targeted advertisements.
Summary
Dynamic pricing and insurance rates are just two common examples of how third-party customer data (your data) affects the digital world around you. Streaming channels can also use your data to serve targeted ads, and agencies can also use cookies to track online behavior.
