Data Basics: Understanding Data for Digital Advertising

Many of us know that there is value in leveraging data in our marketing campaigns but we don’t know where to start.  To unlock the power of data, first we have to understand it.  We have to understand where it comes from, how it was collected and how we can use it.

I will cover basic concepts of data as it applies to digital advertising in the hopes that it can help guide you to ask the right questions and take the next steps to maximizing the use of data for your marketing initiatives.

What is data?

At the very core, data is another word for information, facts or statistics.  As it relates to advertising, it can be a collection of what is known about people and their attributes.  If you dig deeper, that may translate to a piece of information about a person.  Are they a Male or Female?  Knowing that someone is one or the other is a piece of data.

Data is commonly collected through cookies or other unique identifiers.  At a meeting a while back, to demonstrate the idea of data, I brought chocolate chip and sugar cookies.  Each type of cookie had unique identifiers written on them in frosting.   Let’s say you like chocolate chip cookies, so you grab that one.  Well, now that cookie is associated with you, an individual.

Examples of attributes are most commonly known as demographics, device, location, etc.

Who is collecting the data?

This is where we start to understand the types of data.  Understanding your relation to who is collecting the data is what deems data 1st, 2nd, or 3rd party data.

1st party data: You made the chocolate chip cookie yourself

This is data you might be collecting from visitors on your site.  You might drop a cookie on them to understand attributes about them for analysis purposes or retargeting.

2nd party data: Your friend agreed to give you their chocolate chip cookie

This is a lesser-known type of data but it’s when data is shared from one entity to another through an agreement.

3rd party data: You bought the chocolate chip cookie at the store, you had to pick from a number of different brands of similar chocolate chip cookies, all differing in price, packaging and slightly different ingredients.

This data is collected and aggregated by various data providers/sources and sold via advertising platforms to be utilized in campaigns and analysis.

How is it collected?

Now that we understand how to classify data into our relation to it, we want to understand how data is collected.  1st party data is generally collected from pixels on your website and CRM data (and any other offline or online data being tracked).  2nd party data usually collected in a similar way but from a provider who owns it directly.  3rd party data is harder to understand because of our distant relationship to it.

Deterministic: When data providers aggregate their own proprietary data to be resold to advertisers.

Probabilistic: When data providers use models to help scale their data and aggregate to be resold to advertisers.

There’s a big difference between the two.  Deterministic is a much more accurate picture of the data you’re buying.  Probabilistic is a more scalable but a potentially less accurate option. Often times the collection method is not available to the end user.  Not all data is created equally and I cannot express enough how important it is to test, test, test!

How can we use data?

Let’s go back to the chocolate chip cookie example. That cookie contains “ingredients” or attributes like flour, sugar, baking soda, etc.  If you saw a list of the ingredients, you would be able to make assumptions and say, that looks like a chocolate chip cookie.  A smart marketer would know what a chocolate chip cookie needs most, is a glass of milk.

In a real life example, as marketers, we can leverage data to target efficiently and effectively for our campaigns.

Point It About the author
No Comments

Leave a Comment: