With the perks of ease and reliability, third party data comes with challenges that aren’t that easy to overcome.
Sometimes, in the list of data used by marketers, the third-party data takes a critical place. As said, “third-party data” has its own unique challenges that can render marketing campaigns ineffective! Yes, the repercussions are there.
Third party data is perfect like phrase, “With Great Power Comes Great Responsibilities“. Again, it too has got some challenges as well and what are those? Let’s see!
1. Data Quality and Accuracy
One primary challenge associated with third party data in b2b marketing is its quality and accuracy level. All these problems are usually accompanied by inconsistency and inaccuracy if at all they involve multiple sources. As result, outdated or incorrect information can occur thereby adversely affecting marketing efforts.
Mitigation Strategies:
- Data Verification: You should have strong data verification functions to cross-check your own first-party data against third-party data’s accuracy.
- Reputable Vendors: Efficient partners are necessary for such vendors whose stringent measures maintain high standards of their data.
- Regular Audits: Routine audits on third-party data help in early detection of mistakes or inconsistencies.
2. Concerns about Privacy and Compliance
Privacy and compliance have become crucial in today’s world with developments such as the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA). To avoid getting sued, sticking to these regulations is important when using third party data while still maintaining the trust of customers.
For your knowledge, over 6.41 million data records were breached worldwide in the first quarter of 2023.
Mitigation Strategies:
- Compliance Checks; Ensure all privacy laws and relevant regulations are followed by all third-party data providers.
- Transparent Practices; Publicly let people know how you collect data from them or obtain explicit consent as may be required.
- Data Anonymization; Aim to reduce privacy risks by using anonymous data where possible.
3. Integration Challenges
The integration of third-party data into existing systems and platforms can be intricate and time-consuming. Lack of compatibility between the different formats of data and systems often results in issues during integration which delays marketing operations thereby making them inefficient.
Mitigation Strategies:
- Standardization: Standardize data formats and protocols so that integration can happen more smoothly.
- API Utilization: Streamline the process of integrating data through Application Programming Interfaces (APIs).
- Collaboration: Engage closely with IT and Data teams to ensure smooth integration of third-party information.
4. Data Overload
The third-party data available is simply overwhelming, due to its huge volume. Consequently, without the right tools for data management and analysis, marketers may find it difficult to get insights that can help them take action from the enormous information at their disposal.
Mitigation Strategies:
- Data Management Tools: Invest in advanced data management and analytics tools as a way of facilitating efficient processing and analyzing of large datasets.
- Focused Data Collection: Prioritize on collecting only relevant data for your marketing goals.
- Data Segmentation: Break down the data into manageable subsets which can be more directed during analysis.
5. Cost Implications
Acquiring topnotch third party data does not come cheaply. For many B2B companies, buying and maintaining third party data is a significant drain on marketing budgets especially when one considers that fresh updated information will always be required.
Mitigation Strategies:
- Cost-Benefit Analysis: Conduct rigorous analysis of costs and benefits to justify investment in third-party data.
- Negotiation: Engage in discussions with service providers so as to get better rates or bundled services.
- Alternatives: Other sources worth exploring include partnerships or other arrangements for pooling resources together thereby reducing costs within an organization.
