Why you should share your data with your competitors
You have been reading about second-party data in digital advertising for a number of years now and how it's not as good as first-party data, but is more reliable than third-party data. But here's the thing, we keep reading that second-party data shouldn't be shared with industries within your segment or with your direct competitors, but why? As long as the data is anonymized and is shared on a secure neutral platform then everyone wins. You as a marketer are getting clean reliable data on consumers like your own first-party data, but at a much larger scale because this data is coming from ecommerce sites within your vertical. Plus, you still have control of your first-party data. By being in a data cooperative, understand that while you are sharing your data with other ecommerce businesses similar to yours, they are not capturing personally-identifiable information (PII) on this data.
How do you shop in a mall?
It's your anniversary in a couple of weeks and you decide to jump in the car and head on over to the shopping mall in your area and look for a gift for your wife. You're a typical guy with little to no clue on what to get your better half, but you know some tasteful jewelry is the direction to go. You first hit the big department stores (Macy's, Bloomingdales, etc.) and peruse their jewelry sections and are intrigued with a few pieces, but are not willing to throw down the Amex just yet. You then go to Kay Jewelers, Helzberg Diamonds and finally Zales. After grabbing a Wetzel's pretzel and gulp down their delicious ice cold lemonade (yummy!), you sit down and go over in your mind all the fine rings, necklaces and earrings you have looked at in all of these stores. You go back to Helzberg Diamonds, pick up those matching earrings and tennis bracelet you liked so much and back to the homestead you head.
What just happened?
You were a shopper who went to five different stores before you finally made a purchase. In essence, you were a piece of data that was shared by 5 different sites (stores). Maybe you went to Macy's first because it is a big brand name or perhaps you received some sort of a flyer in the mail on a sale they were having this weekend (you received this flyer because either you or your wife bought something from Macy's in the past and are now in their database - you are Macy's first-party data). But you left Macy's without making a purchase and schlepped around the mall for a couple more hours looking high and low for the perfect anniversary gift.
Why would Macy's, which is a name brand store, put itself in a mall knowing full well that all their first-party data (people who they sent their flyer to) may end up going to another store to make a purchase on a brand/product it carries? Simple, because Macy's wants to have a crack at other store's first-party data (for example, people who were emailed about a store-wide sale at Zales). And that's why you should be wanting to be part of a data co-op like Hivewyre.
We have been building a virtual mall for you by having many different ecommerce sites in various verticals within our co-op. By being a store in our virtual mall, you are getting access to all of this "foot traffic" (second-party data) that is looking for products that you sell. And if you are, for example, an ecommerce jewelry store, we put your site in front of your competitor's shoppers, the moment those consumers leave it's site without making a purchase.
The second-party data math
So, if you're an ecommerce site with your average 2-3% conversion rate (source: Internet Retailer), that means 97-98% are not converting. Why then are some of you digital marketers for ecommerce sites so hesitant to share your data with others when the vast majority of the consumers on your site aren't converting for you?
Simple math: Your ecommerce site currently has 10,000 MUVs (monthly unique visitors), which means you would be converting 200-300 consumers per month. If the average consumer purchase is $200, then your ecommerce site is bringing in $40,000 to $60,000 per month. Now if you were in a co-op like HIvewyre's and shared your data with ecommerce sites within your segment you would have access to thousands and even millions of unique visitors, depending on your vertical. Let's say because you had access to many more uniques your MUVs go up to 12,000. That means you would be converting 240-360 consumers in a month, which would gross you $48,000 to $72,000. This equates to a 20% jump in monthly sales.
Our co-op is calling
Understand, while second-party data is all we do here at Hivewyre, we are not saying in the least that you should only be using second-party data for your marketing and advertising strategy. We feel we provide a very unique and pivotal piece to your marketing efforts. Realize, while we will help your ROAS, we are truly a top-of-funnel marketing source for your ecommerce business. Reach out to us today to see how Hivewyre can help your business grow.