What if I told you racial, ethnic and gender “only” data based decisions will become less relevant for determining growth and value creation outcomes (follow my claim below)?

To understand the claim, you have to understand the history of data collection and why all data is not created equally.

The first and now largest collection of data, the 1790 United States (US) Census marked the beginning of data collected based on race, ethnicity and gender.  The original intent of the 1790 US Census was to count residents and property (the enslaved), then allocate political power and determine state shares for federal taxes.

The US Census methodology for value creation has informed how industries were created, industry policy and research associations. Since 1790 data collection has significantly changed with how data is now collected.  U.S. Census data is primarily collected through direct responses from individuals and businesses, but it is supplemented by third-party and administrative data from other government agencies and commercial entities. Why is this important to understand?

For brands and businesses, this is considered third party data.  Third party data is aggregated and purchased from external brokers who have no direct relationship with the consumers in the dataset. It is widely used for broad audience targeting but often lacks accuracy.  It is the least valuable data.

Today the US Census is widely used to supplement or function as an input for what we call data models or algorithms. It is one one of the US Census is one of the most reliable data sources because of the historical context. This will not go away, however it will become less relevant for making decisions.

As it relates to our content series on value creation.  Under the Total Market Industry Vertical, the business case is made for how brands are better positioned to future proof their business using 2nd party and 1st party data sources. Coming up in articles six and seven, we discuss the pros and cons of the Total Market Industry Vertical, respectively.

Because of the advancement of technology like the internet and the mobile phone, the ability to source data directly from users and consumers has been a game changer.

In the mid 1970s, the invention of what we call second party data took off with the induction of Universal Product Code (UPC).  For grocery stores, this became a mechanism for collecting data about their customer’s shopping preferences.  Grocery stores took that “first-party” data and sold it for brand partners.  When the internet came and the use of “cookies” the era of second party data took off and many website store owners sold this data to advertisers for better targeting.  Although better accuracy and wider breadth of consumer insights and understanding, it is less valuable data.

The most valuable data is first party data. It is collected directly from its own audience, including customers, site visitors, and social media followers. It is the “gold standard” of data collection because it originates from a direct relationship with customers and without intermediaries.  The data is highly accurate, reliable, and relevant to the business. Whereas the general market and multicultural market industry verticals are not the most modern value creation models.

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Jeffrey L. Bowman is the CEO and founder of Reframe Consulting Services, award winning author of Reframe The Marketplace:  The Total Market Approach To Reaching The New Majority and The Reframe Marketplace Change Guide Book For Growth Acceleration.