We’ve all seen the pop-ups and modules announcing “this site uses cookies!” Around the time Google decided to kill the cookie (and other forms of third-party data tracking), digital marketers frantically started changing the way they collect customer information.
Enter: Zero-Party Data
According to TechCrunch, the latest buzzword in tech is “zero-party data.” Additionally, the elimination of third-party cookies in Google Chrome and Apple’s Safari web browsers indicate a shift away from traditional adtech and the rise of the “trust economy.”
Zero-party data — also known as “trusted data” — is information provided directly and intentionally from a customer. It’s trusted because it comes straight from the source, making it more accurate and reliable (for the most part).
The increase of hacking, data theft, and privacy breaches has made us all wary and more protective of our data. The recent implementation of Apple’s “Ask App Not to Track” is a key indicator that the digital landscape is shifting towards privatized data collection to improve personalization and data security — which is why it’s so important for you to start collect and leveraging your own zero-party data now.
What is Zero-Party Data?
To understand zero-party data, let’s take the holistic approach and understand the full spectrum of user-party data. There are four types of data: third-party, second-party, first-party, and zero-party.
Third-Party Data — Inferred
Data assembled by external (third) parties and sold in data exchanges. Customers generally don’t know that they’re being tracked or that their data is being sold. The information tends to be full of gaps and is not widely trusted. Use of third-party data in marketing can sometimes feel creepy or a little icky (non-technical terms), sowing distrust among customers.
Second-Party Data — Shared
Another brand’s first-party data. What sets second-party data apart from third-party data is the absence of a “middle man.” This data is shared or acquired directly through marketplaces or partnerships from one brand to another. Although this data sharing occurs among more closely associated parties, customers may not know their data is being shared.
First-Party Data — Observed
Data collected directly by a brand via their website, app, or other tools. This data is most often gathered by analytical tools (such as Google Tag Manager) and used in follow-up marketing — including emails, SMS, in-app notifications, and retargeting ads. Customers are generally aware this is happening and have had prior interaction with the brand.
Zero-Party Data — Self-Declared
Data provided by the customer directly to a brand. This exchange is intentional, proactive, and indicative of high engagement. Customers willingly share this information via forms, preference centers, chatbots, surveys, or simple prompts. The expectation associated with zero-party data is that a brand will use the information in a trusted manner.
There’s a fine line between first- and zero-party data. The simplest way to distinguish the two is to associate first-party data with the business and zero-party data with the customer. First-party data is observed information — “We saw you do take this action on our website.” Zero-party data is self-declared information — “You told us you were interested in this product.” A more subtle and meaningful distinction is first-party data demonstrates the what of customer behavior, while zero-party data reveals the why.
Five Benefits of Zero-Party Data
Knowing the four different types of data and what distinguishes them from one another allows us to key-in on the benefits of each. As you “count up” from zero (0, 1, 2, 3) data quantity increases; and a s you “count down” from three (3, 2, 1, 0), data quality increases. Here’s how that quality manifests itself in zero-party data:
1. Build Trust, Earn Loyalty
There are several benefits to collecting zero-party data — chief of which is earning the trust of your customer. When you collect (and protect) a customer’s personal information, you build trust. Over time, as you respect your customers’ data, you may even earn their loyalty.
2. Privacy Compliance
One easy way to build trust and earn loyalty – protect your user’s data. Gathering zero-party data means you have more control over the information you collect, where it’s stored, and how you use it. This makes GDPR and all those privacy acts a little less scary because you know where your data comes from and have permission to use it.
4. Personalized Solutions
With zero-party data, you can develop curated and customizable solutions that cater to the individual customer. A personalized experience makes for a more direct connection with your brand, leading to more engagement.
3. Data Accuracy
When you offer personalized solutions, it’s the the customer’s best interest to provide you with their data — accurate data. An accurate database means you can make informed business decisions about your brand with confidence.
5. It’s Free!
Apart from the cost of your CRM and data management tools, zero-party data collection is free. You can use surveys, emails, forms, and other tools to attract and collect this information from your customers. The only investment is your curiosity and thoughtfulness.
It’s only a matter of time before zero-party data becomes absolutely necessary for your brand to succeed. We’re already seeing shifts in the digital landscape from web to social that indicate a major change is happening in data management. It takes time to build trust, and in this new trust economy we find ourselves in, it’s important that you start now — not just for your brand, but for your customers, too.
