Zero-party data: A guide for marketers
Cookies are losing their sweetness. Google’s third-party cookie ban on Chrome is rolling out from early 2024, and have already been blocked by Apple, Microsoft and Mozilla.
This poses a big problem for brands. The answer? Collecting zero-party data.
In this article:
- What is zero-party data?
- How it can help brands
What is zero-party data?
Data falls into four categories: zero-party data, first-party data, second-party data and third-party data.
Zero-party data is data that a consumer actively chooses to share with a brand. For example, if a customer fills out a survey or questionnaire, the answers that are collected are zero-party data. A consumer has made the active decision to give information about themselves to a brand.
First-party data is the term used to describe information that a company directly collects from consumers. Now, while this would also describe zero-party data, the difference between first-party data and zero-party data is the level of consumer intention involved.
With zero-party data, consumers actively choose to share their information whereas this is not the case with first-party data. First-party data is information that has been collected about consumers without explicitly seeking answers from them.
For instance, analytics from a brand’s social media account would be first-party data, as well as information about user behaviour on their website. Data in a brand’s CRM and from subscription-based emails would also be first-party data.
Then there’s second-party data. This is first-party data that another brand or company owns, that they privately share with you. For example, brands who are working in a partnership together may share their data as this helps them both better understand consumers. Or a brand may approach another organisation to buy their first-party data: this can be done through data marketplaces.
Finally, there’s third-party data. This is data collected about consumers by a company that doesn’t have a direct relationship with them. Brands can purchase third-party data from data aggregators, who collect data from a variety of sources, and use this to support their first-party data insights.
Third-party data can give brands details on consumer behaviours and characteristics such as age, gender, purchasing behaviour and life events.
Cookies are tracking codes that collect user data and you can have both first-party and third-party cookies. The difference is third-party cookies are placed on a website by a company that is not the website owner.
As third-party cookies are phased out by all major browsers, zero-party data is becoming increasingly important to brands. Not only will it help businesses survive this shift, it helps build a healthier data relationship between businesses and customers at a time when consumers are growing more vigilant about their data.
According to EY’s 2020 Global Consumer Privacy Study, 54% of the consumers surveyed said COVID-19 had made them more aware of the personal data they share. And recent research from PwC found that 83% of consumers say they want more control over their own data.
How can zero-party data help brands?
Zero-party data therefore gives brands all the benefits of third-party cookie data whilst developing brand trust by giving consumers greater control over the information they share.
With the learnings from questionnaires, brands are able to glean valuable insights about consumer behaviour that can be fed into product development, packaging design and marketing campaigns.
But it’s not just about the benefits to businesses. This data can be used to hyper-personalise the customer journey so consumers are only presented with the products most relevant to their needs and their time isn’t being wasted with irrelevant ads. Consumer’s zero-party data allows brands to offer them personalised recommendations and improve their overall user experience.
Of course, this, in turn, drives product sales by better matching customers with the products they’re most interested in and making the customer journey smoother. And it helps cultivate brand loyalty as personalisation develops a one-on-one relationship between brand and consumer and customers feel uniquely heard and valued by a business.
Want to learn more about collecting zero-party data with Odore? Book a demo.