What is Zero-Party Data?

All successful marketing begins with good data — because data drives personalisation, and personalisation drives conversion. 

Types of data

Personalisation strategies have traditionally looked at three types of data to work out interests and intents of consumers.

These three well known types of data are:
> First-party data is any information that is collected through a direct relationship with a consumer.
> Second-party data is data that users are not giving directly, but that brands are obtaining through a direct relationship with another business.
> Third-party data is implicit, often outdated, collected by an entity that doesn’t have a direct relationship with consumers (for example cookies, browsing behaviour, credit score, …).

The problem is that a lot of it is based on inferred and observed data. And we know that assumptions are often wrong.

Another problem is data Privacy.  Following large data breaches governments introduced tighter regulations. We know The General Data Protection Regulation (GDPR) here in Europe and more recently the California Consumer Privacy Act (CCPA) this year.

Following these events Forrester introduced the term zero-party data defined as follows:

“Zero-party data is that which a customer intentionally and proactively shares with a brand. It can include purchase intentions, personal context and how the individual wants the brand to recognize her.”Forrester

Why is zero-party data hot?

As competition grows marketers face increasing pressure to deliver personal experiences to engage.

Zero-party data is considered the most accurate customer data to deliver personalisation at scale because it reflects on current consumer experiences and provides insight into consumer intent. 

Marketers rather than relying on perceived or inferred information are directly asking consumers, who are intentionally and proactively sharing in return. 

Zero-party data is based on concepts of privacy and value.

Consumers are open to share personal data with brands when they receive better experiences. Brands must in exchange be transparent about how they collect and use the data.

Creating engaging experiences that build trust in the way consumer data is used is the best way to drive true personalisation. 

By taking the zero-party data path, marketers build direct relationships with consumers. As a result, marketers better personalise marketing communications and product recommendations.

Value exchange

When collecting zero-party data consumers need to be entertained, engaged, and receive something in return for their attention and personal data. Consumers provide zero-party data as a direct value exchange. 

To motivate consumers to intentionally and proactively share their data marketers can use incentive mechanics such as instant wins, exclusive offers, coupons, gifts, loyalty points, …

Successful zero-party data collection is based on interactive conversations and enables consumers to create their own experience while interacting with the brand.

For marketers to succeed they need to create experiences led by inspiring design and empowered by data and technology. 

Via interactive content (swipe survey, a personality test, game, playful poll or quiz) brands can collect zero-party data. 

For example with a “tinderesque” swipe survey we helped Central England Co-Op collect preferences and interests from their audience.

Together with Paperchase we implemented interactive personality profilers to collect insights from their customers.

By putting consumers in control marketers activate trust and create the most effective way to collect interests, intents and preferences.

With zero-party data, you can identify your highest value customers, develop one-to-one personalisation and maximise lifetime value of your customers. 

In summary

There is a general concern about data quality as inferred and observed data sources are not reliable.

A new type of data called zero-party data emerges. Data that is intentionally and proactively shared with a brand by consumers.

Thanks to zero-party data brands can increase customer satisfaction, improve loyalty, drive advocacy and generate revenue. 

Related Blogs:
Paperchase maximises Pay Day emails with Interactive Experiences
How is Central England Co-Op collecting data
Interactive Customer Profiler

Overview of Zero-Party Data Solution Providers

Marketers can use zero-party data (ZPD) solutions to ask customers for information that’s hard to infer, deliver personalization that isn’t creepy, and gauge how much consumers trust their brand.

Once you’ve developed a ZPD strategy, a diverse set of ZPD vendors that vary by size, functionality, geography, and vertical market focus can help collect this data.

Use this report to understand the value you can expect from a ZPD solution. To access the full report.

How is Self-Declared Data Boosting Targeting?

In 2021, customers are seeing between 6,000 to 10,000 advertisements every day. Knowing how bombarded people are with this type of daily messaging fuels the never-ending mission of companies to find new ways to reach their customers that feel personalized to their needs. No longer can marketers put a single advertisement in magazines or on television and expect to target their ideal audience.

Instead, they need to adopt new strategies and technology to find the right brand messaging to attract more customers. One of the most significant changes marketers need to make is the shift from primarily using Third and Second-party data to incorporate self-declared data with Zero-party data.

 

What Is the Difference Between These Data Sets?

Before incorporating any of this data into your marketing, it’s essential to understand the differences between each type of information. Previously, companies had to rely on three categories of data for their marketing strategies, including:

  • Third-Party Data: This is information that is collected from an external source. Third-party data is pre-collected and available to anyone who wants to purchase it.
  • Second-Party Data: Second-Party data is first-party information that is exchanged from another company to benefit both parties. This data exchange usually works for products that complement each other, such as makeup and makeup cleaner.
  • First-Party Data: First-party data is the information collected directly from your company.

However, these forms of data do not always provide the entire truth on customer’s preferences. The fourth type of data that brands have incorporated that have worked most effectively is self-declared which includes Zero-party data.

 

What Is Self-Declared Data?

Simply put, when a customer proactively or intentionally shares information with a brand, this is considered self-declared data. This data set may include preferences, personal context, how the individual wants to be recognized, or even the purchase intent. Plus, it helps to ensure privacy for your customers by gaining permission before collecting their information. Brands that utilize this opportunity will stay ahead of their competitors by gaining valuable insights into your customer’s preferences and tastes.

 

Targeting with Self-Declared Data

Having this highly individualized data helps companies meet customers’ preferences and demands. Self-declared data can build lasting customer relationships, enhance customer experience, forecast future trends, and even create strong customer personas.

When you can accurately build your customer profile and identify what your customer cares about, you can deliver timely advertisements that will have a higher ROI. For example, through self-declared data for your clothing store, you can learn the type of customers visiting your store. Maybe one of these groups are middle-aged females who love your yoga pants collection. Knowing this critical information ensures you’re not sending them a coupon for something they don’t care about, like men’s jeans.

 

As consumers start to have higher expectations regarding data privacy and brand experiences, marketers will have to reassess how they’re reaching their target audience. Thankfully, self-declared data provides an excellent solution to this ever-growing problem and allows your company to offer a personalized, relevant experience through customer data.

 

That’s the way the cookie crumbles

The vast majority of current web browsers now block third-party cookies or are on their way towards full blocks. This means that online advertisers and analytics firms cannot use browser cookie files anymore to track users as they visit different sites across the internet. The transition away from third-party cookies is causing brands to look at new ways to track visitor online behavior while also maintaining privacy.

First-Party remains

It should be noted that the move away from third-party cookies by the three major web browsers does not mean an end to cookies.

Thanks to Third-Party Cookies entities were able to collect information about consumers without having a direct relationship with them. Sources of third-party data include consumer data brokers, credit reporting agencies, ratings companies, and publicly available records. Most commonly, data vendors aggregate unrelated sources to compile third-party data sets.

First-party cookies, that are placed on a person’s browser when they visit a website owned by a primary company or organization, will still be in place.

Companies will be able to track visitor behavior in terms of where they entered the site, how long they stayed, pages visited, and where they exited. This remains a core and central part of any organization’s data gathering practice and helps them determine how their sites and product offerings should be configured.

Data Privacy Matters

Another major concern for marketers thinking about their data is privacy. Because third-party data comes from an entity without a direct relationship with consumers, it’s the single biggest offender, and it’s coming up more and more in light of the GDPR.

Companies have to obtain consent from consumers to contact them for marketing purposes, share or sell data to third parties, and for any uses that the consumer “would not reasonably expect.” Consent is a must for profiling and segmentation that uses personally identifiable information (PII), automated decision-making, and direct marketing.

In summary

The blocking of third-party cookies is coming, but it’s not completely here yet. The slow crawl to a complete phase-out may seem like a temporary reprieve. In the meantime, companies should devote themselves to building a more mature, robust, and accurate attribution methodology that takes into account the multiple ways customers engage with brands.

To power personalization brands need self-reported data, actively given by consumers. Third-party data won’t give you that as it is taken from publicly available sources and mostly inferred. The opportunity for brands is to engage and get to know their customers better and to build a declared data strategy.

Seasonal vs Always-On

Seasonality planning certainly changed for 2020 which challenged marketers to evolve their thinking, for example Valentine’s Day 2021 a single day dedicated to celebrating love will boost the UK economy by £650m according to the National Retail Federation, this year I suspect there will be a different message, perhaps date nights at home or Online, Self-Love, gifting to those that you’ve not been able to see for a while (Valentine’s Day with Odicci).

Seasonal campaigns will always be in a marketer’s tool kit – Why?….because they work!  However there is also an equal weight on the value of ‘Always-On’ for your customer marketing strategies, leveraging campaign automation around the customer journey. Which starts right at the beginning of the customer lifecycle.

  • How is the customer welcomed and what Zero-Party Data are you collecting?
  • What opportunity do you take to get to know them…remember this is where customer engagement levels will be at a high?
  • What can you do to speed up the first purchase opportunity in a personalised way?
  • At the other end of the spectrum, what tactics can you use to reactivate / re-engage a customer?

The benefits of setting up ‘Always-On’ experiences is that once set up, they simply continue to run, responding to customers at the right time, in the right way, not based on a season, based on your customers timing and behaviour.

Don’t forget about them…use the time saved to constantly review the results and optimise in line with a test and learn approach.

‘Always-On’ Experiences

Here are some ideas of ‘Always-On’ Experiences you can easily setup with the Odicci platform:

  • Swipe to enrich – an engaging way to collect zero party data right at the beginning of the relationship
  • Product Finders – a guided selling application to capture data and point your customers to the right product for them
  • Birthday Campaigns – once you have collected your customer’s date of Birth, set up a Birthday Trigger – treating them to something special in their basket
  • We Miss you – let’s face it, not everyone is going to engage all of the time, so why not introduce a ‘instant win’ mechanic to stimulate engagement