Expert Roundup II on Personalization and Zero-Party Data

Street Fight’s theme this month is personalization and data parties: a current obsession of adtech players as well as the advertisers they serve. Businesses are figuring out how to provide relevant experiences to customers online with comparatively little data at their disposal; we’re here to cover the evolution of their struggle.

To wit, four industry thought leaders sound off on those topics below. If you like this post, check out the first expert roundup on personalization and zero-party data.

Stewart Barrett, Head of Growth, Upflowy

Customers have become empowered recently when it comes to third-party data tracking. With Apple’s iOS 14.5 update, a standout feature was App Tracking Transparency. This feature meant that any application on your phone would have to ask if you consent to share the application data with third parties. Apple is leading the way, but Google has also announced they will be blocking third-party cookies in 2023. 

Many marketers are becoming nervous. A customer is more than happy to be greeted with their own name — but only when they’ve given that information already in good faith. 

Personalization will be a challenge for many businesses as they lose the ease of third-party data tracking. This gives rise to the value of zero-party data, the data given to an organization directly. 

The trust and transparency of zero-party data will be the key to helping businesses create personalized experiences in the coming years. Marketers will no longer be able to maintain a perfect retargeting strategy based on expressed intent. Copy and messaging will return as the most important feature of marketing as timing and audience will be much harder to quantify. 

The practice of personalization will be important after a potential lead interacts with your company or brand through a web experience like a sign-up flow or contact form. To create a truly engaging experience when it comes to the final stages of the funnel, the customer must be reinforced about the decision they’re making. Opportunities arise to tell stories about the brand, push the original motivator that brought them to the site, or provide additional sales messaging to drive home the sale.

Peter Messana, CEO, Searchspring

Ecommerce personalization is the presentation of a unique experience to each shopper based on a combination of who they are, what they’re doing, and where they’re located. This variation of the user experience is based on analysis of the shopper’s past behavior, current intent, and a comparison to other shoppers who have similar attributes or behaviors.

Personalization is becoming more of an expected practice that shoppers value, rather than a “nice-to-have” addition. It is also becoming easier to deploy with better reporting on results and more subtlety of control by ecommerce managers and merchandisers.

However, due to an increased focus on privacy, it has become critical for personalization practices to be ‘in the open.’ Shoppers generally appreciate personalization when it is tied to a better experience, making it easier to find the things they are looking for or to discover relevant products and content that they didn’t know about. Conversely, a user experience that seems to be tracking them without providing direct benefits will be considered creepy and unwanted and can leave the shopper with a negative impression.

For example, counter-productive personalization could involve an app that tracks the user’s location even though location data is not relevant to the user experience. This could also be when a user is shown an advertisement for a product they already bought or only briefly looked at that was not related to their normal shopping behavior. From a nuts-and-bolts perspective, it is important for all data collection processes to accept and respect do-not-track or forget-me requests.

Personalization will continue to be critical to the ecommerce experience. Yet as customers become more aware of how their data is being used, retailers must ensure the benefits of the data grab are worthwhile and the means of procurement are understood and accepted by the shopper.

Shekar Raman, CEO and Co-founder, Birdzi

As retailers developed engaging e-commerce sessions that could serve as a substitute for in-store experiences, personalization became critical for fostering connections with shoppers. And this personalization required data and lots of it. 

Now, the personalized world that retailers have created is expected to go through another transformation as third-party cookies die out and shoppers change their tune about data privacy. To receive the critical data and insights needed to understand shopper behavior, without giving the customer cause for concern, retailers can focus on developing new ways to earn data. 

Zero-party data is more than just a buzzword — it’s the future of personalization. First-party data is transactional and gathered through a shopper’s previous interactions with the retailer. With zero-party data, shoppers must opt-in and fill out a customer profile with their preferences. This gives the customer a chance to input their opinions before they ever make a purchase and retailers can ask specific questions of the shopper, without having to make inferences based on potential patterns. This self-reported data has its flaws ,as customers oftentimes do not understand the nuances of their own shopper journey. For example, they may say they are interested in the lowest price range but are actually open to a middle-tier cost.

As a result, the best retailers will use a combination of first- and zero-party data to build a customer profile that is as complex as the shopper themselves. This can be done through a customer intelligence platform (CIP). A CIP links multiple data points across disparate sources and derives relevant insights to help retailers better understand each customer’s behavior, enabling personalization and enhanced customer experiences. No matter how retailers get their data, the power of customer insights cannot be understated and will continue to drive success for retailers for years to come.

Alex Campbell, CIO and Co-founder, Vibes

Personalization is more than just knowing someone’s name, address, or phone number. It’s about how brands use that data to create an exceptional experience that is relevant and valuable for the customer throughout the entire journey. According to McKinsey, 71% of consumers expect companies to deliver personalized interactions. Companies that excel at personalization generate 40% more revenue from these activities than average players. 

Marketers must respect that when a consumer provides personal information, they expect to not only receive a more valuable customer experience but also that their information won’t be shared with other parties. The attention to data privacy stemming from Apple’s privacy changes is shining a light on this critical issue. If marketers abuse the use of consumers’ data, they will ultimately lose customer trust and the ability to engage with them. Customers will only give their personal data to brands if they communicate with them in a respectful way. 

The data that is collected directly from the customer, known as zero-party data, is an incredibly accurate way of understanding consumer preferences and applying them to personalized messages and recommendations. Zero-party data can be sourced using permission-oriented channels with strict compliance like mobile messaging and mobile wallets. This is a powerful way to create authentic, trusted relationships with customers. At the same time, third-party data will continue to hold value, helping brands find and target new customers. The various kinds of customer data are all key to pushing timely, relevant, personalized content to consumers.