5 Things You Need to Know about Zero-Party Data
Zero-party data, a topic that has been around since former VP and Principal Analyst, Fatemeh Khatibloo of Forrester, coined it as such years ago recently set off a Twitter debate as to whether zero-party data is real or if it’s all just first-party data in disguise. Here are the five things you need to know about zero-party data so you can decide for yourself.
What is zero-party data?
ZPD is data a person willingly and explicitly gives to a brand in a direct exchange of value.
How is it different from first-party data?
ZPD is a subset of first-party data with several important differences. First, the data is not inferred data like behavioral or transactional data. This means that I’m not assuming you like golf because you bought golf balls or clicked on an ad for golf balls. This is often where inferred data goes wrong and brands spend millions retargeting the wrong people. Zero-party data is not inferred, it’s explicit, meaning I told you I like to play golf and the golf balls are for me.
Second, the data is collected transparently — the consumer knows they are providing information to the brand about their preferences, interests and needs with regard to golfing. This is not about tracking user behavior without the user’s knowledge.
Third, zero-party data goes beyond clicks and purchases; it can be transformative in that it is about current and future interests, preferences, and motivations. When used correctly, this is data that you can’t get from anywhere else but asking a consumer directly.
- How much make-up do you usually wear?
- What is your typical cooking routine?
- When do you think you will be comfortable traveling again?
Zero-party data helps you get to the heart of how to connect with consumers based on what matters to them.
How is zero-party data collected?
There are two common ways to collect zero-party data. The first is through user profiles or preference centers. This method can be harder to get consumers to participate in unless there is a high level of interest in that brand. It is also harder to keep accurate as users have no real incentive to go and update their preferences as their needs and interests change.
The second method is through interactive experiences such as product match and personality quizzes, trivia, look books, etc. These engagements can be deployed in any channel and typically get high engagement rates because they are providing the user value back in return for their information. Common forms of value include a product recommendation, a personality assessment, a test of their knowledge, or a piece of content or discount.
This collection process also allows for more accurate data as consumer preferences change faster than ever before. These experiences are easy to update and deploy over and over to keep your customer data as accurate as possible.
How is zero-party data used?
Zero-party data is used in the moment to provide a relevant outcome while the consumer is engaging in the interactive experience, but the data is also used to create more relevant and meaningful post-moment communications.
Here are three common uses of ZPD:
Relevant retargeting: whether in paid advertising or in an email follow-up, instead of retargeting based on an item they may or may not have been interested in, brands are retargeting based on how they may have answered a question in the experience, such as “I prefer red wine.” A brand can then create both a red wine and white wine campaign and know they are targeting a stated preference of the user.
Accurate audience targeting: as social platform targeting data continues to deteriorate due to Apple and Google privacy changes, brands are using their zero-party data to create look-alike audiences that are proving to drive higher engagement and ROI.
Segmentation and insights: Brands are feeding their zero-party data into their ESP’s, DMPs, CDPs, CRM, etc., in order to improve their segmentation strategies and improve their customer journeys.
Why is zero-party data important?
There are three important reasons why ZPD is important.
As the industry grapples with the ever evolving changes in data regulation and privacy changes, brands need to focus on building their own first-party data assets in order to drive omnichannel marketing and personalization strategies.
Brands are also focused on trust and transparency, which is hard to achieve if consumers are getting “personalized” communications but do not know how the data was captured in order to create those personalized communications.
Lastly, and this is more about how you collect it then the data itself, the fight for consumer attention in digital is getting increasingly difficult with the rise of ecommerce. The battle for attention can be won through better and more engaging consumer experiences. Delivering value to the consumer in exchange for their time, attention, email address, interests, etc drives higher engagement across industries and channels.
What’s your verdict? Is zero-party data real or do you still see it as just first-party data?
Pam Erlichman is CMO of Jebbit.