In the digital age, consumers are more likely to do business with companies that provide personalized experiences. Many retailers and brands use different forms of data to understand and reach their customers to ultimately deliver customized buyer journeys.
Amid evolving data privacy regulations and a heightened awareness of consumer privacy, brands have taken a closer look at the types of data they use. Many that long relied on third-party data in the form of cookies have instead started to invest in first-party or zero-party data. As advertisers work to build strategies built on these informative and more customer-centric forms of data, they might face challenges. However, understanding and properly utilizing these two forms of data is critical for success in the long run.
Most advertisers are familiar with first-party data, but you might be asking yourself: “What is zero-party data? How can I use it to drive more engaging digital experiences?” Forrester defines zero-party data as any information that a customer willingly shares with a brand. In other words, this is data that a customer explicitly provides by submitting a contact form or setting up their account.
On the other hand, first-party data is collected by a brand’s digital channels through digital cookies, website navigation patterns, and application user analytics like heat maps.
Executing on the right zero-party data vs. first-party data balance can be daunting for brands. To help mitigate the strain, we’ve gathered some answers to common questions our customers ask when we advise using zero- and first-party data-based campaigns.
How Does Zero-Party Data Impact Personalized Customer Experiences?
Zero-party data is information that consumers voluntarily and deliberately share with brands. This kind of data is acquired from channels including:
- Social media polls.
- Website activity (such as downloads and online chats).
- Calculators and configurators.
- Customer account profiles.
- Messages or lead generation forms.
- Emails, newsletters, or SMS subscriptions.
Consider this type of data collection as a conversation with consumers to gather important qualitative and quantitative feedback. In these formats, consumers are providing the following relevant information to guide their future buying experiences:
- What kinds of products do they like?
- What is their opinion on your latest product?
- How frequently do they want to hear from brands within a given timeframe?
- What brand updates are they interested in hearing about?
Even personal, non-intrusive information collection is standard with zero-party data, such as:
- Likes and dislikes.
- Ordering and delivery preferences.
- Lifestyle demographics.
These interactions create brand experiences that mirror interactive dialogue rather than delivering the “big brother” targeted ad style that some consumers are turned off by. These non-invasive methods encourage consumers to voice their opinions, further enabling personalized shopping and browsing experiences. If brands demonstrate they hear and value consumer opinions, it makes an advertiser’s job easier when creating effective digital marketing strategies.
Consumers can also voice interest in the ads you present, providing invaluable information enabling your marketing team to deliver personalized experiences.
Zero-Party Data: A Win-Win for Consumers and Brands
Overall, companies and consumers both benefit from zero-party data. It helps many advertisers create personalized experiences while respecting consumer privacy and complying with consumer privacy laws like GDPR and the CPRA.
Zero-party data also helps retailers and brands:
- Create tailored consumer experiences.
- Build and nurture consumer trust.
- Encourage consumers down the sales funnel faster by presenting products they have expressed interest in.
- Retarget campaigns.
- Create personalized, engaging website experiences.
- Effectively segment audiences for email and social campaigns.
- Conduct A/B tests to verify preferences.
- Analyze customer behavior insights such as churn rate.
Two further selling points for using zero-party data in brands and agencies include:
- Creating personalized consumer experiences is every marketer’s goal. Explicitly provided zero-party data clearly outlines a consumer’s preferences, which can contribute to customized experiences and accelerated buyer’s journeys. You can use this data to publish personalized landing pages, promotional pages, product recommendations, and news about new products based on consumers’ enhanced profiles.
- Empowering consumers.Consumers want personalized experiences, yet they still wish to control how brands use their data. Zero-party data empowers consumers to dictate how their information is used. Because this information is obtained with consent, it shouldn’t surprise consumers when they encounter an ad for a product they have expressed interest in.
Zero-party data addresses the sensitive personalization vs. privacy dilemma many marketers struggle with in today’s environment.
Zero-Party Data vs. First-Party Data
While zero-party data is voluntarily given to the brand by the consumer, first-party data is information you passively collect from a consumer’s activity on your website, such as:
- Buying history.
- Demographic info.
- Content subscriptions.
- Campaign responses.
- Browsing data, including time on page, scrolling, and click-through path history.
- Loyalty program membership.
Both forms of data help brands effectively and ethically create personalized experiences. Privacy is an ever-present concern, and many leading brands incorporate how they use each kind of data into their privacy policies.
How Do First-Party Data and Zero-Party Data Differ?
Many confuse zero-party data as a subset of first-party data. The easiest way to differentiate between the two is that zero-party data refers to voluntarily obtained consumer data outside of e-commerce transactions. Consumers provide input by answering direct questions and adding context to social analytics data.
These data types differ in how they are obtained and the insights they contribute to campaigns.
The three biggest differences are:
Consumers voluntarily provide zero-party data, whereas first-party data is collected on a brand’s digital application or website. For example, a consumer might tell an auto parts brandwhich year, make, and model their vehicle is, which can enrich their profile from when they bought windshield wipers six months ago.
- Zero-party data consists of accurate, explicit consumer-provided contributions, while first-party data relies on implicit analysis and user behavior.
- You can build trusted dialogues with consumers by voluntarily exchanging personal data for a tailored buying experience.
Benefits of Using First-Party Data and Zero-Party Data Together
Consumers are increasingly willing to share personal information with brands as long as it is used responsibly to create a better buying experience.
Both zero- and first-party data can be analyzed in tandem to determine what types of ads will appeal to consumers and create hyperpersonalized shopping experiences. Enriched customer profiles enable brands to market effectively to consumers and create better outcomes.
Why Choose Digilant as Your Data-Driven Advertising Partner?
Digilant has a proven record of helping agencies and brands deliver engaging advertising content to their target audience.
Shifting from the much-beloved third-party cookies to campaigns built on first- and zero-party data might seem intimidating or difficult. However, with Digilant, we can help make the process easy and accessible for both you and your customers.
If you’re ready to learn more about how zero-party data can benefit your business, contact us. We will help set up a personalized business strategy that will help you meet your specific advertising needs.