What Is Zero-Party Data and Why Does It Matter in 2022?

2021 revealed an incredible amount of market-displacing updates in the world of data and how it is stored and shared online.

From the iOS 14 and 15 updates through to advancements in GDPR policy and CCPA policy both stateside and abroad, the data realm is undergoing an evolution and online marketers everywhere have to keep their wits about them in order to have a sound and compliant approach to data management moving forward.

In this article, I am going to break down what the different tiers of data are, why they have mattered historically, and why zero-party data is THE most critical type of data for you to both protect and perpetuate in 2022 and beyond.

Let’s start with some definitions around zero-party, first-party, and third-party data.

 

Zero-party data – A term coined by Forrester Research, is defined this way: “Zero-party data is that which a customer intentionally and proactively shares with a brand. It can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize [them].” Zero-party data is explicit data, as the user clearly understands that they are voluntarily giving you personally identifiable information about themselves.

First-party data – The data that you learn from a user as they browse and interact with your digital assets, whether that interaction is site-wide, app-wide, or on-page. Analytics platforms like Google Analytics sit “behind the scenes” and track a user’s behavior–and this behavior goes beyond just what the user clicks on, but also tracks and reports on how they scroll, hover and dwell. Of course, any transactional events like the purchase of a product is included in first-party data, too. All in all, first-party data enlightens us directionally towards a user’s intentions.

Third-party data- is the most complex of the data sets. Third-party data is essentially the zero-party and first-party data of other sites and apps where the owners of those sites and apps will then sell that data back to another party for monetary gain–most typically in the form of advertising. This sort of data tends to be demographic, firmographic, or psychographic, and has widely been used in the digital marketing space as one of THE leading ways to find and connect you with your target customers online.

Of all the data types, zero-party data is the goldmine.

As strong regulation comes into play around the dispersal and sharing of a user’s data online, even if done so anonymously, those who have troves of zero-party data on their target audience will no longer depend on other partners to infer what it is that their customers want or need.

The data independence that a zero-party strategy enables is THE SINGLE UNLOCK to winning online in the near and distant future.

And, here’s why.

Trust is eroding online at an alarming rate. If trust is placing confidence in the honesty of another, then the world is less trusting now that it has ever been. Think about all of the institutions that have in some way, shape or form that have been questioned just in the last two years.

 

Big Tech. Medicine. Government. Big Pharma. The Media. The Banks. I could go on.

And, I am not here to make an argument for or against one side or the other on any of those institutions.

I am here to implore you to have a commitment to developing a solid zero-party data strategy moving forward, so that you can actually gain trust with your target market while all the other players are burning it at an unprecedented clip.

With the heightened awareness and focus on data privacy, mixed with the cookieless world we are all stepping into, those who engage their users with a zero-party data strategy will win in the world of personalization.

Think about it. If your data set is rich with freely volunteered data, think about how customized you can begin to make every aspect of your digital marketing online.

Personalized landing pages? Check.

Ads that use your target persona’s words? Check.

Products that meet felt needs with unmatched efficiency? Check.

It’s hard to see a world where using zero-party data as the de facto standard for online experiences makes matters worse than the third-party derived version we have all lived in for the last decade plus, and plenty of reasons to imagine a much better world.

So, if zero-party data is the great unlock, then what do you need to do about it?

Have you ever heard of the first-mover advantage? The window to be one of those has not closed yet.

Here are some ideas on how you can position your online brand well to make sure you are capturing zero-party data well and instilling loads of trust along the way.

• Use your privacy policy as a competitive advantage. Rather than doing the minimum requirement of the law, lean into the new expectations around privacy online. Openly link to your privacy policy. Create content for your list around all of the precautions and measures you are taking to ensure the safety of their data.
• Invest in sound Q&A with your target avatar via quizzes, surveys, and assessments. Leaning into zero-party data means investing in different lead magnets and tripwires. By using solid question techniques, you can learn so much about your target audience. You may even be surprised at all they share when you ask open-ended questions.
• Use micro-audiences on your paid media powered by the zero-party infrastructure. Once you have built some micro-audiences using your quizzes and assessments, load those audiences back in as smaller, seed audiences into platforms like Facebook and Google. Now, you can create hyper-personalized content for your target audience.
• Create customer testimonials that meet those commonly shared “zero-party data points” to make your marketing soar. What better way to show your customer that you are paying attention to them but then to have someone who looks, sounds, and feels very similar to them showing up in their feed. It is always more effective for your customers to sell to your prospects than it is for you to.

Hopefully, you now understand not only the differences in definitions between zero-party data, first-party data, and third-party data, but also the varying degrees of power and accuracy that zero-party data has over the others.

There is no more critical aspect of winning in the Web 3.0 world than having a sound zero-party data approach.

And, if you ever need it , we are always here to help.

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