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Zero-Party Data: What it is, how it's different and marketing benefits

We believe there is a good reason why zero-party data is one of the newest terms generating a commotion in the marketing industry.

But is zero party data nothing more than hype? Jargon? A fad phrase?

To be completely honest, we had the same ideas when we first heard the phrase being bandied about a few years ago. However, especially with new developments around user privacy, zero-party data is not some worthless buzzword!

Instead, it's a look at how customer data will be collected in the future and how it may be applied to your marketing.

What Is Zero Party Data?

First-party, second-party, and third-party data have been topics of discussion for a while now. Zero-party data, on the other hand, is a new data type that is receiving attention.

Described as "data that a customer willingly and proactively provides with a brand, which can include preference data, purchase intents, personal context, and how the individual wants the company to know them," zero-party data was first used by Forrester Research.

Data that a customer actively supplies, such as communication preferences or the kinds of information they want to receive, is an example of zero-party data. Another example is interests, where a customer will openly state what they are interested in, such as craft beer, toddler-friendly products, or activities for road trips.

Not everyone agrees that we need another data type, particularly one’s that suggests a customer source that is even more direct. However, with rules and regulations forcing big changes in traditional data approaches that have been so heavily relied on by marketers in the last 15 years, going direct to customers for data is going to be the best way to get the data you need.

In fact, leveraging zero party data to understand your customers offers a more accurate way to provide the same advantages as other data, such as letting you design tailored experiences.

How Does Zero Party Data Differ From First Party Data?

First-party data is essentially information that you obtain directly from your contacts with customers. It might include data on their demographics, past purchases, interactions with your website, email correspondence, phone calls for assistance, customer satisfaction surveys, etc.

It is gathered through consumer purchases, efforts, marketing campaigns, and other similar activities.

Both first party and zero party data is obtained directly from your customers. So, where does the difference lie?

Well, the primary distinction between collecting zero-party data and first-party data is that zero-party data involves directly engaging your audience. First-party data, on the other hand, offers you insights from analytics and user activity.

As valuable as first party data is, it is a passive approach to data collection. For example, when trying to understand user experience a marketer will likely look at customer interactions on your website and perhaps read reviews to see what people think.

Whereas, zero party data would provide direct insights on what the customer thinks of the user experience and what they like and don’t like about it. It is much easier and more accurate to get an understanding of the user experience using the latter example.

Zero Party Data Vs Third Party Data

Third-party data has long reigned supreme in the data world, but zero-party data is posing a serious threat. Brands that want to remain on top of trends should start focusing more on this under-utilised category of data.

Data you obtain from a data aggregator is referred to as third-party data. Instead of gathering data themselves, data aggregators purchase this data from other businesses and combine it into a single dataset. You can think of it as an aggregation of first party data from other businesses. As a result, the data can come from a variety of sources, some big and some tiny, and the audience that the data is intended for isn't necessarily obvious.

Third party data is widely used in advertising campaigns in conjunction with the use of first-party data as opposed to trying to target third parties with new ads. This is often referred to as "lookalike audiences" and is commonly used in eCommerce marketing.

The fact that zero-party data is more reliable than third-party data is one of its main advantages. Customers are more inclined to trust a business with their personal information if they freely share it with them and are aware that the brand will use it. Zero-party data also has the advantage of being more accurate as it comes directly from the customer and isn't heavily relied on inference as with third party data.

Customers provide it directly, thus there is less chance for mistakes or inconsistencies. Zero-party data is also more interesting. It allows brands to develop more individualised customer experiences, which increases engagement rates and customer loyalty.

Where Is Data Heading?

Marketers have largely relied on cookies for tracking and gathering user data online. However, things are changing. Google may have put off blocking third-party cookies from its Chrome browser until 2023, but it still intends to do so.

IOS 14 has already been implemented by Apple and it allows users the option to not have their data tracked/recorded on any app they choose. The implications of this is huge as any user that chooses to not have their data tracked by Facebook also means their data is not being tracked by the Meta Pixel. Meta's pixel is heavily relied on in digital marketing for a lot of data analytics, ad targeting, conversion tracking and much more. You can read more about the impacts the IOS 14 update will have here.

The signs are plain to see: Companies must find a replacement for third-party cookies in order to track and customise user experiences.

Start thinking about different strategies like registering people and learning about their preferences and interests, utilising progressive profiling to gradually expand your customer database, producing highly targeted advertising on Facebook, LinkedIn, and other social media platforms, and contextual advertising.

How To Collect Zero Party Data

Easy to use no-code tools make it easy for brands to collect zero-party data. Tools such as quizzes, surveys, calculators, forms, and more, makes it simple for brands to obtain zero-party data. We live in a time when non-technical staff members may easily and effectively gather data from their clients.

Take Bazar’s customer insights app for example. All you have to do is download the app and embed the code. Any member of staff, technical or non-technical is able to do this. Once installed, the app makes it simple for customers to provide you whatever zero-party data you require. The great thing about zero-party data is you have the flexibility to gain whatever insights are most relevant to you as a brand:

  • Thinking of launching a new product? Ask your customers what they think of the flavour/name/price.

  • Having trouble targeting the right audience with social media ads? Find out what social media platforms your customers are using most and what interests they have.

  • Want to understand how your brand holds up against larger competitors? Ask your customers about their brand affiliation and what they like in your brand that larger incumbents don't do.

With Bazar, you have access to all this data through an admin dashboard and with the option to download the data to an Excel doc, it is easy to add Bazar analytics to any dashboards you may already have. You can find out more about Bazar’s customer insights app here.

Stay Ahead Of The Curve

Zero-party data is not only for major brands. Direct client data collection is advantageous for any firm. Businesses of all sizes can collect data that is dependable, accurate, and interesting by employing interactive funnels at every stage of the customer journey.

In the past, gathering zero-party data was done through tedious manual procedures, tracking, and data input. Now, it is as simple as downloading an app such as Bazar and getting everything you need automatically.

Consumers interact with companies online more than ever in the post-pandemic environment. The demand for accurate and compliant zero-party data will increase as the number of devices (and interactions) rises.

There is a reason Forbes wrote an article stating that ‘Zero Party Data is the New Oil”. The fall of third party data and user tracking is taking place right now. “Data being the new oil” with respect to digital marketing and eCommerce will no longer be a thing as access to that data will be much more limited.

It is important for digital marketers to start thinking about incorporating zero-party data into their marketing strategies now. Unlike third party data, it isn’t handed to you on a plate.

Zero party data is collected over time, and to truly stay ahead of the curve, marketers will need to proactively keep their zero party data up to date so they can have a continuous understanding of their customers and any changes in trends.

It will take more effort. It will take time. But, those that start taking advantage of zero party data now will find themselves leaps and bounds above their competitors when the true impact of the impending limits on third party data and user tracking take place.



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