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The Rise of Zero-party Data and Its Importance

We are clearly in the age of consumer empowerment. This was only further cemented when we went into quarantine from COVID-19. To illustrate this point I’ll give you a brief example from my own life. After extensively researching new cars online, leveraging a wealth of information to draw upon, I ended up buying a new car without ever setting foot in the dealership. High-pressure dealer sales tactics weren’t going to work because I could research all the industry and user reviews, competing dealer inventories, and recent sales prices on my terms (i.e., I could take as long as I wanted to gather as much information as I pleased). And for those keeping score at home, they even brought the car to my house for the signing!

The Fall of Third Party Cookies

Most marketers will agree that the paradigm shift from product-centric to customer-centric has been in motion for a while. With companies embracing change at differing speeds, we see a wide array of maturity levels serving up customer-centric programing in the marketplace. Not that companies need more motivation to make the change, but consumers have come to expect meaningful, timely, and personalized interactions. With more company making this shift, it’s now become table stakes within most verticals from buying a car (I can attest), to grocery shopping, or even products like health insurance – check out this light-hearted commercial from Bright Health Insurance and Centura Health.

Along with this change in strategy, third-party cookies were inevitably on their way out for at least a couple reasons. The big headline grabbing one is that the internet browser companies (e.g. FireFox and Safari) want to protect consumer rights and have/will stop supporting them. Less talked about is their innate nature; they’re heavily product-based marketing tools.

I’ll admit, third-party cookies were once an easy-to-use and, initially, effective tool for marketers.

However, when you take a moment to really think about it, third-party cookies are like creepy stalkers. Just because I looked at some sneakers at an online retailer site, doesn’t mean I need to see those same shoes in every banner ad for the rest of my internet life. Besides, I think we can all agree that ‘nagging’ someone to buy your goods or services isn’t exactly the experience you are striving to provide.

Not All Cookies Are The Same

On the bright side, this confluence of events affords us an opportunity to rethink our marketing strategies and tactics, and to do better by our customers. Of course, Google is already working on a third-party cookie replacement called FLoC (Federated Learning of Cohorts). The AdTech space is also trying their hand at an alternative Unified ID based solution. However, in my opinion, your best bet should be to invest in yourself. What I mean is, step up your first- (and zero-) party data game. I’m betting that those who can show true value to consumers in exchange for information will be the winners in this next chapter of marketing.

Undoubtedly, over the last year we’ve all seen a bunch of new requests to place cookies on our computer after visiting a new website. This is an attempt at a fresh beginning for many organizations trying to get first-party web data to replace the fast-food quality marketing that third-party cookies encouraged.

Going Beyond the Cookie

Now, if you take that real-time data and combine it with the first-party information about the customer most companies already have, then you’re starting to cook with fire. I’m talking about all the great information you’ve collected in your CRM (ex. demographics), known users’ past web behavior on your digital properties, transactional histories, plus even responses to emails you’ve sent. More seasoned marketers will easily recognize that this is the type of first-party data that marketing automation tools have been leveraging for years, even decades, to drive more personalized marketing.

What’s ‘Zero’-Party Data?!?!

Collecting first-party information is valuable, but to take your marketing to the next level you’ll need to start building up your zero-party data libraries. For some context, zero-party data is a relatively new term in the industry. I view zero-party data as a special subset of first-party data. More specifically, I define zero-party data to be the information directly collected from consumers for the sole purpose of enhancing their experience with our brands – things like preferences, interests, likes, etc. stemming from questions like:

  • How many people are in their household?

  • Are there certain areas of interest they want to read in your monthly newsletter versus others?

  • Where do they like to vacation?

Let’s pause and think about this whole zero-party data situation for a second. There is a very willing segment of consumers out there who are fully open to giving you even more information about themselves in exchange for a more personalized, and relevant, experience (the exact thing we’re trying to achieve!). I don’t know how this is anything other than a win-win.

The key will be delivering on the value exchange to earn, and then keep their trust.

Collecting Zero-Party Data

As with many things in the field of marketing, there is an art to successfully collecting zero-party data (because for some odd reason most people aren’t too keen on answering laborious 50 question surveys – go figure). So, you may approach things in a progressive manner. You ask a few questions here, a few more on their next interaction, and over time it will add up to fill out your CRM profiles and/or other relevant data stores. Alternatively, based on your business, it may make sense to a have a detailed preference center with options for them to customize the marketing experience at their leisure (preferred channel, frequency of communication, areas of interest, etc.).

Independent of the mechanism by which we collect the zero-party data, it’s clear, if you want to succeed in this current marketing paradigm, you’ll need to be better at establishing trust, collection preference data, and responsibly using it.


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