What is zero-party data?
Cookies, cookies everywhere! Every child’s dream (and, let’s be honest, probably most adults’ too) – a landscape of never ending cookies. Sorry to burst that sweet bubble, but we’re not here to talk about the butter and sugar kind of cookies. We’re instead going to be talking about the most popular buzzwords to come out of the digital marketing ecosystem in the last couple of years: zero-party data, first-party cookies, third-party cookies and data collection strategies. We’re going to take a look at what they actually mean and why they’re going to shape the future of the digital world.
So what is ‘zero-party data’? And why does it hold such a key importance in the future cookieless world? Zero-party data offers an innovative solution in the cookieless online landscape and an excellent alternative to the currently available cookies. It is information that is hard to infer or buy from a user, in other words it is information that a customer freely shares with a company. Forrester defined it in their 2021 report “Now Tech: Zero-party data solutions” as:
“Data that a customer intentionally and proactively shares with a company.”
Google has recently announced that they won’t be phasing out their support of third-party cookies in Chrome until the end of 2023, so a year later than originally planned. They had initially said that they would be implementing this seismic change in the online landscape by the end of 2022 but have explained their rescheduled cut-off date by saying that the ecosystem needs more time to get it right. They are confident that progress has been made, but they need to move at a responsible pace to ensure that the best interests of all parties involved are taken into account.
In the past, in an attempt to avoid the use of third-party cookies, brands have sometimes relied on inferring customer intent from their online behaviour. But coupled with the low accuracy rate of third-party data, it’s far from being an exact science. Enter our friend zero-party data, who can provide companies with the data they need, whilst ensuring the user is happy about how it was acquired and how it will be used. At Qualifio we are increasingly seeing that the brands that we work with, such as L’Oréal, DPG Media Services, Purina and Unilever are aware of the importance of putting a data collection strategy in place.
What are first-party and third-party cookies?
Before we dive into the cookie jar looking for the golden ticket of zero-party data, let me take you on a quick trip down memory lane to remind ourselves what cookies are, and where they came from.
A cookie is a small piece of code, a text file, that is stored in a user’s browser when they visit a website, it tracks the user’s movements on that website, collecting their basic background data. There are 2 main types of cookies: first-party cookies, that collect data that is then only accessible to the website visited by the user; and third-party cookies, that are shared between web domains, allowing advertisers and social media networks to target the adverts a user sees based on the webpages they’ve recently visited.
But where do cookies come from?
And why have they been making the headlines so much in the past few years? Website cookies were invented back in 1994 by Lou Montulli, one of the pioneers of the internet, when he was trying to help websites to gain some visibility on who was visiting them, as there were previously no mechanisms in place for collecting this information. So before cookies, websites were basically deaf and blind, and completely disconnected from the users. Cookies in themselves have never posed any kind of threat, but their use has become increasingly problematic, especially third-party cookies, as consumers’ awareness of their online privacy has increased, and they are now more concerned about how their data is stored and shared.
The pro-user privacy movement really started bubbling a few years ago with the rapid expansion of the digital world and its increasing presence in our lives, and has lead to major legal shifts in the online ecosystem across the globe, such as the GDPR (General Data Protection Regulation) that came into force in Europe in May 2018 and regulates the collection and processing of personal information in the EU, or the CCPA (California Consumer Privacy Act) that was introduced in January 2018, and is intended to enhance privacy rights and consumer protection in the state of California.
Google and other major online players and regulators have been working together on providing web technologies that can strike the very tricky balance between guaranteeing the user’s online privacy whilst not jeopardising the business models of the many companies that rely on third-party cookies to generate revenue. Their ultimate goal being to give consumers more transparency and greater control over how their data is used, and ensuring that cookies aren’t replaced with alternative forms of individual tracking, or covert approaches.
And this is where zero-party data comes into play.
Seen by many as one of the most promising data collection solutions in a cookieless world, zero-party data is the way forward, and having a well-structured and comprehensive zero-party data collection solution in place will go a long way in helping companies to bridge the gap left by third-party cookies.
The key difference between first-party data and zero-party data is that first-party data is generally required information that customers supply to make a purchase or to access a service, such as name, gender, date of birth and address. Zero-party data is optional information that the consumer chooses to willingly provide to a company, to hopefully improve their user experience. In the case of Decathlon, they used a dynamic gift guide to help their audience to find the perfect end of year gift. As explained by Olivier Flament, Data and Direct Marketing Manager at Decathlon:
“We use the Qualifio platform to boost engagement via interactive content created at key moments of the year, which will enable us to collect strategic data, a preference, a wish that will help us segment our database, personalise our communications and ultimately build customer loyalty.”
Why is zero party data important?
Most consumers want to hear from the brands and companies that they like buying from and interacting with, therefore they’re willing to share their zero-party data information with them. Zero-party data has 4 major benefits:
- ✅ The data collected is qualitative and accurate as it has come directly from the source, from the customer.
- 🔍 The data shared by the customer is relevant, and tells companies how they want to be interacted with.
- 💵 Zero party data is very cost effective, most of the time it’s already in a brand’s system, it just needs to be harnessed and used correctly. The customer has handed it over, it doesn’t have to be paid for.
- 📚 Worrying about data protection regulation compliance will be a thing of the past, as the source and manner of collection of the data are known and secure.
Having a well-harnessed zero-party data strategy in place will help brands to engage in a more meaningful way with their audience. Zero-party data allows the consumer to volunteer their intentions or preferences; Forrester gives the example of a brand of strollers asking their customers for their due date, to estimate when they would be making their purchase. Zero-party data can also allow brands to personalise their content for their users, without being creepy and in-your-face. Customers who are willing to partake in a personalised experience will have the opportunity to share their data, with the exchange with the brand being transparent and valued by both parties. Whereas consumers who would rather not share any data, will no longer be plagued by sometimes misplaced targeted content.
Customers sharing their zero-party data with a brand will also enable them to gauge their trustworthiness amongst their audience. The more consumers are willing to share and exchange with a company, the more they trust them to keep their data secure.
Companies who are looking to invest in a zero-party data strategy for their digital marketing will need to figure out a few key points before getting started. They’ll need to establish which of their data points would be improved with personalisation, and whether additional ones are needed? What does the ideal data exchange with their audience look like? And when are the right moments in the user experience to ask for zero-party data? It is important to not overwhelm users with questions from the moment they register. A more spread out approach is preferable, as it will help to maintain the careful balance between getting enough information to improve the user’s experience, and keeping that experience a pleasant one.
Another key element to take into account is to only collect the data that you’re going to use. Brands need to make sure that if they’re asking a pet owner what kind of pet they have, then they need to ensure they’ll incorporate that information in their content sharing processes. There’s no point sending a rabbit owner information about dog food for example!
There is a wide variety of zero-party data solution suppliers and vendors currently offering their services to companies who are looking to enrich the interactions they’re having online with their audiences, so going into a conversation about which solution is best suited to them with a clear idea in mind of what the brand is looking to achieve in terms of audience engagement, is highly important.
Some great examples of zero-party data collection
The need to have well-thought out and executed zero-party data strategies in place will have a varying impact on different sectors, with registration being one of the most common ways in which to collect zero-party data. Others include email or website preference centers, interactive formats such as quizzes and games, loyalty cards in-store, and social media polls.
In a retail environment, consumers will typically be willing to share their information with a company, with the expectation that doing so will reward them with a better shopping experience. In the baby and new parents sector for example, companies can ask their customers to share more information about their child, allowing them to then share content that is tailored to that family. For example, a list of gadgets and clothes the new parents will need if they’re having a girl in winter. And the same principle is applied by pet food companies, who can ask their customers about the type, breed and age of their pet, in order to provide them with the content they’ll be interested in. Purina, for example, asks their customers what breed of dog they have and how old they are, so that they can send them the appropriate coupons and newsletters. Qualifio has also worked on a campaign with Nescafé who added a field in one of their forms to know which of their products their audience usually buys and drinks, in the same aim of being able to personalise their relationship with them.
It is widely recognised amongst publishers and news outlets for example, that we are entering the decade of data, where looking at the needs of the user rather than those of the publishers, will be crucial. With former Times and Sunday Times head of digital Alan Hunter saying that:
“the publishers that do follow the data will succeed and those that don’t I’m afraid will not, they will wither and die.”
For radio brands, for example NGroup, having as many logged-in users as possible will be key, as they will need to transform anonymous visitors to their websites into identified listeners, allowing them to share their listening habits and general interests. These preferences, given with consent by the listener, will then allow stations to determine what the best interactive, clickable and original content is to be published on their websites, to encourage users to register, to log in and to sign up for newsletters and other content.
How Qualifio can help
In our ebook about the end of third-party cookies published earlier this year, Qualifio’s co-founder Olivier Simonis wanted to reassure brands:
Collecting zero-party data in a fully transparent and GDPR compliant way, and then being able to make the most of this data is what Qualifio does, by giving brands access to the tools they need to do so. With over 50 interactive marketing formats that range from quizzes to contests, surveys and animated games, Qualifio enables large brands and media groups to engage with their audience across all their digital channels, whilst collecting high quality zero-party data.
Now that the cookie’s crumbled
In a world without third-party cookies, brands are going to have to rely on collecting first-party cookies and zero-party data from their audience. The key to their success will lie in how effectively they can do this. The data is usually readily available but it needs to be harnessed and used correctly. Companies need to keep a few main points in mind to be successful:
- 🤔 really consider and plan how the data will be used;
- 🚯 don’t waste it;
- 🤯 don’t overwhelm the consumer;
- 😇 and remember that the relationship they’re building with their audience should be based on honesty and transparency.
Zero-party data collection should be a carefully considered and collaborative marathon, not a rushed, energy-wasting sprint. Zero-party data solutions are clearly the way forward.