Zero-party data: definition, best practices and use cases
What is zero-party data? And why is it on everyone’s lips at the moment?
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 and a whole bunch of different types of data: zero-party data, first-party data, the end of 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?
Zero-party data is optional information that the consumer chooses to willingly provide to a company, to hopefully improve their user experience. Zero-party data is information that is hard to infer or buy from a user.
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 is an excellent alternative to the currently available third-party cookies.
Therefore, having a well-structured and comprehensive zero-party data collection solution in place that uses the power of interactive marketing is essential for companies looking to bridge the gap left by third-party cookies.
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 second half of 2024, so a couple of years 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.
The most consistent feedback we’ve received is the need for more time to evaluate and test the new Privacy Sandbox technologies before deprecating third-party cookies in Chrome. [ … ] This deliberate approach to transitioning from third-party cookies ensures that the web can continue to thrive, without relying on cross-site tracking identifiers or covert techniques like fingerprinting.”Anthony Chavez – VP, Privacy Sandbox
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.
Qualifio – who are we and what do we do?
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At Qualifio we are increasingly seeing that the brands that we work with, such as L’Oréal, DPG Media Services, Purina and Unilever are all aware of the importance of putting a data collection strategy in place. They’re also aware of the importance of organising their campaigns around key events throughout the year – our Marketing Calendar 2022 is the perfect tool to help them do this.
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:
- 1️⃣ first-party cookies, that collect data that is then only accessible to the website visited by the user
- 3️⃣ 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.
⚠️ Curious to find out more about first-party data and how it is helping brands and media groups to better engage with their audience? ⚠️
Check out THIS ARTICLE that tells you everything you need to know
But where do cookies come from?
And why have they been making the headlines so much in the past few years?
A quick history lesson
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
Zero-party data is information that is hard to infer or buy from a user, in other words it is information that a customer voluntarily shares with a company. Seen by many as one of the most promising data collection solutions in a cookieless world. In other words: zero-party data is the way forward for brands.
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.
In the case of Decathlon, they used a dynamic gift guide to help their audience to find the perfect end of year gift.
“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.”Olivier Flament, Data & Direct Marketing Manager – Decathlon
Why is zero-party data so 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.
Zero-party data vs first-party data
The difference between these two types of data is actually quite blurry and there isn’t a clear cut black/white answer. The reality is that both types of data are actually collected together most of the time, as they go hand-in-hand. If you’re collecting first-party data then it’s more than likely that you’re also collecting zero-party data at the same time.
Zero-party data and first-party data are the perfect companions when getting to know an audience better.
Zero-party data is data that is voluntarily shared by a user and that is hard to infer or buy from a user. So whereas first-party data is generally required information that a customer will need to supply in order to make a purchase or to access a service, zero-party data is optional information that the consumer chooses to willingly provide to a company.
Let’s illustrate the difference between the two types of data with the example of a hotel reservation:
- First-party data: you provide your name and email address to confirm your reservation, you also sign up for their newsletter.
- Zero-party data: you specify that you’d like a room with a view on the lake, that you’re vegetarian and that you’re travelling for business.
What are the advantages for both parties after this exchange?
- the hotel know that they can contact you again, and they have enough information to be able to personalise their future marketing messages to your preferences. They can also segment their database.
- as the consumer, you’ll have a better brand experience with the hotel than if you’d provided no data. They know your preferences so they won’t be sending you generic messages, you’ll get something catered to your needs.
It’s a win-win situation for everyone involved!
How to set up a zero-party data collection strategy
Having a well-harnessed zero-party data collection 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.
4 easy steps to create a zero-party data collection strategy:
- Acquisition: align your data collection expectations with your marketing and communication strategy. You’ll need to know what sort of data you want to collect, how you’ll use it and when you’ll be collecting it.
- Enrichment: avoid any data silos by combining your existing first- and zero-party data. You’ve probably already got a lot of both types of data in your system. Make sure you’re combining both and maximising your usage of both types of data.
- Reinforce your conversion funnel: clearly communicate the value exchange with your audience. If your community know what they’re getting out of sharing their data with you, they’ll be much more likely to share it!
- Customer loyalty with an omnichannel experience: make sure that you’re collecting zero-party data from your audience across all the channels and touch-points you have with them. And then reward them for these interactions with exciting rewards and keep them coming back for more!
Collecting 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 value 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.
Having a better understanding of what consumers are expecting from a brand, will allow them to create more personalised content and establish a more meaningful relationship with their audience.
L’Oréal – a data collection strategy that’s worth it!
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.
L’Oréal is the perfect example of this, they’ve created a global data collection strategy for the majority of their brands, using Qualifio’s interactive campaign formats and focus on first-party and zero-party data. By collecting and efficiently using zero-party data from their audience, the brand is able to provide them with personalised experiences, both online and in-store.
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?
- 🕑 When are the right moments in the user experience to ask for zero-party data?
Make sure it’s a value exchange
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. Establishing a value exchange with your audience is essential as users will be more willing to share their data if they get something in return.
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.
How to collect zero-party data
The need to have a well-thought out and executed zero-party data collection strategy 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.
With the clever use of a form for Retail brands
In a retail environment, having good quality data is essential as 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.
With newsletter opt-ins and interactive advertising formats for Sports clubs
In the sports industry, data is playing an increasingly important role, and not just the player’s performance data on the field: the fans’ data is nowadays having a significant impact off the pitch too and is finally being recognised as a key element in any sports body’s marketing strategy.
By collecting first-party and zero-party data from their fanbase, a club can get to know their audience better and can better understand their needs and their expectations. This will then allow them to tailor better experiences and can mean big business in terms of sponsorship revenues. To say nothing of the sense of community and belonging they’ll be creating, encouraging the sense of loyalty from fans.
For example, when trying to generate revenue from sponsors, it is crucial for clubs and organisations to have a well-harnessed first-party and zero-party data collection strategy in place, as sponsors will be highly favourable towards a club that is directly in touch with their fan database and knows what they expect and need.
Have you ever wondered how new digital technologies are shaping the future of the sports industry? And how data, especially zero-party data, is playing a key role in how sports clubs, leagues and organisations are preparing for the cookieless world? Then make sure you download our ebook “The future is fan-tastic” and find out how major European football clubs like LOSC, Valencia CF and Toulouse FC are placing interactive marketing and data collection strategies at the heart of their marketing activities.
Spanish La Liga football team, Valencia CF, have placed zero-party data collection at the heart of their digital strategy. The club uses the Qualifio Engage platform to reach four of their marketing goals:
- 👥 Grow their database by collecting new opt-ins for their newsletter.
- 👂 Get to know their fans better by collecting valuable insights and feedback from them.
- 💰 Increase their sponsors’ visibility by including interactive advertising formats in their offering.
- 🤩 Engage with their database thanks to fun and interactive campaigns.
With a quiz and account creation for Media groups
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.
In the media and digital publishing industry, preparations for the upcoming cookieless world have come on leaps and bounds in the past couple of years, and the progress is encouraging and bodes well, but there is still a lot of work to be done. As highlighted by Teads, following a survey they carried out:
What’s most encouraging is to see that publishers are making changes to insulate their business models from external factors. By focusing on quality content and 1st party data, they are giving advertisers the best possible opportunity to buy sustainable media that delivers real business outcomes. It’s a very exciting time for publishers.”
If you’re curious to find out more about how the end of third-party cookies is going to be affecting the media industry, and how major European media groups like Vocento, NGroup, Bonnier and RTL are preparing for the cookieless world, then make sure to check out our ebook “The challenges facing media groups in today’s digital world” – you can download it HERE.
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How Qualifio can help with zero-party data collection
Helping brands and media groups to collect first-party and zero-party data from their audience 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 these companies access to the marketing to easy-to-use tools that require very little to no technical IT knowledge or coding.
With over 50 interactive marketing formats that range from quizzes to contests, surveys and animated games, to choose from, Qualifio enables large brands and media groups to engage with their audience across all their digital channels, whilst collecting high quality first-party and zero-party data and building meaningful relationships.
The end of third-party cookies
In our ebook about the end of third-party cookies, Qualifio’s co-founder and Chairman of the Board, Olivier Simonis, wanted to reassure brands:
Your brand is strong, attractive and in possession of a lot of data. Stop relying on complex, non-transparent AdTech ecosystems and be creative. Context and content are kings. You don’t need tons of data: start making better use of the data you already have access to – that will already be a challenge! Understanding the consumer who is tired of not knowing where their data is stored and how it’s being used is the best strategic and long-term strategy you can embark on”.
What about loyalty?
To further the conversation, Qualifio has recently added a new module to their offering: Qualifio Loyalty. We believe that customer loyalty should be based on and should reward all the interactions that a user has with a brand. By asking themselves the question, “what is brand loyalty?” and then when considering how building customer loyalty might help them with their first-party and zero-party data strategy, brands and media groups are taking the next crucial step on their digital journey. They are making the most of all the precious data they’ve collected from their audience and furthering their relationship with them.
Perfectly compatible with the Qualifio Engage module, and just as easy to set up and manage, the Qualifio Loyalty module allows brands to set up creative and innovative loyalty programs that are based on interactivity and engagement. Take a look at a couple of campaigns that we set up to test out the new module to find out more about how this exciting platform works.
How to track data in a cookieless world?
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 in a cookieless world.
Over 50 interactive formats to choose from for your marketing campaigns!