What is zero-party data and how can it help your business?

Businesses have long used information obtained from cookies and third parties to inform their marketing efforts.

But in an increasingly strict regulatory environment—and with significant changes to tracking technology just around the corner—many are looking for more reliable and sustainable sources of customer data.

That’s where “zero-party data” comes in.

 

What is zero-party data?

The term “zero-party data” was coined by Forrester, and it’s really a way to distinguish a particular type of first-party data (more on that below).

Zero-party data is information that a person voluntarily and intentionally shares about themselves with your business. For example, information about a person—such as their name, occupation, or purchase intentions—that they have explicitly typed into a web form.

A person might provide zero-party data because they want to access something you’re offering, such as a report, or an exclusive discount. Or they might just provide you with information because you’ve asked for it.

But, importantly, people are unlikely to provide zero-party data unless they trust your business.

 

Zero-party data vs. other types of data

To further explain the concept of zero-party data, we need to distinguish it from two other types of data.

Firstly, there’s “first-party data.” For our purposes, this is information you collect directly from an individual, via your own channels, but without the individual explicitly providing it.

Examples of first-party data include the sorts of information you collect from a user via cookies or other tracking and analytics technologies—data that gives you some insight into how a person uses your services.

While you might need a person’s consent to collect first-party data, they aren’t generally explicitly providing it to you—you’re collecting it from their device as they interact with your website or app.

Secondly, there’s “third-party data”—any data you receive about an individual from someone other than that individual. You might buy this data from a data broker or obtain it from third-party cookies.

Zero-party data comes directly from the individual whom it relates to—like first-party data. But unlike first-party data (as we’re defining it in this context), individuals serve up zero-party data intentionally and explicitly.

 

Advantages of zero-party data

Cookies and other such tools can bring meaningful insights about an individual. But there are several reasons why collecting first-party data might not be ideal.

First, there are privacy considerations. Laws such as the EU’s General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA)—among many others—place strict rules on businesses collecting data via cookies.

In some places, like the EU and the UK, you’ll need to get a person’s opt-in consent before placing cookies on their device. In others, such as California, you must offer people a way to opt out of cookies.

This means your dataset won’t ever be a complete representation of your customer base. Cookie data only tells you about those people who are okay with cookies.

Relatedly, there are broader data quality issues with this type of first-party data. You can’t always draw accurate inferences from this type of information—and you can’t use it to build a relationship with your customers in the same way as you can with zero-party data.

 

Zero-party data: Beneficial, but not cost-free

Zero-party data is highly valuable for several reasons.

Cookies are likely to be phased out over the coming years as Google switches to new profiling methods. That’s why businesses are increasingly turning to new types of data.

Zero-party data requires little interpretation or analysis—simply ask the individual for the information you want (while bearing in mind that not everyone is likely to be completely honest).

However, you should be aware that “zero-party data” is still personal data. Data protection law still requires that you only collect zero-party data for a specific, legitimate purpose, that you store it securely, and that you do not share it without the individual’s consent.

With this in mind, if customers trust your brand, and they like what you have to offer, many will provide you with zero-party data: a rich, reliable, and useful set of information that can be a core part of your marketing campaigns.

 

Find out more about how Cassie can help your business with our proven Cookies, Consent and Preference Management solution and contact us today.