Few people associate the word “party” with data, but for marketers, it’s all we can talk about these days. Data is critical in ensuring we can be effective at our jobs. Without it, we’re driving blind and losing precious dollars and market share. It’s a big deal.
The past decade will likely be regarded as the wild wild west of data collection. In fact, so much data was freely available that whole industries sprouted to help marketers tackle their “Big Data” problem.
There were, of course, many advantages to a firehose of information. Countless digital advancements were developed, consumers benefited from more relevant marketing, and marketers finally had some real transparency for measurement.
And while data is certainly not going anywhere, the way we collect, track, and use consumers’ personal information will change dramatically in the next decade. Marketers will need to be more intentional and strategic with their sources of data and how they use it, prioritizing security, trust, and value.
Two of the most potent data sources are zero party data and first party data. Let’s go over what you need to know about each and how they can best serve your business goals.
In this post you will find:
- What is the difference between first party data and zero party data?
- What is an example of zero party data?
- Ways to collect zero party data
- Ways to collect first party data
- How can marketers use zero party data?
- How can marketers use first party data?
- Biggest data mistakes to avoid
- How Vesta can help with zero party data
What is the Difference Between First Party Data and Zero Party Data?
Before we jump into the differences between zero party data and first party data, let’s revisit the overall digital landscape. In addition to zero and first party data, there are also third party and second party data.
Broadly speaking, second and third party data can be considered “rented” data, while zero and first party data can be regarded as “owned.”
When a bunch of websites take their owned first party audience data and package it to someone else through an aggregator, the data is now considered third party data to that buyer.
Third party data has been one of the most widely used sources for advertising campaigns and audience optimization. However, the buyer has no direct relationship with the individual consumer, which means data can become outdated and unreliable. Eventually, this impedes the effectiveness and quality of campaigns.
Second party data is similar, but it is essentially directly accessing another organization’s first party data. It involves explicit communication where both companies agree on terms and map out an exchange of data.
While second party data still puts a middleman between you and your consumer, the data is considered valuable as you have complete visibility into where the data came from. Still, it must be continuously purchased from another organization.
Marketers face challenges today that have dramatically increased the value of zero party and first party data. Essentially, marketers are stuck in a paradox of solving the personalization needs of consumers while also respecting privacy concerns. They must also consider increased government regulation and browser features like the disappearance of cookies.
This is why many brands are investing in owned data like zero and first party data. But it’s important to remember that each source provides specific information to your brand.
Zero Party Data
- Personal information is voluntarily given to a brand
- Typically concerns higher-order attributes such as lifestyle, hobbies, values, and behavioral preferences
- Collected through fill-in forms, online communities, quizzes, interactive games, surveys
- Is a strong indicator of trust in a brand
- Highly accurate since it comes from a direct source
Examples include lifestyle and habits (hobbies, personal interests, values), life stage details, product affinity, shopping preferences, communication preference, emotional connection to the brand, Net Promoter Score, likelihood to recommend, and purchase intent.
First Party Data
- Data collection happens in the background by a brand observing consumer behavior
- Typically collected by tracking site-wide, app-wide, or on-page behaviors (clicks, session context)
- Broadly transaction-based
- Accurate data given from a direct source but will miss valuable contextual information
Examples include purchase history, clicks, time spent on page, scroll depth, email engagement, demographic information, and social data.
The bottom line difference between the two is that one is proactively shared data (zero party data), and the other is passively shared data (first party data).
Even if they don’t know the term “zero party data,” consumers are always aware and consent to provide that information. Conversely, they are not always aware of first party data. Most consumers these days are mindful that companies track their activity, but it’s not something they actively think about while browsing.
When brands use zero party data, a consumer is more likely to experience a relieving feeling of “you know me” versus with first party data, which may leave a consumer with a creepy feeling of “how did you know that?”
As industry regulations such as GDPR and the CCPA emphasize safeguarding consumer privacy, marketers are placing a more significant premium and reliance on data that their audiences knowingly and voluntarily give them. Not having this information will result in gambling with marketing dollars and risking customer loss.
Furthermore, marketers know that the future of marketing will rely on more empathetic, purposeful, and customer-first content. Owned data helps achieve this.
Senior Director of Marketing at Microsoft Advertising John Cosley said, “Zero party data is the foundation for a relationship built on trust and a value exchange. For consumers, it holds the promise of a personalized and more relevant experience with brands. In return, brands and businesses receive better insight and a longer-term relationship.”
While first party data is often used to provide clues as to what a consumer thinks or feels, zero party data is straight from the horse’s mouth. It provides invaluable context and gives a more holistic profile, which, as we know, leads to better targeting and higher conversion rates.
What is an Example of Zero Party Data?
Identifying Shopping Habits
We all know how much shopping patterns have changed over the past few years. As a frozen food brand, Veggies Made Great, prioritizes its understanding of in-store retail spending.
They created the VegHead Community as a gathering place for consumers passionate about Veggies Made Great products, while also collecting key information surrounding shopping habits. This helps them understand the who, what, where, when, how and why of their consumers’ buying decisions that is not easily accessible in other channels.
Veggie Made Great’s “Plant a Coupon” campaign identified targeted shoppers at specific retailers like Target to “plant” discount coupons in stores nationwide, then spread the word on social media.
Understanding Consumer Lifestage(s)
This involves collecting data regarding a particular direction in a consumer’s life that they are either heading towards or fully immersed in. Some of the most recognized life stages include big moments such as marriage, parenting, and retirement. Still, it could also be life stages like a career change, moving schools, pursuing a healthier lifestyle, and much more.
Baby stroller brand, Mockingbird, knew collecting zero party data sometimes means playing the long game to avoid annoying consumers. After entering an email address for baby strollers, the company asks for baby due dates. Mockingbird’s email frequency and content changed as the due date approached.
Early on, emails are less frequent and mostly showcase positive customer reviews. Later in the pregnancy, emails become more frequent, as the company knows customers need to make a decision soon, and they highlight strollers’ specific features and benefits. This method shows an understanding of customers individually, while the company gets relevant, timely information to help personalize emails and offer product recommendations.
Gathering Flavor Preferences
While flavor preferences are geared toward food brands, profiling consumer’s desired qualities is a great way to use zero party data. Preferences are complex and nuanced and best collected straight from the source.
Unilever’s fast-growing condiment brand, Sir Kensington’s, collects zero party data through their online brand community, the Taste Buds. With more than 35,000+ survey responses, they were able to develop distinct “evolved eater” profiles that help them better understand their audience and anticipate product needs.
Beyond identifying bold flavor seekers, those pursuing a clean diet, or those looking to indulge, the brand has also been able to tap into its community to collect feedback to optimize product performance, conduct competitor research, hone brand positioning and more.
By involving its consumers every step of the way, from crowdsourcing new ideas to optimizing creative concepts, Sir Kensington’s ensures it stays aligned with constantly evolving tastes and remains true to its mission to elevate the ordinary.
Assessing Product Needs
Instead of trying to guess what problem your consumer is looking to solve, sometimes you can simply just ask them. But this information must be used wisely.
If your consumer shares a challenge they face and you change the topic or ignore them, they will be rightfully annoyed and likely disengage with your brand.
The Business Development Bank of Canada (BDC) deploys surveys strategically and effectively. New visitors to the bank’s website see a one-question study (“What’s your business goal?”), prominently incorporated into the hero area near the top of the site. Options include “managing my cash flow,” “finding the right loan,” and “getting new customers.”
How visitors respond dictates what they see next, with BDC immediately presenting content and solutions that map to each person’s stated needs. For example, a visitor who chooses “finding the right loan” will see the content on how to get financing.
Ways to Collect Zero Party Data
Now that we understand the benefits of zero party data, what is the best way to collect it? Consumers have consistently said that they are willing to give information to a company if they feel it’s going to add value to their experience.
When considering your overall digital presence, there are several places you can collect data while offering value.
Surveys and Polls
Many consumers appreciate sharing their feedback and opinions with a brand. With the right technology platform (ahem, Vesta), it can be used to create a progressive profile of consumers using zero party data.
In an online community, consumers can give up their information in exchange for a valuable engagement from the brand. These engagements could include participating in a discussion forum of like-minded consumers, trying a free sample of the product, hosting an in-home event sponsored by the brand, or special promotion.
Quizzes & Interactive Games
Any kind of entertainment is a great way to collect zero party data. Transparency is always important in these kinds of campaigns, so consumers don’t feel like they’re being tricked by participating.
Loyalty & Rewards Programs
While most loyalty programs are transactional by nature, there are opportunities to collect information beyond purchase history or demographic information, especially when it relates to rewards they find most appealing.
Ways to Collect First Party Data
Collecting first party data is a more straightforward process and is largely reliant on the type of technology analytics you have access to. Here are the top ways to collect first party data:
Site Registration / App Downloads
This information can include name, email, age, gender, location and social connections.
Email Newsletter Signup
Similar to registrations or downloads, an email signup is first party data and includes email opens, clicks, shares, and conversions.
First party data is collected through tracking online purchases as well as browsing. This can include products saved or favorited, idea boards, cart adds, or shared items.
You’re likely familiar with “accepting all cookies” on websites now, and this should be standard practice for collecting first party data. This helps you collect all the behavioral activity happening on your website including which pages they’re browsing, scroll depth, conversions, and much more.
How Can Marketers Use Zero Party Data?
Engagement is designed to be a two-way dialogue between you and your audience, and zero party data is a pivotal way to deliver engagement tailored to each individual. For example, suppose you delivered a lifestyle quiz, and a consumer identified that they have a photography interest. With the right platform, this data should be “stored” in the consumer’s profile and used to deliver a relevant offer like a photo contest. When this process becomes automated, executing personalized engagement at scale becomes achievable.
Today’s consumers are highly interested in brand value alignment, and zero party data is a great way to illuminate the values that are of highest priority. Some consumers will strongly value caring for the environment, while others won’t consider it as important. This kind of information helps you laser focus your sustainability message on an audience where it will most resonate and create meaningful connections.
Emotional Profiling and Audience Insights
In today’s competitive marketplace, consumer insights often determine success and can offer critical differentiation for your brand. Overall, zero party data allows businesses to dive deeper into how consumers think and understand how they can create the best possible customer experience. It removes guesswork and empowers your brand to make smarter decisions.
How Can Marketers Use First Party Data?
For a consumer who is not quite ready to share more about themselves, acting on first party data is a great way to entice further interaction. While we’ve all groaned from being “followed” online by a particular brand, there are also times when we’ve all appreciated a good ol’ fashioned well-targeted ad.
Customize a User’s Website Experience
Using behavioral tracking, you can offer the most enriching navigation experience to a current or prospective buyer. This is especially relevant in ecommerce where you can customize product recommendations and offers created based on website activity.
First party data is foundational information that can be built upon with zero party data. Companies analyzing their first party data are casting a wide net on factual information to gauge traits, explore new markets, and offer comparisons with competitors and industry standards.
Biggest Data Mistakes to Avoid
Asking for Too Much, Too Soon
We’ve all taken one look at a web form, winced, and said “nah.” With data that is intentionally shared, it’s important to remember there is extra workload and trust involved. Asking for too much can prevent consumers from sharing anything and they could abandon interacting with your brand entirely. Gathering irrelevant information is also a deterrent to consumers.
Zero party data and first party data collection should accumulate over time and balance between giving and receiving to secure consumer trust and deliver value. When consumers believe they are receiving something valuable in return, they are more likely to share.
Disconnected Data Between Channels
Disconnected data has been a long-standing challenge in marketing. And nothing will frustrate a consumer more than feeling like the information they share with you is ignored. Having an omni-channel understanding of a consumer is no longer a nice-to-have but a requirement.
The best way to combat disconnected data is choosing the right platforms and partners to enhance, not complicate, your overall marketing tech stack.
Poor Data Ethics
Gone are the days of sitting idly while you hoard data. While big data can be mined for information and used in predictive modeling, consumers expect a positive feedback loop and transparency for how their data will be used. In fact, 72% of US shoppers would be less likely to buy again from a brand who they felt had not been responsible with their data.
Data is an undeniable part of our lives now. Take a stand on how your brand believes data plays a role in your business practices. Consumers want to know not just what data you’re collecting but also why you’re collecting certain data. Why does your brand believe cerrtain data is helpful? How does the data you collect fit in with your unique value proposition as a brand?
How Vesta Can Help With Zero Party Data
Vesta believes in empowering brands to take back their consumer relationships from third party sites. Our all-in-one, online brand community platform secures your consumer relationships, mobilizes your brand advocates, and captures zero party data to accelerate the speed to ROI of all your marketing efforts.
Vesta’s platform engages millions of consumers, collecting valuable zero party data that can be used in personalized engagement and driving ratings & reviews.
Interested in Learning More?
Learn more about community with our All You Need to Know About Community Marketing Guide.