With data privacy on everyone’s lips, marketers are turning to zero-party data to create personalised experiences for consumers.
In 2017 I wrote: “First-party data is information collected by digital publishers about their visitors’ behaviour. First-party data often includes CRM, subscription/survey and social media data. This type of owned data is often seen as more valuable as it typically has higher degrees of accuracy.”
It’s now opportune to update my opinion to predict that zero-party data (ZPD) is set to become the mostvaluable data set in 2022.
Consumers are increasingly wary of how personal data is collected, stored and used. Collecting consumer data to use for targeted advertising is thus becoming more challenging for brands and publishers.
The increasing prevalence of data breaches has not helped, with an estimated 18.8-billion data point breaches worldwide in the first half of 2021 alone.
These and other factors mean the data market for targeted advertising will change completely. For instance, due to the impending demise of third-party cookies, the type of cross-site tracking we are used to – the automatic background transmitting of customer data to advertisers via pixels – is no longer viable. The balance has shifted from invasive tracking and re-marketing to a more enlightened approach for customer interaction. Enter ZPD.
The age of privacy
With ZPD, compliance is not an issue as this type of data is volunteered by consumers who choose to share it “intentionally and proactively with a brand”, according to Forrester Research, which first introduced the term in 2018. Collecting ZPD has since become increasingly important for marketers. This type of data can include preference centre information, purchase intentions, personal context, communication preferences and how an individual wants to be recognised by the brand.
An advantage for brands is that they can use ZPD to collect customers’ explicitly stated wants and needs to create hyper-personalised advertisements, all while enhancing the customer experience (CX).
With data privacy enforcement becoming stricter through laws such as Europe’s General Data Protection Regulation and our own Protection of Personal Information Act, it is crucial to start collecting ZPD immediately.
Naturally, as the internet becomes more privacy-centric, the role of ZPD is growing in importance. The value of ZPD-type trusted-party data is that it is collected with customers’ explicit intentto provide it knowingly and willingly, while first-, second-, and third-party data are not given with consent.
This matters now, when data privacy concerns are at an all-time high, with increased government legislation and browser privacy features. Browsers are increasingly able to protect users’ privacy. Firefox’s Enhanced Tracking Protection, Safari’s Intelligent Tracking Prevention and the knock-on effect of Apple’s widely publicized iOS 14.5 App Tracking Transparency update are all examples of Big Tech recognising their responsibility to place consumers in control of their own personal data.
While the Google-owned Chrome browser, which dominates two-thirds of the browser market, has delayed its timetable of phasing out cookies until 2023, marketers are already progressively being forced to stop relying on this kind of third-party tracking.
As Ad Age reports, the new era of privacy has created a Catch-22 for marketers. Today’s consumer expects true personalisation, bespoke content and tailor-made product recommendations. But this goal is tough to achieve when contrasted with government legislation for increased privacy, tighter data controls and the right to have information erased. Capturing ZPD helps to resolve such a “personalisation-and-privacy paradox”.
Now for some good news
Forward-thinking publishers have already been building sustainable, multiplatform solutions for some time. This includes capturing ZPD by asking discovery questions at opt-in, preference centres on their digital assets for readers to choose the kind of content and cadence they prefer, and user-friendly micro-experiences (such as short quizzes) to tailor readers’ online experiences. This naturally feels like a less invasive way to gather feedback. Email is also back in the spotlight (again) as a privacy-compliant communication method, as personalised content can be tailored effectively according to ZPD.
By adopting a method of integrating results to create a more accurate picture of customer and audience segments, brands can be assured that ZPD is a highly effective, non-invasive market research tool. Combining ZPD with first-party data equates to tailored product recommendations and an enriched experience for existing and new customers.
While I believe in the value of first-party data, it’s clear the power lies in combining it with ZPD and integrating with existing systems to further enhance the data and add deeper insights. In addition, by aligning content and marketing strategy with overall customer data, while clearly communicating this value exchange, the omnichannel experience is enhanced for customer benefit.
- What would you love to know about your customers that you don’t know from your first-party data?
- Is there information you genuinely need to know that would help you provide a better customer experience (and of course sell more)?
- How will you reward trust? Perhaps with a better website experience (for example, customers shaping their own preference centres), access to content, recommendations, or discounts. Be sure to use a value proposition throughout the marketing messaging to attract customers as ZPD prospects.
- Make sure your ZPD is compliant by design, not afterthought.
- Assuring customers they will have more control over their personal data (e.g. knowing where the data will be stored) engenders trust, making it clear that personal data will be used thoughtfully, with enhanced CX benefits as the result.
- Consumer data should be stored neatly and efficiently on an easily accessible platform for download by individuals.
- Data opt-in questions should be crafted with care. These represent not only the first important step in a customer’s journey, but also a once-off opportunity to gain the richest amount of information with the least number of questions.
- It’s important not to overwhelm customers, especially with irrelevant questions. Always maintain a careful balance between getting enough information to improve customer experience, while keeping the interaction friction-free.
- Keep a transparent ZPD collection process simple and clear from the start. Using the principle of triple transparency: Make it clear when (1) collecting (2) utilising and (3) letting customers change their ZPD.
Power to the people means power to the brand
By giving customers their power back and allowing them to create a more personalised experience online while being involved in developing their own experience, they’ll feel involved with a brand in an active way. This leads to a feeling of loyalty.
So, there you have it. While ZPD is set to be a major buzzword in marketing this year, remember the broader strategic context. ZPD elements alone won’t solve bigger customer acquisition challenges. It must be understood that they form just one layer of an effective consumer acquisition strategy, which should include data-powered personalisation for optimum media performance.
Media and marketing pioneer Josephine Buys (neé Swainbank) is the CEO of the Publisher Research Council. She has always been at the forefront of change in the advertising and media landscape. Embracing a variety of industries and platforms, from publishing and entertainment to heading up Africa’s only IAB, Buys continues to drive digital transformation in ad land, consulting with publishers, agencies and brands.
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