There’s first-party data, second-party data, and of course there’s data hot dog meat, third-party data. Apparently a fourth type of data just dropped 👀.
Called zero-party data, their existence has recently been debated on Twitter– is it real? Is it a marketing buzzword? How the hell is that different from first-party data? Is it… loyalty data? Responses ranged from “It’s not a real thing and I’ll die on this hill,” to “Yes, it’s a ‘thing.’”
So what is it ? Those who think it’s real say zero-part data is information about a person volunteers to a brand in exchange for something that could improve their experience or interactions with a business. Forest invented the term in 2018, but it has entered the digital zeitgeist as conversations about data privacy heat up.
- You give Netflix your email address when you create an account (proprietary data), but you can also tell Netflix what you like and dislike (zero-party data).
- You share your postal code with Yelp when creating an account (first-party data), but you also tell them that you prefer vegan food (zero-party data). In turn, Yelp recommends the best tofu stir-fry in your neighborhood.
Some marketers call it zero-party data, while others call it customer-centric data. Tomato, tomato.
Of course, this looks a lot like first-party data, which is a brand specific data and the ideas of its customers. This can include things like preferences, which seems to be the industry’s snag with the zero-party data definition. It is complicated. If Spotify sees that a user listens to funk and then recommends Parliament-Funkadelic, that’s guesswork.
On the other hand, zero-party data has “explicit meaning and requires no inference,” says Wendell Lansford, co-founder of Wyng, a company that helps brands collect zero-party data.
“[With first-party data] you don’t know all the data that’s being collected about you…because it’s happening behind the scenes,” he said. This “behind the scenes” data is often things like items added or removed from a shopping cart, how long users spend on a site, and what users search for on that site.
“Just because you took action…doesn’t mean you want a brand to have that information and use it to make recommendations,” Lansford explained. “Just because you listened to a song doesn’t mean you liked it.”
Like so many others in the advertising industry, the rise of ZPD comes down to the death of third-party cookies. Without them, it will become harder for advertisers to track people across multiple websites and target them based on (sometimes inaccurate) information.
It’s even more relevant for brands without a big digital presence, explained Forrester analyst Stephanie Liu, calling ZPD a “marketing construct.”
“There’s huge interest in this in the CPG world…manufacturers who have traditionally been disintermediated are trying to understand their customers directly,” she said. “You need to make the value exchange really clear to motivate customers to share their data.”
In practice: Zero-party data is often collected through product research quizzes and similar widgets on e-commerce websites.
Wyng says he’s created this type of tool for clients like General Mills, Unilever and Church & Dwight.
- For example, a interactive quiz on L’Oréal’s La Roche-Posay brand site asks users if their “facial skin type” is normal, dry, combination, or oily, and to select their “main facial skin concern” (aging , redness, sunscreen, pigmentation, or blemishes).
- In turn, they receive a list of suggested products based on their responses in the form of a skin care routine.
- Although there is a section that asks for first party data (email, gender and date of birth), users can ignore it.
- wyng noted the quiz saw conversion rates increase by 21%, with “average order value” up 134%.
Another company, Octane.AI, makes these tools for merchants on Shopify and has used responses gleaned from these widgets to inform email marketing campaigns, sending audiences messages tailored to the information they have shared with a retailer.
Its CEO, Matt Schlicht, is more squishier on the definition of ZPD, noting that it’s primarily used for communication purposes within the industry. “Over a long enough period, do I think there’s a chance that the term zero-party data will die out and people will just refer to it as first-party data? I think that’s potentially very likely. It’s a lot easier to say,” he told Marketing Brew.
As the saying goes: If it works like first-party data, if it jams like first-party data, it’s probably first-party data. Anyway, may we interest you in 0.5 data?