The Importance Of Zero Party Data In Digital Marketing
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The Importance Of Zero Party Data In Digital Marketing

Jon BrodyJon Brody

July 15, 2021

The importance of zero party data in digital marketing can’t be underestimated. Forbes went as far to say that “Zero-Party Data is The New Oil,” and while that might seem like a reach, it’s really changing the way marketers interact with their market and prepare full-funnel campaigns. 

In this article, we’ll share how we’re seeing brands best leverage zero party data, how to collect and manage it, and how privacy changes are making it so necessary. But before we go into all that, let’s agree on what zero party data is and how it’s different from first and third party data.

What is Zero Party Data:

Zero party data is a relatively new term, and it’s quite different from first and third party data. Let’s start with those:

  • First Party Data: this is the data your brand can get from a visitor’s behavior across your site, your app, and each of your pages. For example: you’re currently visiting the Ladder blog – first party data would be the information we get by what links you click, how long you stay on each page, how deep you scroll or what specific elements you hover around, etc. If you download any of our gated content or you schedule a discovery call (which you should!), that is first party data. This is valuable information as it helps brands understand their visitors’ intent better.

  • Third Party Data: this is data you get by buying it from sites or sources that you don’t own. Quick example: let’s say you bought a list from a call center or from a media company that has demographic, firmographic and buying intent information – that would be third party data. 

Ok, great – so that’s what Zero Party is not. But what is it, really?

Zero Party Data is information that a customer intentionally and proactively gives to a specific brand. It’s not bought, it’s not inferred using technology – it’s given by the visitor willingly.

Bringing it back to the example of you visiting Ladder’s blog: if, to get a more customized experience, you’d share with us at some point that you’re a VP of Marketing at a Fintech company with 200+ employees that is considering partnering with a growth agency for paid search and paid social… all that would be zero party data. 

How to leverage zero party data:

Now, why is zero party data so important in digital marketing?

One big reason behind its meteoric rise has been changes in privacy regulations like GDPR and CCPA and even changes such as iOS 14. Marketers are now in a more difficult position to get first and third party data. 

That has made zero party data even more premium – since it’s shared out of the visitors’ own volition, there are no privacy issues. It’s a voluntary decision, and it provides crucial information for brands that want to create personalized experiences and are in desperate need of data to fuel their mix. 

Yes, marketers love zero party data. But why would visitors give that information away? 

A good zero party data should be a win-win situation for both the brand and the visitor. 

Your customers expect a tailor-fit experience: they want to see relevant ads, they want to be shown products and content that they care about, they want to have a guided path that makes sense to them individually. At the same time, they want to know their data is private, safeguarded, not shared around, and given on their terms. 

Marketers are stuck between a rock and a hard place, but zero party data offers a way out. By providing value in exchange of that information (more on this in the next section), brands are able to use that data and build those experiences that customers want without crossing privacy lines. They get a better UX across channels, on-site, in-app and across the whole marketing funnel, and marketers also benefit from higher conversion rates, AOVs, retention, etc.

How to collect zero party data:

Zero party data is obviously valuable, and customers don’t want to necessarily give it away. There needs to be a value exchange for it to make sense to them to share their information with you. You need to incentivize that transaction, or you won’t get much from their end.

So, how are brands collecting this data?

The usual value proposition that brands “sell” their customers for their data is the promise of more personalized experiences (better recommendations, etc.). This isn’t necessarily a bad message, but it’s a very common one. We’re seeing that visitors and customers are accustomed to that and already have it as a basic expectation. If you don’t provide it, they’ll notice – but if you do provide it, they won’t. 

We recommend looking for ways to add even more value and increase the incentives for your customers to willingly share their information with you. Here are a few hypothetical examples:

  • You run an ecom store – offer an exclusive offer on a core product in exchange of answering a few questions that you then leverage into zero party data and helps you understand your buyers better.

  • Or you run a B2B SaaS company – you build a quiz that helps them identify challenges within their company and gives you a more clear picture on who they are. 

There are dozens of other ways to make that exchange more organic (NPS surveys, asking during opt-in, using your customer service team, discounts, loyalty points…), be creative and find what works for your customers.

Before we go, some quick rapid fire tips that can help your zero-party data strategy:

  • Use the insights you get from it into your overall marketing strategy, content, sales calls, messaging, strategic narrative, etc.

  • Unify your zero party data with your first party data to get an even more complete picture.
  • Make it an omnichannel experience where you can collect it differently across channels.

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