WEBSITE MANAGEMENT, CONTENT MARKETING, SOCIAL MEDIA

What is the Difference Between Zero and First-Party Data?

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Written by Hazal Kaynak
12/05/2022
               

First-Party Data vs Zero-Party Data 

 

Customers rule the marketing world. As marketers, we need more information to understand customer intentions and behaviours. That’s why for today’s marketers, data means power. Customer data is the key ingredient to creating personalized experiences for customers. Consequently, collecting data in the right way becomes more and more important every day. 

As third-party cookies lose their effectiveness for protecting user privacy or complying with regulations like GDPR, marketers need to find new ways to collect customer information. This change has created a challenge for many companies that have relied on cookies to track user behaviour and advertise through digital channels.

The shift is not new–it's been happening for a while. Now marketers have to rely on data from their websites to advertise and track activities across domains. So it's up to marketing teams to come up with ways to deliver personalized content to their prospects and customers.

If you feel confused about how data collection works and want to explore the differences, don’t worry. In this blog, we’ve compiled all the information you need to know about zero and first-party data collection. Let’s discover it together!

 

Zero, First, Second, and Third-Party Data: What Is the Difference? 

 

source: capillary

 

Companies use different types of data to guide their strategies. If you are familiar with the concept, you’ve probably heard about zero-party, first-party, second-party, and third-party data before. The differences between these types of data come from their level of directness. 

Zero and first-party data can be collected from the customer directly. On the other hand, second and third-party data can be collected by cooperating with a partner or a data aggregator. 

Unlike second and third-party data, both zero and first-party data offer high-quality customer data without compromising privacy.

 

What Is Zero Party Data?

 

In the collection of zero-party data, customers act proactively and share their information intentionally. This kind of data includes information about communication preferences, purchase history, personal context, and how the individual wants to be recognized by the company.

Zero-data collecting strategies provide companies with more qualitative, accurate, relevant, and cost-effective data to use.

There are multiple ways to collect zero-party data but these tactics are mainly based on mutual interaction with the customer. You can collect zero-party data with surveys, newsletter sign-ups, gated form fills, customised product recommendations, and  personalized content. In addition to that, running quizzes, questionnaires, and polls in the digital channels is useful in collecting zero-party data.

 

source: wyng

 

It is a fact that a zero-party data strategy is a great way to collect quality data directly from customers. Still, there is a disadvantage to that. Zero-party data strategies can raise customers' expectations to get a higher value every time they interact with the companies. Keep in mind that while building a zero-party strategy, it is important to balance things out and keep customers on board.

 

What Is First-Party Data?

 

As stated before, first-party data is collected directly without any outsourcing. In the collection of first-party data, customers act passively and you gather information from your systems and platforms. You can collect first-party data from your website, mobile apps, social media pages, surveys, customer feedback, and more. In addition, customer data management platforms and customer relationship management systems are highly used to collect quality first-party data. 

As first-party data is collected by the company's systems and platforms, it gives a competitive advantage with its uniqueness. On the other hand, you need an ample amount of first-party data to make it valuable. So it is true that building first-party data strategies takes a lot of time and effort

 

source: lytics

 

What Is the Difference?

 

We know that both zero and first-party data can be collected directly from the customers. Then, what is the difference? Well, the difference is that in zero-party data collection, customers give their information intentionally. Conversely, in first-party data collection, customers agree to deliver their information to your company via your platforms and systems.

Zero and first-party data also differ in data variety. While zero-party data provides information about explicit customer preferences, first-party data provides information about implied preferences

To be more precise, let's explain this with an example. With zero-party data, you can gather information about customers' personalities, such as size, characteristics, style, or purchase plans. On the other hand, first-party data gives you information about customers' demographics, website interactions, interests, and more.

Contrary to first-party data, in the collection of zero-party data, there is a value exchange. Companies collect zero-party data by asking questions to customers directly and offering value in exchange for the collected information.

 

Why Is Zero-Party Data a Buzzword?

 

As it is a great way to solve the personalization and privacy paradox, zero-party data strategies become more of an issue every day.

It is a win-win situation that benefits both companies and customers. First-party data helps companies to build customer loyalty, create more personalized experiences, and execute successful digital marketing strategies. For customers, it delivers value and a more convenient experience.

In addition to that, nowadays customers are becoming more and more concerned about the data that is collected from them. As a result, the importance of zero-party data increases every day. As customers intentionally share information with companies, this kind of data also keeps companies protected from legal issues.

 

In Short

 

We are living in the information age. So it is significant for marketers to build and execute their marketing strategies based on data-driven and experimental strategies. According to your business needs and goals, you can use zero and first-party data strategies to build and execute a successful digital marketing strategy. Don't forget that there is no limit to being successful in the digital marketing world!

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