Interviews, insight & analysis on digital media & marketing

From Zero to Hero: what is ‘zero-party data’ and why could it soon become the saviour of brand marketers?

by Łukasz Włodarczyk, VP of Programmatic Ecosystem Growth & Innovation, RTB House

Based on concerns surrounding user privacy, many of the traditional methods of tracking and targeting individuals online (e.g. third-party cookies) are being restricted or phased out completely. As a result, many senior marketers are currently looking at approaches to ad addressability which rely heavily on the collection, analysis and use of ‘first-party’ data.  

First-party data is collected through the user’s intentional behavior on the website or app and analyzed by the content and/or product creator. Examples of this would be when a user leaves information by sharing their email address, age and gender to log-in to a brand’s website or social networks, or subscribe to a loyalty program or newsletter, or to access gated content. In many cases, first-party cookies, also known as ‘same site cookies’, are used to mark users (like a car license plate) and allow the publishers’ servers to connect with users via the markers on their devices. These work only on the owner’s website and do not continue to track user activity when they leave.

If you are a major retailer with a loyalty card and a wealth of customer data, such as Tesco or Boots, the rise in importance of first-party data is an exciting development. However, for the vast majority of businesses and brands, the new focus on first-party data could be problematic. If you are a FMCG brand, a ketchup brand for example, selling your product exclusively via retail partners, you’ve probably had very little opportunity to build a direct relationship with your customer base or to collect the first-party data that you’ll soon need. 

For brands in this situation, a better solution might be to look at how you can leverage a type of customer information classified as ‘zero-party’ data. 

Enter ‘zero-party’ data

By Forrester’s definition, zero-party data is information that a customer “intentionally and proactively shares with a brand, which can include preference center data, purchase intentions, personal context, and how the individual wants to be recognized by the brand.” 

Most commonly in marketing terms, zero-party data refers to survey responses, where users select favorite categories or interact with various choices. For brands that do not currently have a high level of customer traffic on their website or app, a good way to gather zero-party data is to run questionnaires as ads. If you are a frequent user of  YouTube, you will be familiar with this sort of one-question questionnaire appearing as a pre-roll ad before videos, often asking you to identify which brands you are most familiar with among the selection displayed. 

Other publishing organisations have also been successful in gathering and leveraging zero-party data, often incentivising users to complete surveys in which they share their personal preferences (e.g. Coca-Cola or Pepsi?) in return for more relevant content experiences or access to exclusive content. This, combined with their first-party data, allows them to create a more complete view of customers that, in turn, helps advertisers to serve better-targeted, more efficient campaigns.

Zero-party is privacy-friendly

As we welcome 2022, there are a variety of ‘cookieless’ approaches available to marketers to select and show more relevant ads: behavioral advertising utilizes data about a person’s behaviors to select ads; contextual advertising utilizes the context of where an ad is shown to select ads; zero-party data, meanwhile, offers “person-driven advertising” where the ad selection system utilizes a person’s explicitly stated feedback on what sorts of ads they would prefer to see.

The ‘zero-party data’ approach is in tune with the spirit of recent data privacy in that it encourages brands to figure out who users are with their permission, rather than simply tracking them without their knowledge. The data provided by users is shared consciously and intentionally so we can be sure of their consent. A key aspect of zero-party data collection is that the user is in full control of the personal data they choose to share with the brand.

At RTB House, as a leading vendor of advertising services, we stay on top of all the current and future trends and changes likely to impact our industry. We are in close dialogue with browser vendors, industry bodies and regulators to figure out and contribute on how to best position our technologies and support our clients.

As such, we have developed our own zero-party data product, RTB Insights. Rather than contain any offers, its main goal is to gather valuable insights from the users. RTB Insights collects responses via survey banners containing questions related to the brand, products, or customer journey. Example use cases include gathering product/offer feedback, learning reasons for abandoned baskets, and identifying customer shopping preferences.

Most marketers are still in an early phase of their journey with zero-party data. We think it’s going to become increasingly important over the next couple of years and are currently running test campaigns for a number of our clients. Contact us today to find out more on how zero-party data can help to optimise the relevance and effectiveness of your brand’s marketing campaigns.