by Sam Martin-Ross, UK MD of digital marketing agency, Eskimoz
On January 4th 2024, Google officially began its phase out of third-party cookies, with the roll-out of a feature known as Tracking Protection, restricting third-party cookies by default. Beginning with a small percentage of browsers, its aim is to complete the phase out by the second half of the year as part of its Privacy Sandbox initiative.
While bad news for marketers who have traditionally relied heavily on third-party cookies in their targeted advertising, the phase out brings with it an impetus for finding new and innovative ways to collect the data vital to effective marketing, and part of this has been a renewed focus on first- and zero-party data.
Zero-party data comes directly from consumers themselves, and for brands willing to tap into this avenue, it offers powerful ways to build accurate customer profiles, create highly targeted campaigns, and crucially, promote better brand loyalty.
What is first- and zero-party data?
First party data refers to the information brands can directly collect about how their customers interact with the company’s website, app or various social channels. It might include aspects such as clicks, time spent on a particular page, or other on-site behaviours like scrolling. It’s useful because it helps marketers pinpoint how users found them, enabling the creation of audience segments and better remarketing campaigns.
As third-party cookies are phased out, this type of data is particularly valuable, being directly owned by the brand, though transparency in its collection is still required. In the EU, for example, this transparency is legislated for, with websites being required to gain explicit consent before being able to track with first-party cookies. From a brand reputation perspective, going the extra mile to explain to your customers why and how you are collecting data is helpful for building trust and credibility.
Zero-party data, on the other hand, involves going directly to the source – that is, asking your customers directly to provide insights on their interests, preferences and other useful demographic points.
Because it comes directly from consumers themselves, it offers an enhanced degree of reliability, removing the need for marketers to make inferences or “fill in the gaps”. It also provides a strong informational basis for personalised campaigns and communications, helping to build engagement between brands and their customers.
The benefits of zero-party data
One survey of businesses found that they cited inaccurate or incomplete customer data wasted around 27% of their revenue. Data quality is a huge issue in marketing, particularly when budget is being funnelled towards activities based on bad data. Zero-party data possesses a much higher degree of accuracy and reliability, helping to eliminate this drain on resources.
The deeper level of insight provided by zero-party data allows a better understanding of how campaigns and marketing efforts are driving purchasing decisions, while also allowing the creation of relevant and better tailored campaigns targeted towards your audiences, boosting both sales and brand engagement.
It isn’t only good for business in that it leads to more accurate advertising and targeting, and in turn, better sales, it’s also good for wider brand image and relations, helping to deepen customer trust and increase brand loyalty and engagement. With zero-party data, there are no middlemen involved that have access to the data. This doesn’t just make your data more secure, it also respects the privacy concerns of your customers, while responding to the increasing consumer expectations around personalisation, relevance and the convenience of their shopping experience.
Gathering zero-party data
Research indicates that on average, 74% of consumers are willing to share key data points like preferences, interests and demographic data directly with brands if it would improve their online experiences, with around 71% happy to share an email address if it would provide personalised ads and offers.
While consumers are willing to part with their data, the process must be both easy and convenient. Similarly, effectively gathering zero-party data requires brands to emphasise the benefits of doing so, usually through incentivising it and offering something of value in exchange, like a coupon code or some form of exclusive content. Brands may utilise surveys or other interactive content to gather consumer preferences on a basic level, or perhaps offer loyalty programmes that come with additional perks, like exclusive offers and services.
Final thoughts
Zero-party data is driven by a mutually beneficial exchange between audiences and brands, enabling marketers to access highly accurate and relevant preferences for their campaigns, while providing better, more targeted experiences to customers.
With third-party cookies rapidly becoming a thing of the past, brands must look to a mixture of both first- and zero-party data if they are to retain a competitive edge, while respecting the privacy concerns of their audiences and the regulatory landscape around data collection.
