Data is usually divided into First, Second and Third party data. These terms are often used in relation to market evolutions driven by both privacy legislation and changes in consumer attitudes towards their personal data. Recently, Forrester also introduced the term 'Zero Party Data'.
But what exactly is meant with this data categorization? And why are Zero and First Party Data becoming so important for your business operations?
Zero Party Data? Barometer of customer confidence!
Zero and first party data are the data that a company collects itself. First Party data is the customer information you collect directly through your own sources and channels: internet behavior, transactions (downloads, purchases, ...) or demographic data, including surf and click behavior.
Recently, Forrester introduced the term 'Zero Party Data'. These are the data that a customer intentionally and proactively shares with a brand. This can be information about your customer’s preferences (e.g. via an online preference center'), purchase intentions, personal context or how the individual wants the brand to recognize him or her. It is a barometer for a customer's trust in the brand and should be considered an important KPI.
Why a Zero and First Party Data strategy is important now more than ever
Soon, third party cookies will disappear from Google. This means that, as a company, you will only have limited access to the 70% of internet users who use Google as their browser. This will have a major impact on existing marketing activities, such as programmatic media, cross-site retargeting, creation of look-a-like campaigns, capping and measuring impressions, analytics and reporting. But this does create a competitive advantage for companies that have collected their own data and can set up smart personalized campaigns.
Benefits of collecting Zero and First Party data
- Quality and accuracy: since the data comes directly from the individual, you can be sure that your customer wants to hear from you
- Relevance: based on the given preferences you can determine exactly how your customers want to interact with your brand
- Cheap : Since it already exists within your systems, collecting zero-party data is very cost-effective. Unlike other data collection types (second- and third- party), you don’t pay for zero-party data as customers simply hand it over.
- Compliant : With First and Zero Party Data you can fully manage your compliancy, because you know the source and the way in which the data was collected. Just make sure your data is collected, managed and used in a GDPR and data quality native way!
- Important : Do not ask for too much information at once, but spread the collection of this type of data over time.
However, your own data may sometimes be insufficient to efficiently achieve your business/marketing objectives. And then you can call on Second or Third Party Data. Read more about Second and Third Party Data