Zero-party data: challenges, methods and benefits

Used for many years now, cookies feed website databases with information about their users.

As a reminder, a cookie is a text file stored on the hard disk of a terminal used when visiting a website or displaying online advertising. As they can only be read by their sender, cookies enable the sender to recognize the terminal in question each time it comes into contact with a cookie from that sender.

Advertising cookies are mainly used for marketing purposes, to help personalize content and offers. They fall into several categories:

• First-party data: data collected directly from a company’s own channels (e.g. websites, mobile applications). This data, obtained from its own resources, will be used for its own marketing needs.
• Second-party data: this corresponds to first-party data provided by the company’s commercial partners.
• Third-party data (or third-party cookies): data purchased from external suppliers specializing in large-scale data collection and analysis. This type of data includes information such as gender, income, pages and groups followed on social networks.

System evolution

While the personalization of offers made possible by the use of cookies is beneficial for both companies and consumers, the protection of Internet users’ privacy puts a damper on the picture.

Regulations such as the RGPD in the European Union or the CCPA in California, which aim to protect users’ personal information, began to apply in 2018 and have already imposed numerous changes on all websites.

These changes include the use of banners to manage the activation of certain cookies.

The main conditions to be met in Europe today are, for example:

• The fact that users consent to the activation of cookies and are aware of the specific uses of their data;
• The possibility for them to activate the cookies they want and deactivate others;
• The right of withdrawal and the possibility of withdrawing one’s data ;
• Safekeeping of consents as legal documents ;
• Renewal of consents every year or every 6 months.

A number of major browsers have also announced a ban on third-party cookies on their platforms. These include Safari, Mozilla Firefox and Google Chrome, which has announced it will remove third-party cookies from its browser by 2023.

Personalizing the customer experience

The era of third-party cookies is coming to an end, paradoxically at a time when the need for personalization is growing ever stronger.

The personalization of the customer experience has become essential in the world of marketing. It brings many benefits, both to companies and to their customers. The driving force behind personalized experiences is data. It is thanks to the precise and varied information known about its consumers that a company can propose offers and journeys that are truly adapted to each individual. Personalization is therefore impossible without data collection.
The benefits of personalization include the following:

• For the company:
  • Differentiation and brand image,
  • Building consumer loyalty and improving the customer experience,
  • Optimize the ROI of your marketing actions,
• For the customer:
  • Quality shopping experience,
  • Time-saving research,
  • More relevant product and service proposals.

The arrival of zero-party data

To offer a personalized customer experience and win or retain buyers, it’s essential to have accurate data about them.

Zero-party data refers to consumer information that is knowingly provided by consumers to companies, with full knowledge of its possible marketing uses.
This source of information represents a viable solution in a climate where laws are increasingly protecting consumer data, and accuracy is mandatory.

Gathering this information tends to create a relationship of trust with consumers.

Companies can then better understand the needs, desires and purchasing intentions of their target clientele. This will be more valuable data than generic information purchased from data providers.

Data collection methods

To collect zero-party data, it’s possible to use various interactions such as quizzes, surveys or other creative experiences. One solution may be to offer something of value in return, so that the customer finds it worthwhile to share his or her information: an entertaining or interesting experience, discount codes, gifts, a prize draw, exclusive content, etc.

Zero-party data can therefore be used to create personalized campaigns that appeal to consumers, build trust and transform futile marketing efforts into impactful actions.
The most popular zero-party data collection methods today rely mainly on three channels:

• The company’s website: tracking consumer interests via questionnaires, or during registration;
• Social networks: many tools can be used on social networks to question your subscribers, for example using polls on Twitter or Instagram ;
• Email: Email campaigns can be very effective, especially when the company is running competitions or promotional offers.

A zero-party data collection approach has many advantages, including:

• Compliance with legislation: as long as RGPD conditions are met, the use of zero-party data in Europe is permitted.
• Data accuracy: the use of precise and accurate data is mandatory to personalize an offer. In this case, the information comes from the source, the consumer.
• Cost savings: as data is retrieved from consumers, obtaining zero-party data is less costly than purchasing data from third-party suppliers.
• Better targeting: consumers who participate in the exchange of information are more likely to be interested and open to offers.
• A relationship of trust with the community: to convince consumers to share their information, it’s imperative to create a bond of trust with them, and to be completely transparent about the collection process and its intended uses.
• Data richness: consumers can be asked about anything that would improve their shopping experience. Unlike data purchased via third-party cookies, it’s possible to obtain much more information than just date of birth, income or purchase history. It is possible to direct the information towards the future, and find out about purchasing intentions, tastes, projects and aspirations.

Conclusion

Zero-party data is likely to be the flagship data source of the post-RGPD era. Provided it complies with the guidelines established by the regulations, it will enable a very high-potential trading ground.

To convince consumers to share this data, companies will need to implement solid marketing strategies, especially in the face of widespread mistrust.

While maintaining the objective of always offering an optimized customer experience, they will need to be able to define the best methods for gathering information for their offer, and also the most appropriate moment for exchange.

A careful selection of the information to be retrieved must be made so as not to overwhelm consumers with too many questions. The risk is that they will become bored and start answering incorrectly, in order to finish as quickly as possible.

It is therefore important to collect only the information that will be used for marketing purposes, and above all to remember that the relationship they establish with their consumers must be based on trust and transparency.

Alexandre KHADIVI