Blog post

The rising importance of zero-party data for personalization

Third party data has been in the news a lot recently with Google delaying its deprecation of third-party tracking cookies in Chrome to the end of 2023. When it happens, this change will leave organizations relying on insights from first- and zero-party data. But what exactly is third-, second-, first-, and zero-party data? What do they mean for your organization? And how can you use first- and zero-party data to offer more personalized shopping experiences to improve brand loyalty?

The types of data your company can harness

> Third-party data

What is it? Third-party data is gathered by tracking users across different websites to provide advertising and retargeting services.

Pros: It gives you access to a wealth of information about your user’s behavior.

Cons: It has already been removed from Safari and Apple devices, reducing its reach. Additionally, as third-party data is sold to multiple companies, your organization won’t have exclusive rights to the data. Plus, a lot of compliance issues can arise from using third-party data.

> Second-party data

What is it? Second-party data involves a single seller gathering data from their users to sell it to another organization that has an overlapping target audience. In other words, this is basically first-party data that you have purchased from another organization.

Pros: It is transparent, and you can be confident about its accuracy.

Cons: You need to be certain that you trust the seller in order to get the most out of this data.

> First-party data

What is it? First-party data is the information directly collected by organizations through their own channels (e.g. apps, websites, social media, SMS, and email). By accepting cookies, users give explicit consent for organizations to track them in this way.

Pros: It is crucial for customer retention by keeping customers happy, improving the user experience, and making personalization more impactful as it helps you predict and understand the behavior of your users.

Cons: Capturing and using first-party data effectively can be time consuming, and you can only use this data if you have user consent.

> Zero-party data

What is it? Zero-party data is any data that your customers intentionally share with you, such as purchase intentions, personal context, and communication preferences.

Pros: As zero-party data uncovers customer frustrations, uncertainties, and motivations, it enables you to treat every customer as an individual, personalize their experience with your brand, and build real relationships. Plus, as you collected this data yourself, you know that it is accurate and trustworthy.

Cons: Customers have an expectation of a value transaction in exchange for their data. This means that organizations need to be certain they can provide this value, in the form of a tailored experience, if they wish to gather zero-party data.

Party data and personalized experiences

The key question is: which type of party data is the most important for your business? The short answer is the closer the data is to your customer, the better. Both first- and zero-party data come directly from your customers, making it your strongest resource.

Furthermore, organizations are increasingly running into the personalization-and-privacy paradox, where customers expect true personalization with tailor-made recommendations while the government increases legislation around privacy and implements data controls. The answer is first- and zero-party data, given freely to your organization by your customers.

Collecting zero-party data

While it’s easy to say data that comes directly from your customers is the most useful, it can be a challenge to actually gather it. Zero-party data can be collected from a variety of sources including your email preference center, quizzes, social stories, and polls. Froomle’s Personal Shopper is one such tool that has increased conversions, average order value, and CTR for organisations like Dreamland toy shops. In the news landscape, Froomle's News From Your Region Module is also using zero party data.

Harness the power of your zero-party data with Froomle

Are you interested in discovering how Froomle can help your organization to benefit more from your first- and zero-party data? Watch our webinar on personalization in a world of cookies hosted by Bart Goethals, our CTO and Co-founder, and contact us to arrange a call with one of our personalization specialists.

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