Why You Need First-Party and Zero-Party Data in a Cookieless World
By Camila Martinez-Granata
In today’s digital landscape, the most valuable resource is data. Data offers companies insights into their customers, from their demographics and interests to clues about product usage. Customer intelligence provides organizations with trillions of digital touchpoints and events to analyze and act upon. As such, leveraging these insights into actionable steps is a core pillar of successful customer experience.
This is why companies seek help from external sources and often purchase or collect data from a third-party vendor. With third-party data and its tracking codes (also known as cookies), product marketers and other lines of business owners have the capacity to analyze data that is already aggregated, segmented, and organized. In doing so, companies are able to leverage that data to deduce insights and analytics about their customers to provide them with a better service, product, and customer experience. It also allows companies to build upon customer personas and may enhance insights into current customers and leads.
As convenient as third-party data may be, the digital landscape of customer experience has shifted, and relying on third-party data simply doesn’t cut it anymore. In the last decade, there has been a massive push to eliminate cookies from web browsers. In 2020, Apple completely banned cookies from Safari, following a similar move from FireFox in 2019. Other web browsers continue to follow suit and ban cookies or allow users to block cookie permissions. In fact, nearly 40 percent of US web traffic comes from users who disable or block cookies.
Third-party data has several additional drawbacks, from issues like handling outdated data to customers’ discomfort over their information being sold:
- There is a lack of transparency in how third-party data is collected.
- The methods used to collect data may not align with customers’ preferences for privacy or permissions.
- The rise in customers disabling third-party cookies--compromises the quality of data being collected and sold by third parties.
- Unforeseen data privacy and security regulation breaches. For example, if a company purchases data from a vendor that isn’t properly vetted or reputable, they could face heavy fines or lawsuits for using data that was unethically collected by a third party.
The drawbacks of third-party vendors are significant, and companies who want to elevate their customer experience and product have to pivot to different resources.
Read on to learn how first-party data can be leveraged by companies successfully--and mitigate the problems above.
What is first-party data?
Data enterprises can begin to leverage first-party data as third-party data becomes obsolete. First-party data refers to the data and information you collect directly from your customers. Here’s how and what venues brands can collect and extract data from:
- Website visitors (daily, weekly, monthly, etc): First-party data can be done in a few different ways. Brands can collect and view how many visitors, sessions, and daily/monthly active users they have by using a CRM or analytics platform. However, being a website visitor doesn’t automatically mean you have all the first-party data you can get. Your website should have lead forms, sign-in fields, and even customer surveys to collect data.
- Email subscriptions: You can also collect first-party data through email lists, which can be submitted through your website. Leveraging opt-in subscriptions and connecting customers with workflows can grant you further insight into your customer’s preferences and interests--based on email opens, click-through rates, and pages per visit.
- Social media following and metrics: Social media is another great way to collect first-party data. Customers may be directly engaging with your brand online, via social platforms like Facebook, LinkedIn, and Twitter. You can identify and collect information about customers based on who follows your brand account, what kind of content they like and share, and even the comments they may leave. CRMs typically also pull in these metrics, including others such as impressions, interactions, and clicks.
- Information pulled from customer surveys or polls: Using surveys to learn more about a brand’s customers and their overall experience can help improve the product and the way you provide it. For example, prompting a customer satisfaction survey after an order is delivered can help you gauge if the customer was satisfied with the product, had any issues, or needed any help.
- Downloads and purchases: When a customer purchases a product or downloads an item from your site, you can use that data to offer more personalized content in the future.
This data is exclusive to your company, meaning no one else has access to it. This makes first-party data exclusive and valuable. Here are a few other benefits of investing in first-party data collection:
- Since this is data collected by your company, it is exclusive to you and gives you an advantage over competitors.
- You can control how it is collected, organized, and shared.
- The data is more relevant, as you are collecting it directly versus buying from a third-party vendor.
- Customization based on your website’s cookies. Third-party cookies made customization easier by pulling in data across the web. Now, brands have the opportunity to leverage their own cookies on their sites to remember customer preferences and offer a personalized experience. For example, if a customer visits your website to make a repeat purchase, you can customize their experience by providing suggestions based on their previous purchases or search history on your site.
What is zero-party data?
The second kind of data an enterprise can pivot to is zero-party data. Similar to first-party data, zero-party data is also directly pulled from your customers. The difference between the two, however, is that zero-party data information is freely and intentionally provided to a company by a customer.
More often than not, customers are willing to provide some of their data in exchange for better personalization and service. Unlike third-party data, the power of how much data is shared falls into the hands of the customer--giving them a better sense of agency and trust when interacting with a company. Here are a few benefits of relying on zero-party data:
- The data comes directly from the customer and is accurate and qualitative.
- Data that is shared by customers tell companies how a customer wants to be interacted with, and what is important to them.
- It’s incredibly cost-effective. Customers are providing companies with this data for free, which saves them from purchasing expensive data from third parties.
- Companies ensure that the data is ethically collected, with consent, since the customer is voluntarily providing that data.
Zero-party data can be collected in a number of ways:
- Online and in-store registration opportunities.
- Loyalty rewards programs.
- Email preference center.
- Product interests and preferences quiz.
- Social media polls.
In a cookieless world, companies need privacy-by-design analytics
It’s no longer viable to rely on cookies used by third-party vendors. The shift toward a cookieless world means that, for third-party vendors, selling data will become increasingly difficult and less effective. Although this may sound concerning, it doesn’t have to be.
First-party data is a strong source for any enterprise--when leveraged correctly. Investing in a privacy-by-design analytics platform, like Scuba, gives companies the agency to analyze all kinds of data in a comprehensive and user-friendly manner.
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