What is zero-party data?

Marketers today are increasingly talking about “zero-party data.” Experts have identified zero-party data as a major area that will drive marketing personalization efforts and campaigns in 2024 and beyond. We’ll take a look at what zero-party data is, why it’s important, and examples of it in action to fuel personalization.

Before we define zero-party data, let’s back up a little and look at some of the other types of data that drive personalized experiences.

• First-party data: In the context of personalization, we’re often talking about first-party behavioral data, which encompasses an individual’s site-wide, app-wide, and on-page behaviors. This also includes the person’s clicks and in-depth behavior (such as hovering, scrolling, and active time spent), session context, and how that person engages with personalized experiences. With first-party data, you glean valuable indicators into an individual’s interests and intent. Transactional data, such as purchases and downloads, is considered first-party data, too.
• Third-party data: Obtained or purchased from sites and sources that aren’t your own, third-party data used in personalization typically includes demographic information, firmographic data, buying signals (e.g., in the market for a new home or new software), and additional information from CRM, POS, and call center systems.

Zero-party data, a term coined by Forrester Research, is also referred to as explicit data. Forrester Research’s definition of zero-party data is as follows:

"Zero-party data is that which a customer intentionally and proactively shares with a brand. It can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize [them]."

Forrester’s Fatemeh Khatibloo, VP principal analyst, notes in a video interview with Wayin (now Cheetah Digital) that zero-party data “is gold. … When a customer trusts a brand enough to provide this really meaningful data, it means that the brand doesn’t have to go off and infer what the customer wants or what [their] intentions are.”

There’s the privacy factor to keep in mind too, another reason why zero-party data – in enabling and encouraging individuals to willingly provide information and validate their intent – is becoming a more important part of the personalization data mix.

As industry regulations such as GDPR and the CCPA put a heightened focus on safeguarding consumer privacy, and as more browsers move to phase out third-party cookies and allow users to easily opt out of being tracked, marketers are placing a greater premium and reliance on data that their audiences knowingly and voluntarily give them.

Experts also agree that zero-party data is more definitive and trustworthy than other forms of data since it’s coming straight from the source. And while that’s not to say all people self-report accurately (web forms often show a large number of visitors are accountants, by profession, which is the first field in the drop-down menu), zero-party data is still considered a very timely and reliable basis for personalization.

You’re not getting something for nothing with zero-party data. When customers and prospects give and entrust you with their data, you need to provide value right away in return. This could take the form of: “We’d love you to take this quick survey, so we can serve you with the right products and offers.”

But don’t let the data fall into the void. If you don’t listen and respond, it can be detrimental to your cause. It’s important to honor the implied promise to follow up. As a basic example, if you ask a site visitor: “Which color do you prefer – red or blue?” and they choose red, you don’t want to then say, “Ok, here’s a blue website.” Today, two weeks from now, and until they tell or show you differently, the website’s color scheme should be red for that person.

While this example is simplistic, the concept can be applied to personalizing content, product recommendations, and other aspects of digital experiences to map to individuals’ stated preferences.

Let’s take an in-depth look at one interesting application of zero-party data: surveys and polls. Brief, targeted surveys with illuminating questions are one good way to put zero-party data to immediate use. Using personalization and real-time interaction management technology, you can use the information that someone gives you to dynamically and instantly personalize their experience.

Here’s a real-world example: Business Development Bank of Canada (BDC) deploys surveys strategically and effectively. New visitors to the bank’s website see a one-question survey (“What’s your business goal?”), prominently incorporated into the hero area near the top of the site. Options include “managing my cash flow,” “finding the right loan,” and “getting new customers.”

How visitors respond dictates what they see next, with BDC immediately presenting content and solutions that map to each person’s stated needs. For example, a visitor who chooses “finding the right loan” will see the content on how to get financing. Subsequent site visits also prioritize similar information on the homepage.