AiThority: Zero-Party Data: What It Is, How It Can Benefit Your Business, and How It’s Different From Other Data Types
Did you know that as of this May, 97.2 percent of companies are investing in artificial intelligence (AI) and big data? Aside from data being at the forefront of numerous B2B companies operating in a variety of industries, significant value is placed on consumer data, especially regarding what happens with it both short and long-term.
Although different types of data are commonly used within the B2B world, zero-party data is one specific type that has attracted a plethora of companies in recent years. Just like other data types, zero-party data (ZPD) is uniquely beneficial, but particularly because it’s shared and offered by customers and/or prospects. To learn more about ZPD and how it’s gathered, its array of benefits, and how it stands out from other data types, keep on reading!
What Is Zero-Party Data, and Why is It Significant?
When you visit a website, do you share any contact information like an email address to receive something in return such as a research report, newsletter, or whitepaper?
If so, it’s usually for a purposeful reason, which can be described as a value exchange. Value exchange is when a brand or website offers something specific at one point in time, and website visitors exchange their contact information to receive the offer.
This brings us to zero-party data.
Zero Party Data or ZPD is essentially data that’s proactively and intentionally shared with a brand by customers and/or prospects. The data itself may include purchase intentions, personal context, preference center data, and in which ways an individual prefers a brand to recognize them. Instead of using cookies, cross-device identification, or tracking pixels, zero-party data is solely gathered from what customers and/or prospects willingly share.
Primarily, ZPD is collected through different methods such as web forms, surveys, questionnaires, gated content, and contests. Whenever brands receive zero-party data, it’s important to deliver value promptly.
Why should you consider using zero-party data though, and how can it benefit your business?
Major Zero-Party Data Benefits & Reasons For Usage
Recently, more and more B2B marketers and industry experts have revealed that ZPD is a significant area that’ll likely push personalized efforts ahead as well as marketing campaigns in the years to come. If your brand is interested in establishing relationships with prospects, consider encouraging your marketing and sales team to collect and use zero-party data. Your marketing team can use zero-party data to enhance and improve various marketing activities.
In general, zero-party data is multi-beneficial, but especially because individuals have enough trust in a brand to openly share meaningful data that in turn, helps a brand understand customers’ needs, wants, and purchase intentions.
Regarding the specific uses of zero-party data, it can be applied to personalizing and customizing content, delivering tailored product recommendations, and tailoring other parts of digital experiences to align with customers’ preferences.
Furthermore, B2B brands put zero-party data to use by sharing information with individuals like concisely targeted surveys or polls that contain enlightening and thought-provoking questions. If used strategically, ZPD can significantly improve how brands communicate with their customers and prospects. Not only can zero-party data provide valuable insights, but it can also enhance the efficacy of a brand’s personalization efforts.
Several other key benefits to using zero-party data include its ability to help companies improve their ad campaigns, and even form long-term relationships.
How is Zero-Party Data Different From 1st, 2nd, and 3rd Party Data?
For companies, especially those in the B2B space, to make informed decisions and strategically target messages to the right audiences, what’s needed?
Data, of course, is a necessity whether it’s first-party, second-party, third-party, or zero-party data. Companies usually collect four major types of data that are used for different purposes.
According to Forrester:
“While first-party data is rich with behavioral data and implied interest, zero-party provides explicit interest and preferences–and you must use it to improve the value you provide to consumers. Firms collect first-party data through interactions with customers. This differs from zero-party data, which consumers give you in exchange for benefits from your firm.”
Additionally, regarding first-party data, brands can extract beneficial indicators regarding individuals’ intent and interests. What’s also considered first-party data is transactional data in the form of downloads and purchases. Multiple reasons why first-party data is used consist of remarketing purposes, predicting trends, upsell, reactivation, and improving audience segmentation.
Second-party data combines some of best aspects of first-party and third-party data. Which makes it an exceptionally valuable resource. So, what is it? It is the data that organizations collect straight from its audience and then sells it to another company. Essentially it is another’s organization’s first-party data.
Next is third-party data, which is purchased from data aggregators or broker firms. The data is gathered from a plethora of websites and publishers by data aggregators. Usually, third-party data is used for personalization purposes, and it can help companies run targeted campaigns in addition to reaching out to newer and broader audiences.
As time goes on, the data landscape continues to change, especially because third-party cookies are being phased out.
Fortunately, there are other options for marketers to pursue such as directly asking customers about their wants, needs, and preferences.
To this day, zero-party data is viewed by many as a hot commodity, and if your organization isn’t utilizing zero-party data yet, it’s wise to start leveraging it.