What is Zero-Party Data? Definition, Examples & Use Cases

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Data can be a confusing subject, with a ton of different terms floating around. 

Have you ever heard someone talking about zero-party data and found yourself nodding along, but not really understanding what they were talking about? 

You are definitely not alone, and this article aims to help with that! We dive deep, looking at all your burning questions and hopefully demystifying the entire process. We’ll cover:

  • What zero-party data actually is, including examples and why it’s important
  • How to collect zero-party data
  • Examples of third-party data companies
  • Key differences between zero-party and first-party data.

Let’s get into it!

Key Takeaways

For the TLDR crowd, here’s the upshot of what we get into in this article!

  • Zero-party data is data that is shared directly with brands by consumers. The process is transparent and encourages trust
  • Zero-party data is accurate, boosts trust, increases relevance, and future-proofs businesses
  • Quizzes, customization, and loyalty programs are tools that are being used to gather zero-party data
  • Zero-party data differs from first-party data in that the focus is on preferences, rather than tracking behaviors.

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What is Zero-Party Data?

zero-party data definition

Okay, but what is zero-party data? 

In a nutshell, it’s information that is shared “intentionally and proactively” with brands, by consumers.

It’s not gathered from companies tracking your every move online; instead, it’s information that comes directly from you! 

Companies used to rely entirely on third-party data (bought from data companies) or first-party data (generated from user interactions. 

With an increased focus on privacy, as well as the limitations of first-party and third-party data, a different way to collect consumer information was needed. 

Zero-party data aims to let customers control the information they share with brands directly.

No guesswork, and no privacy breaches – just sharing information voluntarily!

Why is zero-party data important?

Data is essential for marketing any successful campaign. It means your marketing strategy can be tailored and targeted so that you’re not wasting money on marketing to people who aren’t interested.

Zero-party data is:

  • Accurate: When consumers share their preferences directly, the insights you get will be more accurate
  • Builds trust: Brands that use zero-party data will be seen as more trustworthy and transparent. In a world of privacy breaches, the importance of this can’t be overstated!
  • Relevant: Zero-party data lets you create super personalized campaigns that are designed to resonate with your audience. This means better conversion rates and more engagement
  • Future-proofing: Let’s be honest – data protection laws and consumer preferences are constantly changing. Third-party cookies could soon be obsolete, and marketers who are early adopters of Zero Party data are future-proofing their businesses.

Zero-Party Data Examples

Zero-party data allows for greater personalization, with users being able to share what they want with brands.

Some examples include:

Sephora uses quizzes to help buyers discover the best beauty products to suit them. This allows users to directly and willingly share their information with Sephora directly. 

Nike’s By You tool allows buyers to design their own shoes. This allows Nike to gather information about what users want in their footwear directly from the customer.

How to Collect Zero-Party Data

  • Quizzes and surveys: Using surveys or quizzes either on a website or through social media is a great way to collect zero-party data. Think of Sephora’s skincare quizzes; they are able to tailor product recommendations thanks to user data.
  • Customizing tools: If you allow customers to design their perfect product, you’re getting valuable information about their preferences and what they want.
  • Preference centers: It’s becoming more common for websites to allow users to choose the type of content they want to see. For example, Medium lets users choose their interests out of a list of topics. This lets the website target which articles to show the reader, leading to a more satisfied customer.
  • Loyalty programs: Consumers share their preferences when signing up for loyalty programs. This lets brands tailor future offers and promotions to the customer.

Third-Party Data Companies

Adobe: Along with many other offerings, Adobe offers Audience Manager, a platform that uses third-party data to help create audience profiles

Experian: As well as credit reporting, Experian also sells data and analytics services to businesses. 

Oracle: This company provides data that helps advertisers target and reach audiences across a variety of platforms. 

Nielsen: A global company that provides insights into consumer trends and behaviors worldwide. 

IHS Markit: This company specializes in analytics, giving insights into various industry trends so that businesses can make informed marketing decisions.

Zero-Party Data vs. First-Party Data

While first-party data is also collected directly from customers, it is deduced based on the interactions your customers have with your business rather than from them directly sharing their preferences.

Zero-party dataFirst-party data
Shared proactively from customersCollected from user interactions
Users actively and knowingly provide the dataData is collected without the users’ knowledge
Data consists of user preferences, wants, and needsData consists of how the user has behaved, such as clicks, purchases, and page views
Very accurateAccurate, but of behavior rather than preferences

So, should you be using zero-party or first-party data? There’s a place for both of them.

Zero-party data is great at accurately reflecting preferences and building trust, while first-party data offers insight into the actual behavior of consumers. 

Many brands choose to use both for a comprehensive insight into their consumer habits.

Wrapping Up

Well done for reaching the end of the guide! It’s a lot to take in, but the way to master these ideas is to stay consistent and keep learning. 

Staying curious and focused on learning and discovery is key! There’s so much to learn in the world of data, and it’s constantly evolving and changing. The only way to keep up is to swim with the tide!

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Donny is the founder of SMB Guide. He is a seasoned small business owner and entrepreneur, with over 17+ years of experience growing and building companies. He is a well traveled and multi-faceted individual with several successful six figure business exits.