In the evolving landscape of digital advertising, first-party data remains the cornerstone of successful campaigns, but the addition of zero-party data opens up new dimensions of personalisation and targeting. While first-party data provides insights into users' interactions with a brand, zero-party data brings a deeper understanding of consumer preferences and needs, enabling even more precise and effective advertising strategies.
In a previous post, Nejc Lepen, Development Director, discussed targeting based on first-party data, which has become a key form of targeting and an alternative to the use of third- party cookies, which are being phased out gradually. However, there’s more ground to cover when it comes to creating effective data-driven advertising strategies. In this post I will focus on how first-party targeting can be complemented and enriched with zero-party data.
What is zero-party data?
Direct or zero-party data constitute information that consumers voluntarily and intentionally share with companies. The purpose of providing this data is to improve the personalization, quality and relevance of the services or products that consumers receive. Unlike other types of data – first-, second- or third-party data – zero-party data does not depend on observation or inference. Instead it is acquired directly from consumers’ interactions with brands, reflecting their subjective viewpoints.
Examples of zero-party data include consumer preferences, purchase intentions, personal interests and other data shared by consumers through surveys, registration forms, apps, feedback forms or direct interactions with a brand. This type of data is highly valued for its accuracy and reliability, as it allows companies to tailor their services more effectively to the specific preferences and needs of individuals.
The main difference in the use of different types of data is that with zero-party data, the consumer is in control of their data. Consumers voluntarily share only the data they choose, granting companies permission to use it. This facilitates direct communication between the company and its customers, allowing for a deeper understanding of their preferences and the ability to personalize the user experience. This leads to increased customer satisfaction and brand loyalty. However, it also requires the use of technologically advanced analytical approaches and ethical strategies to be implemented effectively.
Why is the integration of first-party and zero-party data crucial for success?
First-party data, such as website visits, shopping habits and interactions with content, is crucial for targeted advertising in the new age of digital advertising. However, when combined with zero-party data – including explicit preferences, points of interest and direct customer responses – a more comprehensive picture of the individual emerges. This allows advertisers to tailor their message to the specific preferences and expectations of their target customers, increasing the effectiveness of their campaigns.
Better insight into user preferences allows companies to better identify potential customers and improve conversion rates. Additionally, zero-party data is an important opportunity for companies to leverage user feedback to create better products and gain a competitive advantage. Increasingly stringent privacy regulations and restrictions on third-party data make direct data increasingly important for even more accurate segmentation and targeting in an increasingly regulated media landscape.
How to use zero-party data for more effective and personalised advertising and marketing?
Zero-party data can be collected through various methods and tools, including surveys, quizzes and other interactive content that encourages users to share their interests and preferences. For instance, the iPROM OnSite solution uses push messages on websites to encourage website visitors to actively engage with interactive elements. The data collected is extremely valuable, as it allows companies to understand their customers even more precisely and offer them exactly what they are looking for.
These tools can also be integrated within advertising content. An example of the use of data collected directly from users is the advanced iPROM Survey ad format, where the user is served a second sequence of ad messages based on their choice. For example, Semenarna Ljubljana used this format to conduct a quick online consumer survey. This allowed the company to fine-tune its offering and communication with users, leading to a better understanding of price sensitivity and the identification of consumer shopping patterns.
A similar practical example is the use of iPROM Configurator, an advanced ad format used by Volkswagen to launch the new T-Cross. It allowed users to customise the car directly within the ad. This interaction improved both the user experience and allowed Volkswagen to collect specific data on customer preferences. Information on specifications and accessory choices helped Volkswagen better target its communication and offer, improve its understanding of market needs and optimise future advertising strategies.
Why is aggregating this data important for the future of digital advertising?
Once zero-party data is collected, it can be combined with first-party data to create a more detailed consumer profile. For example, if first-party data shows that a user has frequently visited a certain product category, direct data can reveal specific preferences within that category, such as colours or styles. This approach, grounded in the transparent collection of data voluntarily shared by customers, improves the effectiveness of advertising efforts and strengthens the relationship between the brand and its customers.
As consumers become increasingly aware of their privacy and suspicious of digital tracking, zero-party data offers an ethical way to collect information as its use is directly authorised and voluntarily shared by consumers. This approach not only reduces the risks associated with privacy breaches, but also improves trust between brands and their customers. By combining direct data with a valuable database of first-party data, companies can create advertising campaigns that are more tailored to the context of the consumer’s needs and preferences, more precisely targeted and better received by consumers.
By combining first-party and zero-party data, companies open new doors in digital advertising, where understanding customer needs and personalisation are key to ad campaign success. This approach improves the effectiveness of advertising activities and strengthens customer relationships. In the future, we will likely see an even greater emphasis on the ethical collection and use of consumer data, benefiting both businesses and consumers.
If you are interested in learning more about this topic or have any questions, please get in touch with me at tomaz.tomsic@iprom.eu. I have also written about combining first-party and third-party cookies, which may help you understand the basics of this topic.