How a focus on zero-party data can help businesses move forward

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The COVID-19 pandemic has unsurprisingly led to an increase in online usage, as workplaces have been shut down and people have been forced to seek socialization in new ways. With the skyrocketing of online usage, growing concerns about user privacy have surfaced.

As consumers flocked online, companies collected more and more data. This came to a head, however, in June 2020, when Apple introduced a new privacy information section for product pages on its App Store, which gave customers greater transparency and understanding of data than consumers. apps collect about them. Since then, Big Tech has continued to introduce privacy rules designed to protect consumer data from third-party data sharing and cookies.

States have also adopted consumer privacy laws to varying degrees, with California passing the most stringent law to date, the California Consumer Privacy Act. Utah was the last to pass consumer privacy laws in March, and Connecticut announced it would become the fifth state to join the ranks, along with Virginia and Colorado.

The passage of these changes and consumer privacy laws has marketers wondering what's next. We know that third-party data and cookies disappear. As a result, marketers have slowly started moving to first and zero-party data. How can brands utilize these underutilized resources?

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First-party data, or consented data that a company collects about its existing customers, comes from loyalty programs, online purchases, and more. The problem, however, is that finding new customers and new data can be a challenge because companies essentially operate in a vacuum. Because they only have data on their existing customer base, there is a lack of new customers that they are not reaching.

Zero-party data, on the other hand, offers opportunities and insights that proprietary data simply cannot provide. Coined by Forrester Research in 2018, zero-party data is defined as data that “a customer intentionally and proactively shares with a brand. This can include preference center data, purchase intent, personal context, and how the individual wants the brand to recognize them."

It can be a marketer's most valuable resource because it doesn't depreciate over time. On the contrary, it evolves. Ultimately, it provides real deterministic and verifiable sources of truth, and it provides real value for building and targeting audiences with the right offers at the right times.

The depth and breadth of consumer insights that zero-party data captures is far greater than that captured by first-party data. Putting it together, however, can be a challenge. How can a company convince consumers to voluntarily give out personal information when they start...