In the last few years, we have been witnessing how the world and especially people’s behavior are changing. Our attitude to privacy transformed as well. In particular, the changes affected the approach to personal data in the digital space.
With that, countries all around the world began implementing data privacy regulations. Now, marketing companies whose businesses were built on third-party cookies collections are obligated to find new ethical data collection methods. Third-party cookies are like a drawing boat, where marketers, brands, and advertisers try to leave it and stay afloat.
Let’s take a step back and find out again why third-party data is so problematic.
Previously, when users visited a website, the banner popped up informing them that the website collects cookies. Back then, not everyone was aware of what such an innocent notion of “cookies” meant and rushed to close the annoying banner. Some websites were trying to limit the options, so the users would have to agree. As a result, website visitors allowed third-party data collection. That’s how it leads to the first problem - consent. The users were forced to press “agree”.
Even more so, many companies collect users’ data without their contest. For instance, Zoho Privacy Survey Finds 62% of businesses don’t tell their customers about third-party ad trackers collecting their data.
Another reason is privacy invasion. Businesses managing third-party cookies track user activities on the web and then often sell the collected data without the consumer being aware of it.
Third, there is a big risk behind personal data storage. The data could be leaked or fall into the hands of scammers.
Nevertheless, the positive changes regarding the data collection are already happening. Google announced that it will stop the use of third-party cookies in Chrome by the end of 2023. Apple, in its turn, within iOS 14.5 and latest versions, implemented the requirement to ask users for permission to track them across apps and websites. Moreover, there are several solutions on the market to collect the users’ data harmlessly. However, it is still unclear whether some of these solutions are entire “non-cookie based” or a combination of methods.
In a world where people are sensitive about their data protection must exist an ethical solution. And that’s how the zero-party data gets in the game.
Imagine a world where the users can voluntarily and proactively share their data, deciding to whom and what kind of information to provide transparently. Such data is considered as zero-party data.
What differentiates zero-party data from first, second, and third-party data is the customer-centricity, transparency, and respect for the intentions of the customer.
There are several principles on which zero-party data is based:
One of the requirements of GDPR is transparency while collecting data. What does this mean? When a company asks its web visitors for some additional information, it clearly states what information will be kept and how it will be used.
Transparency when utilizing data means a company respects customers decision to reinforce their zero-party data and helps to do that. The customer doesn’t need to do anything excessive – a simple message addressed to the brand must be enough.
The customer’s preferences can change. The ability to change user preferences will not only benefit businesses but improve the service and tighten the business-customer relationship.
So we learned what zero-party data is. Now there is a question: how to collect it? It might not be as easy as it seems. The main challenge is to build the customer trust before they would consider sharing with the brand their personal information. But as a bonus, the company will receive valuable, trustworthy data!
There are several ways in how zero-party data can be collected.
Discovery surveys and quizzes could be an option to help customers receive a personalized experience. Thus, brands explicitly ask their web visitors about their preferences to offer a particular product according to the survey results.
Some companies, like NARS Cosmetics, already implement the quizzes as a part of their zero-party data collection strategy. Their survey “Lip shade finder quiz“ interrogates the consumer about their mood, beauty mantra, going-out look and skin tone, and other questions via mail. After the company receives the survey results, they provide their customers with recommendations on the products.
This method is a bit similar to the previous one. In this case, companies create an absolutely new product or service according to the customer preferences.
Proven Skincare uses this method. They invite their customers for the “Skin quiz”. After receiving quiz answers, Proven Skincare creates a personalized skincare routine for each customer.
Unlike the previous ones, this method focuses on learning who the customers are. The main prerequisite is customer trust and loyalty. Customers, in their turn, will appreciate the special attention they receive. It works on the exchange base: consumers share their basic information such as date of birth, profession, name, and email, and in return, they receive a small award.
For example, Starbucks offers a free drink to the members of the “Starbucks reward account” on their birthday.
Many brands have already been using preference centers for a long time. This strategy creates a users’ database where they can voluntarily share their interests. Think about Spotify: when the user signs up for the first time, they choose the preferred artists, so the app can recommend other music. Same with Pinterest: it suggests choosing topics the user likes and automatically selecting the pictures for them. Amazon, for one, has an advanced preference center, where users can fill it up with information about their interests and modify it. Accor Group suggests their loyalty program members mention their interests and use them to create a better guest experience.
And this is not the final list. Soon there will be more zero-party data collection methods.
Despite the fact that zero-party data makes an impression of the good resolution of personal data collection, there are still some challenges.
One of the biggest challenges will be encouraging customers to provide their data. The brands would have to ensure that this is for their own benefit.
This leads to the second issue: didn’t the exact same thing happen with the third-party cookies collection? Marketers used to claim that third-party cookies actually benefit their customers...
We would have to find a way to ask customers for their data ethically and without pressure.
Another challenge is the way the brands inform about zero-party data collection. In all examples listed in this article, companies only indirectly ask their customers to consent for zero-party data collection. It’s doubtful that users were clearly informed about the method and purpose of their data usage.
Consequently, it might be suggested that despite all the good intentions of zero-party data, there is still room for abuse. Just like with any other personal data, zero-party data requires protection as it can be leaked or sold to scammers.
Despite all the doubts, the world is changing and becoming safer for private data. Indeed, the old unethical data collection method will be a lesson for the future for marketers. Zero-party data is a new beginning that will pave the path to other more ethical marketing and data collection methods.