Zero vs. First-party data: 4 key differences you must know

60% of senior executives are concerned about the impact of abandoning third-party cookie tracking in the near future.

Customers are increasingly voicing their displeasure and concerns about data privacy. This, coupled with the rising data privacy laws that businesses must comply with, has put marketers in a tough spot. The phasing-out of third-party cookies is bringing ‘traditional’ ad targeting to an end, opening doors to newer, customer-friendly ways to gather data.

The elimination of third-party data brings back the spotlight on zero-party and first-party data. So, how are they different from each other?

Zero-party data is the data that customers willingly or voluntarily share with businesses. In comparison, first-party data is directly collected from users based on their online behavior. Unlike third-party data that is cookie-based, zero and first-party data are privacy-first as they are collected directly from the audience, with their knowledge and consent.

With the cookie-less future steadily becoming a reality, what areas should marketers focus on to be able to collect valuable data that can fuel effective, personalized advertising strategies?

Breaking it down: Difference between zero and first-party data

Zero party data vs. the first party, what’s in focus for marketers? They are equally important areas that can give marketers much-needed insights to help create audience segments and deliver personalized ads that align with the consumer’s interests. Both zero and first-party data collection are legal, ethical, and privacy-compliant ways to collate consumer data and run successful marketing campaigns.

• Proactive vs. Passive

Zero-party data is intentionally shared by the user to receive personalized communications from the brand. First-party data is key user information collected by the brand with the user’s knowledge and permission. This typically involves adding a pixel to the brand’s website and social pages to track and document user behavior. While zero-party data is proactively gathered, first-party data is passively collated through interactions.

• Data sources

This data can be collected in various ways to understand audience interests and preferences better. Zero-party data can be collected through website form fills, newsletter signups, brand surveys, polls, chatbots, and quizzes. On the other hand, first-party data is aggregated through systems and platforms like the brand website, app, and social media handles. This includes personal information, behavioral data, product preferences, purchase history, social media, app, and email engagement.

• Insights and accuracy

While both zero and first-party data are authentic sources of customer information, they vary slightly in terms of analysis and accuracy. Since zero-party data is information directly shared by the customer, it does not require any analytics to derive insights. It is more accurate as it is received straight from the source. However, first-party data requires some analysis to derive deeper, more valuable insights and might not be as accurate/precise as zero-party data.

• Transparency and trust

The customer voluntarily shares zero-party data. They opt to provide their personal information, like name, location, email, phone, etc., in exchange for something they’d like to receive from the brand, like gated content assets or personalized offerings. First-party data collection is not as direct, and customers might not be aware that a brand is collating their information. Since it depends on a tracking pixel, businesses must let users know what information is being collected. With all the new data privacy regulations like GDPR coming into effect, businesses need to not just inform users about the first-party data that is being collected but also take their consent before tracking first-party cookies.

Zero-party data vs. the first party - Breaking it down with an example

Let’s understand this better. You are looking for a particular sustainable clothing brand and land on their website. The content interests you, and you see an option to sign up for their monthly newsletter. For this, you provide your Name, Email ID, and Location. That’s zero-party data - Personally Identifiable Information (PII) you share with the brand by choice.

When you start browsing through the website, you get a pop-up requesting to ‘Accept all.’ More often than not, you click and continue browsing. But that’s the brand requesting your consent to track your browsing movements on their site to help them understand your choices and preferences better. How much time you spend on a page, what products you browse through, what you click on, cart history, etc. - is the first-party data you are giving them access to. This information is usually stored in a business’s Customer Relationship Management (CRM) platform and leveraged to create target segments for marketing campaigns.

Going cookieless but acing targeting 

The end of third-party cookies marks the beginning of a new era of advertising that puts customers and their privacy first. While there are differences between zero-party data vs. first-party, they both matter to your business as they are integral data-sourcing methods.

Marketers can use this data to speak more personally and directly with their users through personalized and targeted campaign messaging. Contextual advertising is a great way to leverage both zero and first-party data. By leveraging this data, contextual advertising allows brands to enhance their understanding of consumer interests, giving them proof points to make more confident, data-driven business decisions.

This strategy relies on Contextual AI

to deliver ads on relevant websites that target relevant audiences without using cookies. Compliant with all data privacy regulations, hyper-personalized and highly relevant contextual advertising is coming back for all the right reasons.

Get in touch with us to know more about how we at Seedtag enable leading global brands to create best-in-class contextual advertising strategies that help maximize ROI on ad spends.