Zero-Party Data vs First-Party Data: Know the Difference
With the impending death of the third-party cookie upon us, brands and businesses are scrambling to find new ways to gather actionable data from their customers to improve personalized experiences, fine-tune marketing strategies, and drive revenue.
This drastic change to the digital marketing and Ecommerce landscape has thrust new data collection strategies - like first-party and zero-party data - into the spotlight.
Some businesses have already made the switch from third-party data to first or zero-party, but most are still trying to get a grasp on the fundamental differences, advantages, and disadvantages of these data-capturing philosophies.
That’s why we’re breaking down everything you need to know about first-party and zero-party data (ZDP) to make an informed (and profitable!) choice for your brand.
What's the Difference Between Zero-Party Data and First-Party Data?
Let’s dive right into discussing the differences between ZDP and first-party data! Let’s take a look at the definitions, advantages, disadvantages, and popular collection strategies for each.
First things first, the fundamentals. Just what exactly are zero and first-party data?
What is Zero-Party Data?
It’s data collected with the consent and willing participation of your customers. When collecting ZDP brands typically leverages a value exchange for customers’ information, like gated content, exclusive offers, or advanced personalized experiences.
ZDP’s popularity and success lie in its transparency and accuracy. As digital privacy concerns and regulations become more common, customers are looking for ways to take back control of their data. By “letting them in on” your data collection process, you can build trust and brand loyalty that drives growth and repeat business.
What is First-Party Data?
First-party data is captured on your sites, apps, and pages. First-person data relies on passively monitoring a variety of behaviors that can indicate interest, such as:
- Time In-Session
- And downloads
Tracking, aggregating, and analyzing these behaviors allows brands to gain actionable insights and indicators that can be used to improve customer experience personalization, product preferences, and more.
Advantages of Zero-Party Data
The most significant advantage over first-party data is its accuracy. Since brands are engaging with and soliciting feedback directly, they can be confident that their data sets and analysis are built on solid foundations. Zero-party data is also the most ethical way to source customer data, making it a fan favorite of digital privacy advocates.
Advantages of First-Party Data
First-party data is advantageous because, like ZDP, it’s captured directly by your brand. While the data may not be as complete or insightful, first-party data is still an in-house solution that can seriously improve Ecommerce growth and sales when implemented correctly.
Disadvantages of Zero-Party Data
Capturing ZDP typically requires a value exchange, which can grow tricky over time. Brands may struggle to come up with compelling offers that encourage certain portions of their customer base to engage with their surveys or questionnaires.
Disadvantages of First-Party Data
First-party data has one major flaw - it takes a significant time investment before it starts providing ROI. First-party data analysis also requires substantial amounts of data to be effective, which can present a serious stumbling block when trying to attract and retain new customers.
Whether your collecting zero or first-party data it’s best to pass that information along to your CRM or CDP. That way it’s connecting to the rest of your tech stack and helping inform your decisions.
How to Collect Zero-Party Data
You collect ZDP through a value exchange with your customers. You’re often giving them something that they want like a reward or incentive in exchange for their information.
The important thing here is that it isn’t required for your customers to give you their information. If they are required to give you their information, like when giving you their email for receipt delivery, that isn’t zero-party data.
Here are a few examples of how to collect ZDP:
- Newsletter Signups
- Post-Purchase Surveys (like Fairing)
- Product Onboarding
- Communication Preferences
How to Collect First-Party Data
First-party data is collected directly from customers’ interactions with your brand. You can capture how they are engaging with your website, social media, or app.
A few examples of first-party data include:
- Items purchased
- Behavioral data, like interactions with your site
- Social media information
- Links clicked from emails
- User details such as age or gender
What Should You Choose: Zero-Party or First-Party Data?
Your brand will benefit from both zero and first-party data, but which you use at any given time is going to depend on your use case.
If you need to know what your customers’ thoughts, opinions, and preferences are then you’re going to need ZDP. First-party data shows you how your customers engage with your brand and analyzing that behavior can help you get to know your customers much better.
FAQs About Zero-Party vs First-Party Data
Is using only first-party data ineffective?
No, using only first-party data isn’t necessarily ineffective. However, it will take much longer to build an actionable data set than if you combine your first-party data strategy with a more proactive approach, like ZDP collection.
First-party data builds slowly over time, whereas ZDP begins immediately capturing valuable information.
Can you use your 1st party data to target customers?
Yes, you can use first-party data to target customers. First-party data can help shape, optimize, and enhance your marketing strategies and retargeting and advertising capabilities.
However, because first-party data takes longer timelines to generate actionable data sets, it works best when combined with another data capturing strategy, like zero-party.
Can I collect zero-party and first-party data at the same time?
Yes, you can collect zero-party and first-party data at the same time. First-party data capture data about consumer behaviors when they interact with a brand or business’ app or website, making it a perfect partner for zero-party data post-transaction surveys or post-purchase behavior questionnaires that live on your company’s site, socials, or email list.
Should I stop collecting first-party data and just focus on zero-party data?
If you can only choose one of the two data collection methods…go with ZDP collection. While first-party data can be extremely useful, it takes a significant investment of time and resources to build, organize, and manage first-party data sets. Conversely, ZDP empowers brands to begin collecting actionable data instantly.
What is a Cookie-less world?
A cookie-less world describes the fast-approaching “new normal” for digital marketers and Ecommerce brands.
With ultra-popular browsers like Apple Safari, Google Chrome, and Mozilla Firefox announcing plans to block, ban, or phase out third-party cookies, tried-and-true digital marketing, and sales tools, techniques, and philosophies will become outdated and irrelevant.
Fortunately, new strategies are filling the gaps left by the death of third-party cookies.
Collect Zero-Party Data and Personalize Customer Experience
Zero and first-party data are both essential tools for your brand when collecting customer data and crafting personalized customer experiences. First-party data provides you with a more passive approach to collecting customer data, though it’s slower to show a return. But ZDP has the advantage when you need greater accuracy and trust in your data, not to mention it’s the ethical choice in data collection.
Both data types can help you improve your customer experience as you shift away from third-party data.
If you're looking to move away from outdated data collection methods and start collecting zero-party data in minutes, try out our post-purchase survey app on your Shopify store.