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.
Definition
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:
- Clicks
- Scrolling
- Time In-Session
- Hovering
- Purchases
- 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
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
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.
Data Collection
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:
- Quizzes
- Newsletter Signups
- Post-Purchase Surveys (like
Fairing
)
- Product Onboarding
- Contests
- 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.
Advantages |
Accuracy, Transparency |
In-House, Passive |
Disadvantages |
Requires Value-Exchange |
Requires Time Investment |
Data Collection |
Surveys, Quizzes |
On-Page, App, or Site |
Use Cases |
Improving Personalization |
Analyzing Behavior |
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.