What is zero-party data?

The cost of zero-party data is lower than third-party data, for example, because businesses don’t need to acquire it from another entity. Likewise, given that customers are now able to opt out of tracking via cookies, the overall amount of useful data a business can gain from these sources is decreasing. When providing a customer the ability to personalize their experience by identifying their preferences, a business can build trust, though it is essential to use this data and not ignore it.

Zero-party data can be used to better understand why potential customers are visiting a website or exploring products and how a business can enhance the experience of current customers. A positive side-effect of effectively using zero-party data is strengthening trust between customers and a business and demonstrating care for data privacy.

Since this data is coming directly from the customer, it has a higher value than data from other sources. Therefore, businesses should put customer preferences and desires to use as soon as they acquire this information to encourage customers to continue to provide data in the future.

Examples of how to use zero-party data include:

• Display preferences for a website or app (dark or light)
• Content choices
• Information on relevant products and services

The key difference between zero and first-party data is intent. Zero-party data is volunteered by the customer to a business, and they know what information they are giving and why. In contrast, first-party data comes from a customer’s actions on a given website, such as page views and clicks, which they don’t give on purpose. Thus, businesses infer customer desires and preferences from first-party data, while they get direct answers on what a customer wants with zero-party data.

First-party data comes from the interactions customers have with products, such as:

• How long they stay on a page
• How long they hover over a link or button
• What purchases they make
• Their delivery preferences
• What they downloaded

With this type of data, a business must interpret these behaviors to draw conclusions about what a customer wants.

The difference between zero-party data and third-party data is the source of the information. Third-party data is gathered from organizations or businesses that specialize in collecting this data. For example, this includes demographic information, buying signals (searches for software developers or building a website), and data from CRM and POS systems.

The now universal notification that appears on websites about “Third-party Cookies” is directly linked to third-party data. The adoption of zero-party data collection by businesses may lead to a reduction in the need for third-party cookies.

An example of zero-party data is when a visitor to a company’s website is asked to identify their purpose for using the site from a list of categories. The website will then show information that is relevant to their choice. In this case, the user has voluntarily given this information to the company to use.

Another example may be a survey sent to customers to obtain feedback on a product and/or service. When a business does this directly, without the use of third parties, it is gathering zero-party data from its customers to be used to enhance their experience.