Businesses are increasingly recognizing the importance of data in making informed decisions about their target audiences and preferences as the world of digital marketing evolves.
Companies are exploring new methods of data collection, however, with growing concerns about data privacy and ad-blocking software.
Marketing professionals are turning their attention to zero-party data as one solution that is gaining traction.
A zero-party data set is information consumers freely and proactively share with brands or any other party using various survey techniques. "Zero-party" means consumers initiate data sharing without being rewarded or incentivized.
The benefits of using zero-party data in digital marketing are immense.
Here are five benefits to implement a zero-party data strategy:
1. More Accurate and Relevant Data ‘driving precision marketing’
The accuracy and relevance of zero-party data is higher than that of third-party data. Data collected from zero-party sources allows brands to collect precisely the information they need, such as product preferences and purchase intent, and segment users to create better targetable audiences. The result is a higher return on investment and a higher conversion rate since they are able to tailor their messaging and offers to each individual consumer.
2. Post-third-party cookies deprecation
The value of zero-party data has only increased since third-party cookies were deprecated. The third-party cookie has long been the backbone of digital advertising, allowing advertisers to track and target users across the web. With browsers like Safari and Firefox blocking third-party cookies by default, and Google phasing out third-party cookies in Chrome by 2024, the advertising industry faces significant challenges.
The absence of third-party cookies will force advertisers to find alternative ways to track and target users. Hence the importance of zero-party data. Zero-party data offers a privacy-friendly solution that provides greater accuracy and control over ad targeting. In contrast to third-party data, which is based on assumptions and extrapolations, zero-party data is based on actual consumer behavior and preferences.
3. Competitive Advantage
With a better understanding of their customers, brands are able to create a more personalized and relevant experience that differentiates them from their competition. As a result, customers will be more loyal and ROI will be higher. Additionally, zero-party data can help digital marketers identify new trends and opportunities they might not have identified otherwise, giving them an advantage over their competition.
4. More Ethical and Compliant Data Collection
Compared to other types of data, zero-party data is more ethical and compliant. As data privacy and protection become more of a priority, businesses are being held to higher standards of transparency and accountability. In recent years, consumers have become more aware of their rights and are demanding more control over their personal information. As a result of collecting zero-party data, brands demonstrate their respect for their customers' privacy and willingness to interact with them according to their preferences.
5. Direct Relationship with Customers
By utilizing zero-party data, brands can establish a direct relationship with their customers, based on trust and transparency. Providing zero-party data indicates that a consumer is willing to engage with the brand and wants a more personalized experience. A deeper understanding of consumer needs can lead to improved brand loyalty and advocacy.
For more than a year, DMS has been leveraging zero-party data to support partners in executing precision marketing at scale, resulting in heightened efficiency and effectiveness of each served impression; Toyota 'Al-Futtaim Automotive' and PepsiCo were among the initial adopters of zero-party data, which led to notable enhancements in their brand metrics.
As a result, zero-party data provides digital marketers with unique insights into the preferences, interests, and behaviors of their customers.
Customers are more likely to stay loyal to brands that proactively ask them about their preferences and interests.
Furthermore, zero-party data provides digital marketers with better targeting, resulting in higher engagement rates, conversion rates, and revenue. With advanced analytics techniques, it enables precision marketing at scale.
The ability to collect and analyze zero-party data gives digital marketers a significant competitive advantage. Brands that collect and analyze zero-party data will likely be more successful as customer data becomes more important in digital marketing.
