How a focus on zero-party data can move businesses forward

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The COVID-19 pandemic unsurprisingly led to a surge in online usage as lockdowns were imposed, workplaces were closed and people were forced to seek socialization in new ways. With the rise of online usage came growing concerns about user privacy.

As consumers flocked online, companies collected more and more data. However, it came to a head in June 2020 when Apple introduced a new privacy information section for product pages in its App Store, giving customers more transparency and understanding of what data apps collect about them. Since then, Big Tech has continued to implement privacy rules designed to protect consumer data from third-party data sharing and cookies.

States have also enacted varying degrees of consumer privacy laws, with California passing the toughest yet, the California Consumer Privacy Act. Utah was the last to pass consumer protection legislation in March, and Connecticut announced it will become the fifth state to join those ranks, alongside Virginia and Colorado.

The passage of these changes and consumer privacy laws has marketers wondering what’s next. We know that third-party data and cookies are disappearing. As a result, marketers have slowly started migrating to first- and zero-party data. How can brands leverage these untapped resources?

First-party data, or consented data, that a business collects about its existing customers comes from loyalty programs, online purchases, and more. The problem, however, is that as companies essentially operate in a vacuum, finding new customers and new data can be challenging. Since they only have data on their existing customer base, there is a gap in new customers that they cannot reach.

Zero-party data, on the other hand, offers opportunities and information that first-party data simply cannot. Coined by Forrester Research in 2018, zero-party data is defined as data that “a customer intentionally and proactively shares with a brand. It can include preference center data, purchase intentions, personal context, and how the person would like to recognize the brand [them].”

It can be a marketer’s most valuable resource as it does not become obsolete over time. Rather, it evolves. It ultimately offers real sources of truth that are deterministic and verifiable, and it offers real value in building and targeting audiences with the right offers at the right moment.

The depth and breadth of consumer information captured by zero-party data is significantly greater than that captured by first-party data. However, collecting can be a challenge. How can a company persuade consumers to willingly give out personal information when they’re starting to protect it so tightly?

Enter gamification

Gamification, an engaging technique that entices users to interact with a platform’s services, can give marketers a treasure trove of zero-party data that may not have been available before. By implementing gamification, businesses can ensure they stay ahead of the curve and stay in touch with their consumers as we move closer to a cookie-free environment.

With gamification, data can be unlocked through consumer surveys or by encouraging consumers to opt out of some sort of reward for tracking activities they do every day, like walking. Responses generated from surveys and tracking information gained through opt-in can be invaluable to marketers, especially as companies continue to move away from third-party data and cookies.

Gamification is a simple and scalable solution to address the challenges marketers face as cookies and third-party data collection are phased out. Mobile growth has made it even easier to reach consumers as well.

For companies shaping their dataset, providing consumers with a fair exchange of value will increase trust and transparency towards the company and encourage users to share more important data. This, in turn, allows companies to make better use of approved personal data in their marketing tactics and ethically further advance their business goals. Some call this a “win-win” scenario. At a time when companies have come under scrutiny for a lack of data visibility, consumers value these direct data strategies more than ever.

Deepen engagement through gamifying

Data gamification can be done in a number of ways. As mentioned above, some of the most popular methods are consumer surveys and tracking, which can help gather information such as: Health and lifestyle choices, financial well-being, sleep habits and heart rate.

Other forms of gamification are:

  • online quiz. Retail and makeup brands do this very well, bringing consumers to their websites and encouraging them to take quizzes to understand what style or makeup tone best suits their personality.
  • Share receipts for points. Consumers can unlock points and rewards simply by uploading receipts from various brick-and-mortar or e-commerce purchases.

The zero-party data collected from these methods is essential for informing customers about relevant products and services. Using gamification to understand your customers’ purchasing behavior, income, and other financial information helps better serve them both internally and through business partners. By enabling consumers to “capture” value from their data and willingly trade their data for value, brands can create a better and healthier ecosystem where they can collect more types of data in accurate ways and build more consumer trust. It also helps improve a company’s return on ad spend (ROAS), which is the true measure of success.

Whether you’re asking consumers to respond to a survey, tracking their activity, taking a quiz, or playing a game, sharing consumer value is what drives information sharing. Ultimately, companies that can build the right tools to access zero-party data will be the big winners in the new era of consumer privacy.

Brian Mandelbaum is the CEO of Klover.

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