Let’s Not Zero Out Our Data Parties
A new data trend has brands wondering if the digital marketing party might be over for good. Robert Rose sets the record straight on what it is, why it matters, and what it means for content marketing’s future.
By Robert Rose
Owned media (websites, e-commerce platforms, and content marketing hubs) are now core pieces of digital strategy. But confusion abounds over what audience data can be acquired through these channels, how it needs to be governed, and how it can be applied in content marketing strategies.
Marketers still haven’t figured out the best way to address the wave of regulatory acronyms – including GDPR, CCPA, and Nevada’s SB220 – that rocked the industry last year. And then Google announced third-party cookies are being phased out. Facebook issued confusing messages about CCPA-compliant advertising. And Apple’s new iOS is looking to set a new bar for data privacy.
If that wasn’t enough to contend with, now there’s another confusing new concept on the rise: zero-party data.
As you look to build 2021 plans, make sure to understand what zero-party data is, what it adds to your audience understanding, and the role it might play in the future of marketing.
The zero-party data challenge
In early 2019, Forrester analyst Fatemeh Khatibloo coined the term “zero-party data” to describe audience data intentionally and proactively disclosed to businesses, often on the expectation that it will be used to help deliver a better, more personalized, customer experience.
I’ve been talking about the power of “emotional data” – data given rather than gathered – for years. And, I’ve advocated this approach as an incredibly powerful business case for doing content marketing, building audiences, and measuring the accumulation of trust rather than transactions to gauge performance.
So, you’d think I’d be a fan of zero-party data. You would be mistaken.
Don’t get me wrong, I love the concept. Acquiring data in a way that deepens the trust between customer and brand is an incredibly important component of modern digital marketing strategy – and a core benefit of following a content marketing approach.
But calling it zero-party data needlessly complicates the data conversation. It’s a misnomer – the name suggests this data is sourced differently from other types, when it isn’t.The term zero-party data needlessly complicates marketers’ data conversation. The misnomer suggests it’s sourced differently from other kinds of data, when it isn’t, says @Robert_Rose via @CMIContent. Click To Tweet
Zero is a gate crasher at the audience-data party
Let’s count the distinctions among accepted types of data to see why adding “zero” to the equation amounts to nothing but unnecessary confusion:
- Third-party data is information marketers acquire from (as the name indicates) a third-party aggregator – most commonly a business or broker that sells the consumer data it collects and compiles from myriad sources. You might go to companies like Acxiom, OnAudience, or Oracle (which acquired data brokers like BlueKai, AddThis, Crosswise, Grapeshot, Moat, and Datalogix) to purchase email lists that target audience demographics, segments, or other qualifying characteristics to bolster your ability to reach your desired target audience.
- Second-party data is acquired from marketing partnerships and other non-competitive sources. In other words, a financial tech company might partner with a bank to compare their respective databases and find demographic overlaps. They might sell or share this data with each other to enable each to improve their digital marketing initiatives. The leads a sponsor or exhibitor gets from scanning attendee badges at a publisher’s trade show is an example of second-party data.
- First-party data is what you acquire when someone submits an online form to join your email newsletter list, subscribes to your blog, or signs up for a demo or to use one of your products or services. It’s unique to your business because it’s collected directly from the individuals who use your company’s services.
The “zero” in zero-party data suggests there is an even closer or more direct source of data than the individuals themselves. But this isn’t actually the case. The term is utilized to reference the individual’s motivation for giving the data rather than the source of that information.
Willing disclosure doesn’t change the party
Forrester has tried to characterize the distinction between first- and zero-party data thusly: “Firms collect first-party data through interactions with customers. This differs from zero-party data, which consumers give you in exchange for benefits from your firm.”
I’ve read those last two sentences multiple times, and yet I still fail to see the difference. When a consumer gives you data in exchange for benefits from your firm, is that not an interaction with a customer?
I don’t mean to pick on Forrester here. But, as you lean into the value of consumer data, you need to fully understand the nature of all the governance challenges – and create consistency around how to address them.
So, let’s be really clear: Whether you gather consumer data through an explicit poll, a survey, an interactive app, or a cleverly designed series of content consumption paths, the source of that information is one and the same: the customer.
Put in the simplest terms, zero-party data is just first-party data that’s given willingly, explicitly, and transparently rather than gathered under a veil of secrecy.
Which door will lead to the most prized data?
Customer data, and how quickly and reliably it can be acquired, has become the gold standard for many digital marketing teams looking for direction on what actions to take.
As you look at the horizon of data acquisition, you should not be confused or disheartened about where you will acquire data. Rather, you should be focused on the unique content opportunities that can help you acquire the highest-quality data. And there’s no doubt that first-party data, acquired from willing participants (your audience), will be the most valuable.
Here’s how I see the data landscape taking shape and moving marketers toward that focus:
- Third-party data will become much more complex. As third-party cookies disappear, as social media channels and ad platforms scale back their tracking of this kind of data, and as new laws build higher walls around using it, marketers will inherently depend less and less on it in their strategies.
- I believe that second-party data will also become more limited, as companies become more protective and careful with their first-party data. And those that still sell access will offer rented access rather than shared availability of the data itself. The New York Times already talked about how it will offer up its own proprietary first-party audience segments.
- This leaves first-party data as the real prize. As The New York Times’ senior vice president of ad innovation Allison Murphy said about their new first-party data approach: “This can only work because we have 6 million subscribers and millions more registered users that we can identify.”
That’s where the true mandate for some level of content marketing comes in. You will need to build evermore robust first-party data repositories. And you will need to imbue those repositories with three distinct categories of data that you learn to apply in the right combinations:
- Explicit data – data you ask for directly. Explicit data helps you develop deeper, more trusting relationships with your customers, which you can turn into more valuable conversations with them on their beliefs and preferences.
- Implicit data – the behavioral insights you observe indirectly. Implicit data helps you develop empathy for the customer and determine their intentions so you know when (or if) to start selling to them.
- Ambient data – data that gives you greater contextual and situational awareness of the customer’s needs. You can use this data to inform how you personalize and distinguish your brand’s content offerings – such as deciding to offer customers snow parkas instead of sun hats based on where they are located at the moment.
Ask not what your data can do for you, but what you can do with your data
Finding the right combination of explicit, implicit, and ambient data is critical to content marketers’ data deliberations. Don’t forget that even having zero-party data (i.e., preference data explicitly shared with you) does not always give you a complete or accurate picture of who that customer is and what content they want to receive from you.
For example, I explicitly shared with a certain publisher that I’m interested in content topics relevant to business and marketing. So, my emails from this provider dutifully deliver articles related only to those topics. However, I also like to read this publisher’s finance articles (which I find through Google searches or referrals) – and I rarely click through on the links in their emails.
If this behavioral data were to be included in the publisher’s profile of me as a customer, they might recognize the opportunity to suggest that I expand my preferences (or just update them for me).The key power of content marketing is that it provides valuable experiences that compel your audience to willingly and trustingly provide you with a clearer window into their world, says @Robert_Rose via @CMIContent Click To Tweet
But the single attribute that may be the strongest determinant of the marketing value of all the data types ultimately lies in how and why it was given to you. This is at the heart of the zero-party data ideal. It’s also what we at CMI would simply call “building a loyal audience.”
The key power of content marketing is that it provides valuable experiences that compel your audience to willingly and trustingly give you a clearer window into their world – either implicitly or explicitly. In exchange for entertainment, engagement, or utility that they perceive to be valuable, consumers will share deeper, more emotion-driven insights.
Don’t sweat the data sources, sharpen your data skills
No matter how the sources of this data evolve, it is important to be clear-eyed about the meaningful differences among them. And acquiring trusted data from audiences that willingly provide it is something that can help every part of a business’ strategy.
In the new world of customer data, if third-party data goes away, second-party data becomes scarce, and first-party data becomes your most sought-after prize, you’ll still need the right skills and know-how to use the data you’re given effectively.
You can call it zero-party if you must. But remember: You’re hosting the content party – and it’s up to you to make it one your customers will willingly show up for.
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