What Is Zero-Party, First-Party, Second-Party, and Third-Party Data

There’s a healthy debate online between the needs of companies to improve their targeting with data and the rights of consumers to protect their personal data. My humble opinion is that companies have abused data for so many years that we’re seeing a justified backlash across the industry. While good brands have been highly responsible, bad brands have tainted the data marketing pool and we’re left with quite a challenge:

How do we optimize and personalize communications to current and potential customers without having rich data sources to help us? The answer is zero-party data.

What Is Zero-Party Data?

Data that a customer intentionally and proactively shares with a brand, which can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize her.

Stephanie Liu, Forrester

In other words, zero-party data (0P) isn’t data that’s collected surreptitiously (unbeknownst to the visitor or customer) nor is it interpreted. Zero-party data is explicit data that the customer willingly provides to improve your understanding of them, their needs, their wants, and where they lie in the customer journey.

What is First-Party Data?

First-party data is data collected directly by a company from interactions with its brand by visitors, leads, and customers. First-party data (1P) is owned by the brand and utilized for sales and marketing efforts to target acquisition, upsell, and retention initiatives.

A first-party cookie on a website is a small file written to the user of the browser’s computer that the brand’s web server can access for collection and reading. No other service can access that cookie or its data.

• How Does Zero-Party Data Differ From First-Party Data? First-Party Data is collected from a site without the visitor’s explicit understanding. Let’s say that you land on an e-commerce site and are looking for a specific product. You browse categories for it, you search for specific keywords, and you may even add it to the cart. The entire time, the e-commerce site is collecting that history and setting a cookie that they can later access if you return to the site… or if they can identify you through a sign-up form or subsequent conversion. First-party data is common practice, but it’s still collected unbeknownst to the visitor. Of course, you have a cookie policy and acceptance button on your site… but virtually no one reads the fine print of these nor do they dive into the cookie data that are set. So, while they gave you permission to collect data… they don’t realize what’s being collected, how it’s being stored, or when and how it will be used.
• How is Zero-Party Data Collected? Enter the DXP, or Digital eXperience Platform. Using the example above where data is collected using the visitor’s behavior, a DXP turns this around and provides a user experience (UX) with an explicit self-guided experience where they are prompted for information to better personalize their experience. The zero-party data collected is in real-time, the response is in real time, and the results are a transparent exchange of information between the visitor and the brand to help guide their purchase.

The Zero-Party data collected by the digital experience is unlike first-party data which is utilized to infer a visitor’s intent rather than explicitly enabling them to provide it. Digital Experience Platforms collect all the information in real time and ask the visitor to identify themselves in exchange for the solution they’re seeking.

The advantages to the brand are many:

1. Transparency – the brand is transparent in what data is collected, how it’s collected, and how it’s being used.
2. Real-time – the data is directly provided in real-time by the visitor, so the accuracy and age of the data are not in question.
3. Experience – personalization, and segmentation do not require anything other than the visitor’s interaction, so engagement is extremely high.
4. Cookieless – there’s no need to store and access data, which browsers and applications are reducing access to with increased privacy controls.

Examples of Zero-Party Data

A leader in the DXP industry is Jebbit and they have a ton of case studies on how their platform impacts results. Here are a few:

DXPs enable marketers, without code, to build complex digital experiences using zero-party data from questionnaires, quizzes, surveys, polls, and guided solutions.

Build Your First Jebbit Experience

What Is Second-Party Data

Second-party data (2P) is data acquired from a partner that collected that information directly. An example may be that you sponsor an industry conference and, as part of that sponsorship, you have access to attendee data that is collected by the company that distributed or sold the tickets to the event.

What Is Third-Party Data?

Third-party data (3P) is data acquired, typically via purchase, from a company that aggregates data from multiple sources and that typically merges, deduplicates, and validates the information. A great example of this is Zoominfo in the B2B space. Zoominfo is ideal for sales and marketing departments to enrich their first-party data and use to improve targeting.

A third-party cookie on a website is a small file written to the user of the browser’s computer that the third-party’s web server can access for collection and reading. The brand’s web server can not access the cookie or its data. A third-party cookie is typically placed via a third-party script that runs within the page but on the client’s browser. An example of a third-party cookie is a Google Analytics cookie… where a script that’s embedded in a hidden pixel provides access to Google Analytics to access the cookie, store data, and pass it back to the analytics platform.

Your Data Collection Strategy

As platforms respond to the demands of consumers, there’s little doubt they will continue to enhance the controls that people have over the data that’s collected, shared, and utilized for sales and marketing efforts. If your business is dependent on third-party data, you will want to incorporate other strategies to enhance your lead or customer profiles:

• Incorporate a digital experience platform for visitors to provide zero-party data.
• Incorporate trickle style questions throughout your personalized communications so you don’t overwhelm your subscribers with large forms but collect one piece of data at a time over multiple communications.
• Increase your second-party data sources, working with brands that don’t compete with yours but reach the same audiences.
• Reduce your dependency on third-party cookies as they’re likely going to be more inaccurate and less effective as platforms increase privacy controls.

Disclosure: My agency is a Jebbit partner and we help implement digital experience platforms with integrations to Salesforce’s CRM, sales, and marketing automation platforms.