What You Need to Know About the Data Party Game

Owned media (your websites, content marketing hubs, commerce platforms) are core pieces of digital strategy. But confusion abounds over their ability to collect audience data – what can be acquired, how it is governed, and how it can be used in content marketing strategies.

You likely are still navigating the wave of regulatory acronyms – including GDPR and CCPA – that rocked the industry in the last couple of years. Then, you have to ponder Google’s plan to phase out third-party cookies, Apple’s new bar for data privacy, and other data-related changes.

And if that wasn’t enough, another confusing concept has popped up – zero-party data.

Let me help you learn what zero-party data is, what it adds to your audience understanding, and the role it might play in the future of marketing.

What is zero-party data?

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 it will be used to help deliver a better, more personalized customer experience.

For years, I’ve talked about the power of “emotional data” – data given rather than gathered. 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.

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. But calling it zero-party data needlessly complicates the data conversation. And it’s a misnomer – suggesting the data is sourced differently from other types, when it isn’t.

Intent shouldn’t be in 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 acquired from a third-party aggregator, most commonly a business or broker that sells the consumer data it collects and compiles from myriad sources such as email lists that target audience demographics, segments, or other qualifying characteristics that bolster your ability to reach your desired target audience.
• Second-party data is acquired from marketing partnerships and other non-competitive sources. For example, a financial tech company partners with a bank to find demographic overlaps in their databases. They might sell or share this data with each other to enable each to improve their digital marketing. Or it could be the leads exhibitors acquire by scanning attendee badges.
• First-party data is acquired directly from individuals who provide their information to your company when they join your e-newsletter list, subscribe to your blog, sign up for a demo.

The “zero” in zero-party data suggests an even closer or more direct source of data than the individuals themselves (i.e., first-party data). But that isn’t the case. The attempt of using the zero-party term is to reference the individual’s motivation for giving the data.

Willing disclosure doesn’t change the party

Forrester tries 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 read those sentences multiple times and 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. But, as you lean into the value of consumer data, you must understand the nature of all the governance challenges – and create consistency around how to address them.

Let’s be clear: Whether you gather consumer data through an explicit poll, 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 simply, zero-party data is just first-party data given willingly, explicitly, and transparently rather than gathered under a veil of secrecy.

Know the door to the most prized data

You should not be confused or disheartened about where you will acquire data. You should focus on the unique content opportunities that can help you acquire the highest-quality data – that first-party data acquired from willing participants (your audience).

Here’s why you must move to that focus:

• Acquiring and using third-party data is becoming 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 third-party data strategies.
• Second-party data will become more limited as companies protect their first-party data more. Those that still sell access will offer rented access rather than shared availability of the data. The New York Times already talked about how it will offer up its proprietary first-party audience segments.

This leaves first-party data as the real prize. That’s where the true mandate for some level of content marketing comes in.

You need to build evermore robust first-party data repositories. And you need to imbue them with three distinct categories:

• 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 customers 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. This data can 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 what you can do with your data

Finding the right combination of explicit, implicit, and ambient data is critical to content marketers’ data deliberations. Zero-party data (i.e., preference data explicitly shared) does not always give 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 publisher that I’m interested in content topics relevant to business and marketing. This provider dutifully emails me articles related to those topics. However, I rarely click through the links in their emails. I also read this publisher’s finance articles, which I find through Google searches or referrals.

If my 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 strongest determinant of the marketing value of all the data types 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 comes from experiences that compel your audience to willingly and trustingly give you a clearer window into their world – 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 source

No matter how the sources of data evolve, it is important to be clear-eyed about the meaningful differences among them. Acquiring trusted data from audiences that willingly provide it is something that can help every part of a business’s 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.

Cover image by Joseph Kalinowski/Content Marketing Institute