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Industry Insights

Zero Party Data: Answering 6 Common Questions on the Tech Buzzword

By Akhila Sriram on March 10, 2022

What is Zero Party Data?

We’ve previously written about the transition away from third-party cookies and what that means for technology companies and the businesses that needed that data. We also dug into the differences between first, second, and third-party cookies and how they all contribute to the larger field of customer experience management.

Now we turn to zero-party data. Zero-party data is data that is willingly given by customers to businesses. A great casual example of this is when a customer tells an employee at a store what they’re looking for, why they’re looking for it, and related information about their purchase. This is information that the customer is giving willingly to the business so that their purchasing experience can go smoothly. Zero-party data is usually received by the business directly from the customer without prompting or is given in exchange for some reward from the business. One example of such an exchange is when a customer receives a discount code or freebie for their next purchase in exchange for filling out a feedback survey.

How does First Party Data Compare to Zero Party Data?

First-party data, in contrast, takes one step away from the customer and consists of data collected about customers, which can come from social media interactions, email interactions, survey responses, and feedback sent to the business. In many ways, zero-party data is like first-party data. Both consist of consent-driven data directly provided by or gathered from customers. This lends both zero-party and first-party data to have high accuracy and reliability in relation to the customer’s relationship with the business. And this data doesn’t depend on any outside organization buying, selling, or holding onto the customer data, which was the argument for shifting away from third-party cookies. Though third-party data is less personal and specific, that data was being shared, sold, and passed around between companies, while the world enters an age of stricter data security, privacy, and rights.

Consequently, How Does Third Party Data Compare?

Third-party data has even more distance and degrees of separation between the customer and the data collection. Where zero-party data is directly given to a business by customers, third-party data is collected by other organizations and either shared or sold to businesses. This leads to customers not usually being aware of what data is being collected by these outside organizations, and no insight into how the data is being shared between companies without their consent. That’s why technology companies and businesses alike have been stopping the collection and use of third-party data, so that the data that is collected is clearly consented to and collected, following data rights legislations.

How Does Data Privacy Legislation Impact Data Collection?

With stronger data privacy laws and restrictions being written and implemented around the world, making sure that customer data is safely collected, stored, and analyzed is more important than ever. Making sure that customers know what data is being collected about their behaviors online and offline is important, so they stay informed about what data is being used by businesses. The GDPR and CCPA are two such legislations in place to protect data, and the CCPA is getting amended and expanded with the California Privacy Rights Act (CPRA) which will be going into effect in 2023. With these requirements in place, businesses are better off treating all business data as strictly as the strictest requirements demand, to make sure that any residents overseen by those requirements have their data rights protected. This will keep businesses on the right side of these and future legislations and prevent any future legal issues when it comes to data collection and analysis.

How Do Different Data Collection Types Matter to Businesses?

Different data collection styles impact how the data can be used. Zero and first-party data give the most insight into a business’s customers because that includes data collected directly from customers. Second and third-party data has more distance and less specificity to it, which makes it better for larger trends and analytics, which help provide insights into groups of customers. With the shift away from third-party data, the available data is a step closer to the customer when it’s collected, so it’s one degree more personal and specific to the customer and their needs. This mirrors the larger shift in many industries towards customer-centricity and personalization of the customer journey. By focusing on each customer’s data and then pulling out larger trends based on more specific data, businesses can deliver more impactful experiences to their customers.

How Does OSG Use Customer Data?

Our technology products largely use zero and first-party data directly from customers to fuel our data analytics. By building communities of customer respondents and directly getting their feedback and collecting consent-driven digital and in-person data about their shopping decisions and feedback, we can help our customers get better insights into how their customers make their final purchase choices. With our competitive advantage, the superior trade-off technology ASEMAP™, our products can dig deeper into customer behaviors with cognitive and behavioral analytics to reveal why customers make decisions. By combining feeds of behavioral data with first-party data about purchases, we can give our customers the technology platform for understanding not only what purchases their customers are making and when they’re making them, but also why and how they make the decisions they do when it comes to purchasing behavior. Contact our experts today to learn more about how our technology can work for your business needs.