Zero party data: should you believe the hype?

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I came across a new phenomenon the other day: zero party data. If this is new to you, let me explain.

First party data is well understood of course: it’s the data that organisations gather about us during our ongoing interactions with them. It covers transactions, the details they need to service or deliver goods and anything else we feel comfortable sharing.

Also well understood is third party data, which is the data gathered by a third party (and we do this at REaD Group) which is the sold on for contact, enhancement, modelling etc. The data is gathered on the basis that it could be shared with multiple organisations (known as permissioned data).

Less well known and understood is second party data. Second party data is data specifically gathered for a brand by a trusted partner. In most cases, the brand knows the partner, which means they know the data quality and accuracy. They also know the data is relevant because it comes from a partner with whom they have a mutually beneficial relationship. From a consumer point of view the relationship between us, the brand and the partner is generally very clear. For example, we enter a competition run by one brand to win a prize from another brand and it is clear that we are agreeing for our data to be used by either or both organisations.

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Since 2018 and the introduction of GDPR, the newest laws around data management and handling, any company dealing in first, second or third party data not only have to process data according to the rules, but they also have to be clear and transparent about how the data was gathered, where and when and for what purpose. That creates a lot of responsibility on the first, second or third party gathering the data. And that’s completely right too, it should be that way.

Welcome to the party

So what about zero party data? I believe that Forrester Research was the first to coin the phrase in 2018 and they define it as a subset of first party data. First party data is data that the brand gets as a result of your engagement with them, but isn’t always solicited: for example, transactional data, purchase history, spend and browsing data. This data is often modified, summarised and analysed with new variables created and inferences drawn.

Zero party data is always gathered directly from the consumer and, while factual, will generally be more about views, opinions, preferences and the like. These are also things that you may change over time and want to update or even withdraw from being used.

To be honest, this is quite confusing! It seems as though zero party data is just smarter first party data. But with the withdrawal of cookies (third party for sure, and first party as opt-in), there is a desire for brands to supplement what they get through first party data with more opinion, preference or intention-based data. And the best way to get that is to ask for it. Plus if you want to create a new industry then you need to create some buzz, and there is definitely buzz around zero party data!

The implications

What does it all mean for us as consumers and as brands? From a consumer point of view, not much, other than look out for lots more places where you are asked for your views and opinions. These might be games, competitions, snap surveys and more. As ever, be mindful about who you are sharing with, only share if you are confident you can trust the organisers to look after your data and be aware of the purpose that the data is being gathered for.

For brands, look out! You are about to be inundated with new zero party data apps and experts. Before being sucked into the hype, have a think about a few things:

• Are you making the best use of the data you already get?
Why spend time and effort on gathering new data when you have lots of power in your existing data that you are not maximising.

• Are you set up to host and manage this new data?
What system changes will you need to receive the data, hold it securely and then use it?

• Do you have the campaigns in place to get value from this data?
Zero party data works best when it is used in personalised communications and drives relevant communications. If most of your outputs are still quite generic then some changes will be needed.

I’m not dissing this idea in any way whatsoever. In fact, anything that creates new data which in turns drives more personalised communications is a good thing in my opinion. As ever, though, we need to try and see past the hype and ensure that when we are engaging with zero party data it is for the right reasons, and the data is gathered in a compliant, transparent manner.

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