What is Zero-Party Data?

Before we dive into the details of zero-party data, let’s take a look at the other types of consumer data marketers typically collect and use.

First-party data is information about your audience collected directly by your brand, usually in a passive way. You’re likely already gathering first-party data, such as:

• How an online visitor interacts with your site (tracked with a first-party cookie).
• A customer’s purchase history (stored in your e-commerce platform or CRM).
• When an email recipient clicks on a link (measured by your email service provider). 

This kind of data is fairly trustworthy and valuable. If you’re following best practices like cookie consent managers, the collection methods should be privacy-friendly.

Second-party data is, more or less, another company’s first-party data that you purchase or share through a partnership agreement. With second-party data, you ideally know that it was collected directly by your trusted partner, with proper consent. 

You don’t have control over second-party data like you do with zero- or first-party data, but you should have some measure of transparency and visibility.

Third-party data is the kind that’s under scrutiny right now. This kind of data is collected by an entity that doesn’t have a direct relationship with your audience, like an aggregator or ad tech provider that organizes and sells data. Third-party data is usually stitched together from different sources, including third-party web cookies that follow consumers around the Internet. It’s these cookies that browsers like Safari and Mozilla are already blocking by default, with Chrome soon to follow suit.

Third-party data relies on inferences, not clear intent, and is rife with privacy concerns because you usually have no way of knowing whether audience members agreed to have their information collected and sold.

What’s the Difference Between Zero-Party Data and First-Party Data?

Although zero- and first-party data are similar, there are important differences:

• Zero-party data is proactively given by the consumer, not passively collected.
• Zero-party data usually involves a clear value exchange. 

With zero-party data, audience members freely provide companies with information about themselves to receive a benefit or perk—like loyalty points, a special discount, or more relevant content or product recommendations. 

Zero-party data is incredibly valuable and powerful because it:

• Is self-attested and verified—no inference needed.
• Signals high consumer intent.
• Reflects an exchange of value, which builds trust and strengthens the relationship between consumer and brand. 

We’ll dive into more real-life examples in the next sections, but the key distinction to remember is that your audience willingly provides zero-party data. They want you to have this information and are fully aware they’re giving it to you.

What Are the Benefits of Zero-Party Data?

Zero-party data is more reliable, actionable, and has higher quality. It gives you what you need to build trust with your audience. Investing in zero-party data over third-party data isn’t a compromise—it’s a win.

Below are just a few examples of the benefits of zero-party data.

Deepen Your Audience Understanding

When your audience shares personal insights, you can gain a richer understanding of what motivates them, what they value, and how they want to interact with your brand. This kind of zero-party data tends to be much more impactful than demographic data like zip code or gender when it comes to building truly personalized marketing strategies.

For example, travel brand CheapCaribbean began offering exclusive discounts to nurses—a tactic known as identity marketing. To take advantage of their special pricing, nurses had to confirm their employment status through SheerID’s Identity Marketing Platform. 

Research shows that nurses identify strongly with their profession, so knowing a customer was a nurse enabled CheapCaribbean to create personalized campaigns that targeted this lucrative audience. The initiative was so successful that the company added teachers, military members, and other consumer communities to its identity marketing program.

Collect Data Securely & Build Brand Trust

Consumers are increasingly concerned about data privacy. Surveys show that misusing personal information is a leading cause of distrust in the tech industry. 

Zero-party data respects your audience’s right to privacy by putting them in control of what personal information they disclose and when. Consumers are invited to share information in exchange for something of value, and when a company delivers on that promise, it launches a brand relationship built on trust and authenticity. 

And zero-party data protects brands as well. When you collect data directly from customers, you retain full control over its security and can take steps to ensure accuracy. For example, when the meditation app Headspace began using SheerID to verify teachers for its teacher discount, instances of fraud fell by 41%.

Acquire Your Best Customers

Building richer audience profiles based on zero-party data empowers brands to attract and acquire their ideal customers. As you understand more about your existing customer base, you can begin to focus on and engage prospects that share attributes with your most loyal customers. Targeting lookalike audiences on ad platforms can help you reach prospective customers who are more likely to respond to your offers and value propositions. Casting a wider net based on less reliable third-party data simply can’t do that.

For example, direct-to-consumer mattress brand Purple knew that its made-in-the-USA ethos would resonate with the military, so it offered them an exclusive 10% discount.  By targeting relevant, military-friendly groups on social channels like Facebook and Pinterest and using imagery designed to attract this audience, Purple attracted military customers to its website. And when the brand digitally verified their military status, it collected zero-party. 

The campaign drove a 6x increase in conversions and generated an ROAS of 25:1. The results were so impressive that Purple doubled down on its strategy and launched identity-based offers for students, teachers, first responders, truckers, and healthcare workers. Together, Purple’s identity marketing programs grew to generate 10-15% of all its online revenue.

Grow Customer Loyalty with Truly Personal Campaigns

Customer loyalty requires personalization, but consumers are increasingly concerned about privacy, which makes creating personalized campaigns a challenge. It’s a catch-22 that’s leaving marketers feeling trapped. 

Zero-party data can help resolve this tension. Customers willingly provide it, and it gives you insight you can use to create advanced personalization.

When you know your audience’s life stage or profession, for example, you can design campaigns to reach them on holidays or occasions that carry special significance. Retail giant Target offers a 15% discount for teachers during back-to-school season, and brands like Nike, Vineyard Vines, and Bed, Bath & Beyond create meaningful interactions with the military community with Veterans Day campaigns. These kinds of personalized experiences help build goodwill and brand loyalty among consumer communities—and those who support them.

Additionally, you can integrate zero-party data into your customer loyalty program to add more personalized messaging and visuals at every touchpoint. Craft retailer Michaels integrates exclusive offers to seniors, teachers, and military members into its Michaels Rewards program and engages these valuable customers throughout the year with targeted emails, social media posts, and web banners.