How important is ‘zero-party data’ in a cookieless online advertising future?

How important is ‘zero-party data’ in a cookieless online advertising future?
Tesco: zero-party data strategy could mean acquiring rival retailers' customer data

As marketers seek to plug the hole cookie deprecation will leave, interest in zero-party data (sometimes referred to as user declared data) has steadily increased, not least among publishers.

The end of cookies spells a major transformation in digital advertising. Last year, Apple killed the IDFA — an identifier which allowed advertisers to target and track users across iOS devices — and while Google has been dragging its heels, the company has announced plans to disable third-party cookies completely by the end of 2024.

As marketers seek to plug the hole cookie deprecation will leave, interest in zero-party data (sometimes referred to as user declared data) has steadily increased, not least among publishers. The term was coined by research and advisory company Forrester who defined zero-party data as “that which a customer intentionally and proactively shares with a brand.” This is unlike third-party data which is obtained from external sites which users have visited, or first-party data which is collected by publishers themselves.

According to Forrester, zero-party data can include preference centre data, purchase intentions, personal information and information on how users want the publisher to recognise them. It can be gleaned through user-friendly and non-intrusive methods, such as surveys, polls, and interactive elements on the website.

Contextual targeting

Marketers and media owners hope that zero-party data can enable stronger contextual advertising. Evgeny Popov, executive vice-president & general manager, international at Verve Group is one voice who believes it can, saying: “Zero-party data gives publishers and media owners deeper insights into users’ stated intentions, preferences and interests. They can deliver more accurate and relevant content while enhancing contextual targeting efforts. “

One publisher who has already had some success with zero-party data is the Financial Times, which says it has been collecting user declared data since becoming a subscription website over 20 years ago and holds records for over 1.2 million readers. The publication uses declared data to power behavioural and contextual targeting, saying it can enable publishers to “build up a user profile that is comprehensive and reliable” while “allowing advertisers to be highly targeted with their placements, frequency, and messaging.”

According to the publication, targeted campaigns on FT based on context and behaviour produce an average uplift of +16% across the entire marketing funnel.

Is zero-party data accurate?

But one concern around zero-party data is whether users will actually provide accurate information about themselves, even when enticed with a better user experience. This is a point made by Hassan Khan, chief revenue officer of Viewerslogic – a company that provides advertisers with passively collected single-source data which measures consumer behaviour.

Khan said: “Not all zero-party data can be trusted. I might tell a survey that I’m vegan, spend my free time in museums, and drink decaf — when in reality I’m playing Candy Crush all day, chugging Red Bull and ordering Five Guys on Deliveroo.”

Instead he believes zero-party data should ideally be passively collected with fully informed consent, transparency, and an equitable value exchange. This is to ensure it “reflects actual human behaviour.”

He continued: “Relying on surveys and polls can result in chasing a customer that doesn’t even exist, so focus on data sources that don’t allow the customer to tamper with the truth.”

An executive at a major agency holding company made a similar point when speaking to The Media Leader, arguing that the zero-party which will be most salient in the cookie-less future will be passively collected log data such as Tesco Clubcard data. According to the source, surveys will have some use cases but are more limited in their utility.

‘What we need is a zero-party data aggregator’

The agency source said that consumers are being empowered to have more control of their data under tightening regulation policy. As legal frameworks continue to evolve in a more consumer-centric, privacy-conscious way, users can be incentivised to share their data.

“What we need is essentially a zero-party data aggregator,” the source said. “What we call zero-party data wouldn’t actually be provided by the consumer but someone the consumer has nominated to act on their behalf.”

The source envisions a future where zero-party data aggregators can facilitate consumers in making subject access requests to give companies access to their data, in exchange for some added value to their consumer experience.

Importantly this means zero-party data will enable to access competitors first party data. With the right value proposition Tesco, for example, could acquire its customers’ Sainsburys and Lidl data. This could result in “a race to utility” in which the brand that will win out is the one most useful to consumers.

While this model of declared user data sharing has always been possible, the source believes it is the deprecation of cookies and the tightening of privacy regulations which will catalyse it now. To make the model work, what is needed is “the right communication, the right level of trust, clarity of the proposition, and the value mechanisms to be well understood.”

Zero-party data shouldn’t be central to publishers’ data strategy

Speaking to The Media Leader, Richard Reeves, managing director of the Association of Publishers said that FT would not have been able to leverage zero-party data for commercial and editorial objectives without first cultivating a loyal, paying audience who are confident their data will be used responsibly.

He emphasised the importance that zero-party data has in complimenting publishers’ first-part data and enriching their understanding of audience preferences and interests, but doesn’t it should have primacy in publishers’ thinking about data, commenting: “It’s an enhancement, and as such should not be central to data strategy but rather an opportunity for growth after a robust system for collecting and activating first-party data is in place.”

Reeves advised publishers who are looking to collect zero-party data effectively “to optimise for the moments when users will be most responsive, for example, by tying in surveys or polls to related content or inserting them into the page at the point of peak engagement.”

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