Does the mix of first, second and third-party data need an overhaul?
First, second and third-party data are suffering from the fallout of consent collection regulations and the end of third-party cookies. Zero-party data are shaping up to be a solution.
Major changes are sweeping the digital marketing scene, especially when it comes to data. The time has come to review the classics, particularly the famous trio of first-party data, second-party data and third-party data. This trio is on the verge of welcoming another member into its ranks in the form of zero-party data.
It comes as no surprise that this development is being driven by the recent changes in technology and regulations, including the GDPR and the resulting directives issued by CNIL (France’s data protection authority) for managing consent, as well as how existing (Safari) and future mechanisms (Chrome) are eating away at third-party cookies. These changes have injected a much greater level of complexity into the processes for collecting data (the fuel for marketing strategies), which is prompting marketing professionals to take their strategies back to the drawing board.
Challenging the data mix
Marketing is all about the mix, such as the POE mix (Paid-Owned-Earned), which refers to the combination of drivers used in a marketing strategy between owned channels (a website), paid channels (media purchases) and earned channels (through media relations or influencers). Another mix that matters is the combination of first, second and third-party data. These data can also be likened to first, second and third-hand data.
First-party or first-hand data are collected from our owned channels, including the behavioural data recorded on our websites and apps, data generated by our newsletters, and data collected from our brands’ social media accounts. First-party data can be thought of as probabilistic data, because we rely on this information to deduce behavioural archetypes and steer our actions in the right direction.
However, what fate lies in store for these data with the advent of the cookieless era and consent management regulations? A lower volume of data is clearly the answer, since collection processes are now primarily subject to the user’s consent, whether on a website, an app or even in the email software.
Second-party data refer to the data that a brand purchases from a third party or accesses as part of an exchange with a trusted partner. This source can help drive back the boundaries for acquisition and also promote greater intimacy with the legacy audience, such as by discovering their centres of interest.
But can these exchanges accommodate the new rules of the game? Undoubtedly yes, provided that consent is obtained in accordance with best practices, which will inevitably scale down the number of users allowing partners to use their data.
Finally, third-party data refer to the information that has been accumulated from various sources by third parties with the ability to reconcile and subsequently market data to both you and your competitors. These data are invaluable for nurturing retargeting scenarios.
The available volume of third-party data may have exploded in recent years, but the problem is that collection processes are now governed by consent rules and hampered by the growing use of mechanisms to screen out third-party cookies.
The bottom line is that the new digital landscape is driving down the quantity and/or quality potential for all data types, whether first, second or third party. What can be done to offset the loss? This is the question that all marketers need to answer. “Zero-party data” hold part of the solution.
What exactly are “zero-party data”?
Zero-party data are the information that users willingly provide and not the information for which they give their consent by checking the right boxes in the pop-in generated by your Consent Management Platform (CMP). In this case, we are talking about the data that users take the time to send you, such as their level of satisfaction after a purchase, the product categories that are likely to catch their interest in the months ahead, and the preferred means for receiving your communications.
Are zero-party data a solution?
Zero-party data present advantages, but they do have a downside. The upsides are obvious. In other words, data are explicit rather than deduced, meaning that they offer high quality and are capable of supporting an effective strategy of personalised communications. So what is the downside? The volume of zero-party data that a brand can collect is directly related to the level of trust that it has built with its audience.
Therefore, zero-party data relate to trust-based marketing. Users only take the time to send their information to a brand because they know that the brand will use their information wisely, and because the information provided will be returned in the form of a communication that has been sufficiently adapted and personalised that it is actually akin to receiving a service.
Zero-party data imply a high level of trust, so will they manage to offset the inevitable losses with first, second and third-party data? It is hard to say until time has been allowed to build up a sufficient amount of feedback. One thing is for certain, however… a new marketing mix is gaining traction: POE is dead, long live POET (Paid, Owned, Earned, Trusted).