- Zero-party importance. Zero-party data builds trust and improves personalization, strengthening customer relationships.
- First-party advantages. First-party data enables more effective marketing strategies, increasing customer loyalty and engagement.
- Contextual advertising. Contextual advertising offers privacy-conscious targeting, promoting ad relevance without extensive user data collection.
As we move toward a cookieless future, brands that generate value from personal data will need to change the way it is acquired. The tension between personalized experiences and privacy is increasing, and we need to be mindful of the risks that come with a data-driven approach to designing personalized experiences.
This article will look at the ways that brands are approaching the concept of a cookieless future while ensuring that customers continue to receive an exceptional, personalized experience while respecting their privacy and staying within data compliance.
We Begin With Zero … Party Data
Because of the growing awareness and concerns about data privacy and regulatory compliance, zero-party data is becoming a valuable resource for brands that wish to maintain customer trust while providing relevant, personalized content and services.
Unlike first-, second- and third-party data, zero-party data is information that is willingly and proactively shared by a brand’s customers. This can include anything from stated preferences and personal interests to survey responses and feedback. By collecting zero-party data, businesses can better understand their customer’s desires and expectations, enabling them to create more meaningful and customized experiences.
The most advantageous aspect of zero-party data is that it is transparent by its nature. Because customers are voluntarily providing their information, they are more likely to trust a brand's use of their data. Today, we all live in the era of increased data privacy regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), so gaining and maintaining customer trust is crucial. Through the use of zero-party data, brands are able to demonstrate their commitment to responsible data practices and regulatory compliance.
Additionally, zero-party data enhances and improves a brand’s personalization efforts. Customers are more likely to engage with content that resonates with their specific preferences and interests. By using zero-party data, businesses can create hyper-targeted marketing campaigns and personalized product recommendations to customers, driving increased sales and building deeper connections.
Ana Mourao, global customer journey and CRM senior manager at the well-known power tool company Stanley Black & Decker, told CMSWire that because the company was going through a long-term process of digital transformation, they were late to the party when it came to using third-party data. Since they don't sell directly, they were able to heavily invest in zero- and first-party data collection only.
“Brands should have a robust place to store all the zero and first-party data collected so you can view over time, segment it, trigger automated customized journeys, etc.,” explained Mourao. “It can be a data warehouse, data lake, or CDP, but the most important part is to be flexible and easily scalable when it comes to connecting sources of data into it."
Related Article: What Is Zero-Party Data?
In the First Place: First Party Data
First-party data refers to data that is automatically collected from customers through the interactions they have with businesses and typically includes customer preferences, purchase history and website browsing behaviors. This type of data enables companies to provide customers with personalized marketing content, improve customer loyalty and engagement, and enhance data privacy and compliance. A 2022 Statista survey revealed that 37% of those polled indicated that their brands exclusively used first-party data to personalize customer experiences, an increase of 6% over the last year.
Jonathan Moran, head of martech solutions marketing at SAS, an analytics, AI and data management solutions provider, told CMSWire that brands need to be working on strategies for creating a trusted “value exchange” with their customers.
“As the third-party cookie goes away and consumers become more aware of data privacy the collection of first-party data is at a premium,” said Moran, a CMSWire Contributor. “Brands have to provide compelling incentives to consumers to relinquish valuable personal data. This is a ‘value exchange’ whereby the consumer feels they are receiving significant benefits in return for sharing information about themselves.”
First-party data provides significant advantages to brands that wish to understand and engage with their customers more effectively. By relying on information that is directly collected from customers, brands can tailor their marketing strategies so that they more effectively resonate with their audience. This type of personalization often enables businesses to have a more complete understanding of their customer’s needs and desires.
Vikas Kaushik, CEO at TechAhead, an India-based mobile app development and IT transformation company, told CMSWire that as a CEO in the IT industry, he understands how crucial it will be in the cookieless future to strike a balance between consumer experience and data privacy. Kaushik advocates the use of first-party data — details that clients directly provide a company. "This can involve participation in surveys, opt-in email lists and social media,” said Kaushik. “Without relying on third-party cookies, marketers may use this data to obtain insights into consumer behavior and preferences."
First-party customer data is collected directly from a brand’s audience, which can include current and past customers, website visitors and social media followers. There are multiple sources where additional first-party data can be gathered, such as loyalty programs and web interactions. This data typically includes information such as demographics, customer purchase history and user behavior across different touchpoints with a brand (email, chat, mobile apps, website visits, phone calls, etc.).
One of the biggest advantages of using zero- and first-party data is it is based on the trust a customer has with a brand, and trust is something that is otherwise challenging to build. As Moran put it, “If you don’t have trust, you have nothing."
As an aside, although we are not discussing it here, second-party data is actually one company’s first-party data that has been provided to another company. For instance, if a brand’s business partner aggregates first-party data and shares it with the brand, it is then considered second-party data by the brand it has been shared with.
Related Article: From First-Party to Zero-Party Data
Contextual Advertising: Advertisements That Matter
Contextual advertising is a strategy in which the content of a webpage is matched with the content of an ad, which is then presented to the user. Contextual advertising analyzes various content types in real-time, including text, speech, images and geolocation. Some advertising tools, such as IBM's Watson Advertising Accelerator, use the website data along with the user's browsing activity to make predictions about whether they'll take specific actions, such as clicking on an ad.
“Utilizing contextual advertising is an alternative strategy that bases targeting of adverts on webpage content rather than user behavior,” said Kaushik. “This promotes privacy protection while ensuring that advertisements are pertinent to the customer's current interests.”
Unlike behavioral advertising, which relies on collecting and analyzing user data to display targeted ads, contextual advertising is based on the content of a webpage. This means that it doesn't require extensive user data collection, making it a more privacy-conscious option for both users and advertisers.
By employing targeted keywords and phrases, brands can display more relevant ads to users who are more likely to have a probable interest in their products or services. This improves the chances of users following through by making purchases or subscribing to newsletters.
Protect Oneself: Consent Management Platforms (CMPs)
Consent management platforms (CMPs) can fill a vital role in ensuring user privacy and brand compliance. By obtaining explicit consent from users to collect and process their data, brands can build trust while ensuring that they are in compliance with privacy regulations. Some of the most popular CMPs are:
- OneTrust: OneTrust provides comprehensive privacy management solutions and includes cookie consent management, website scanning for trackers and data subject request handling.
- TrustArc: TrustArc is comprised of a suite of privacy management solutions, including a CMP that enables brands to comply with global data privacy laws and regulations.
- Quantcast Choice: Using Quantcast Choice, brands can design personalized consent banners and manage user preferences for tracking technologies.
- Usercentrics: Usercentrics facilitates a website’s data privacy regulation compliance through the creation of customized consent banners and user tracking technology preference management.
- CookieYes: CookieYes is a GDPR-compliant consent management platform that enables brands to customize their cookie consent banners and preference centers.
- Cookie Information: Providing GDPR and eprivacy compliance, Cookie Information provides website cookie scanning and consent management solutions.
Data Governance and Security Build Consumer Trust
Data governance is essential for building consumer trust in today's data-driven world, where privacy concerns and breaches are a constant reminder of its importance. Effective data governance involves establishing organizational rules for data use, minimizing risks and meeting regulatory requirements, all of which help a brand to promote transparency and accountability in data management. According to a 2020 McKinsey report, once leaders understand the value of data governance, they champion it.
Mourao suggested that brands should make this data readily available to enhance end-user engagement and experience. "Having governance over how the data is collected pays off! Fewer data ingestion processes are needed when the data comes clean and properly formatted, and it can be quickly used where it matters the most.” Mourao reiterated that many teams should be stewards of good data collection practices. “This is not an IT-only thing!"
Data governance that is effectively implemented enhances a brand's security and protects sensitive consumer data. As a result, consumers tend to trust companies that maintain transparency in their data governance and security measures, as they can be confident their information is managed responsibly and securely.
“One way to build trust is for brands to take a renewed look at their data governance and security processes,” suggested Moran. “Consumers need to trust that brands will be good stewards of their data. Data governance is the collection of processes, roles, policies, standards, and metrics that ensure the effective and efficient use of information. New value exchanges are being put in place for zero and first-party data, but brands must ensure they collect this data properly.”
Final Thoughts on Personalization and Privacy
As a cookieless future becomes our reality, it is vital that brands focus on building trust with their customers while prioritizing personalization, privacy and compliance. Using zero- and first-party data, leveraging contextual advertising and implementing consent management platforms are all effective strategies to achieve such a balance.
Additionally, a strong focus on data governance and security will enhance consumer trust and ensure regulatory compliance.