It all started with a LinkedIn post where I read about zero-party data. At that time, I didn't know what's that, but we often talk about first-party data or third-party data, third-party cookies as well. We're going to figure out the difference between first, third, and zero-party data and gonna figure out if zero-party data is actually worth the hype around it.

Three types of customer data​

Let's start with the definition of those three types of customer data, third-party, first-party, and zero-party data. Actually, there is also second-party data, but that's not part of the discussion today because it's not as popular as the other types.

What is third-party data?​

Third-party data is indirect customer data, which is aggregated and usually collected without the consent of the customer to share it. Usually, it's collected through website cookies or any other tracking methods like Facebook Pixel, for example, and there are two ways that you can get it. You can collect it yourself when you do Facebook advertising with Facebook Pixel or other technologies, or you have any other tracking methods installed with your advertising. Also, you can collect third-party data through special marketplaces where companies gather these data about millions and millions of users and you can buy it and you can use it for your purposes. The reliability of the third-party data is really low and all the privacy regulations are really damaging the use of third-party data and the access to it, and also the way you can implement it in your advertising or marketing strategies. So today in 2023, third-party data is not really the best choice when it comes to customer data. The biggest disadvantages of third-party data are, first, it can be inaccurate because the technologies are pretty outdated and the world is moving towards the cookie-less world. That means the world without third-party cookies and without third-party data. Second, it's getting harder and harder to use and implement third-party data in your activities because of the cookie-less updates and because of the privacy regulations. Lastly, this data is usually not individual, not raw, it's aggregated and more of a collective type of the data. So it's not really accurate and reliable to use it.

What is first-party data?​

First-party data is a direct customer data, which was shared with the customer's consent to share it. And also it's collected through your direct interaction with those users. So it can be from your website or from any other resources that you're using. You need trusted technologies, for example, like server-to-server tracking to collect this data. This data comes from customer purchases, sales calls, CRM. It's very reliable and accurate data because it's collected according to all the privacy regulations and it's appropriate for the cookie-less world. The examples of first-party data can include demographics, purchase history, website activity, mail engagement, sales interactions, click data, conversion data, conversion path data. When privacy regulations appeared in day-to-day life of every marketer, the value of first-party data skyrocketed. It happened around 2017-2018 and those marketing experts that invested in collecting first-party data back then are the ones that are succeeding right now because the access to first-party data is crucial in today's marketing world. The access to first-party data ensures that you are saved from all the troubles that are coming from cookie-less changes in the marketing world. But the biggest advantage you get from first-party data is improved advertising, improved targeting, improved optimization. First-party data can become a source that feeds the algorithm, that feeds the optimization techniques, etc. with your paid campaigns, with your paid advertising. So access to first-party data can really save your money that you spend on paid advertising channels by optimizing them for better results. For example, with the use of first-party data, you can build a conversion path of the user and you can understand all the touch points of the paid channels or non-paid channels that helped a user to make a purchase on your website. You can also choose to do re-targeting. For example, if the user abandoned the cart, you can choose to re-target to this user and show him or her similar products or the same product maybe in order to help him purchase on your website.

What is zero-party data?​

And now finally, the zero-party data. What is it? It's the type of the data that customer directly and intentionally shares with the brand. It can include like communication preferences, emails, messengers, maybe age, maybe some personal details. Any type of the data that customer basically fills in the form and clicks the button, send it to your brand. But in my opinion, zero-party data is more of the data that you can use for marketing purposes when you build your marketing persona. So when you try to understand your target audience better, when you try to handcraft your messaging better or purposes like that. But you cannot really use zero-party data for advertising purposes, for improving optimization, for improving targeting algorithms and all purposes like that. So it's not like zero-party data is not useful. Of course, it's useful because we need the data to understand our audience better and perhaps it will be super useful on sales calls or for the sales purposes because you will understand what exactly this person wants or needs. But when it comes to advertising, zero-party data cannot substitute first-party data which helps to improve targeting algorithms, which helps to improve optimization, which helps to re-market to users. So is zero-party data worth the hype around it? I would say that it's more of a marketing trend right now in sort of to create a new notion and to create solutions around this notion, to create content around this notion. And you know, a lot of LinkedIn bloggers are really having the time of their life talking about zero-party data. And no, I'm not saying it's not important. It is important as I said before for purposes like understanding your target audience better or trying to understand how to communicate with them better, which channels to use for communication. But first-party data is first-party data and we cannot live without it in today's marketing world. We need to use advertising channels because I'm pretty sure that every single company, every single brand is using PPC right now, whether it's Facebook Ads, Google Ads or any other channel. TikTok Ads, very popular right now. So first-party data can give you access to a better world of advertising and better optimization and therefore better spending of your marketing budgets or better optimization of the spending of your marketing budgets.

So do not forget about first-party data, do not forget to collect first-party data and do not forget to use first-party data. Omnitrack is an ad tracking and conversion attribution platform that only relies on first-party data to help you collect this first-party data through your marketing channels and then help you use it for optimization, targeting and all the other purposes that you can need from your marketing analytics solution.