Are you ready for zero-party data?

Cookies are dead, or nearly so, and much too soon for marketers who’ve become addicted to them.

Third-party data has been the engine of performance marketing almost since the dawn of the Web. It can be scary as a marketer to see your third-party data slipping away.

But data shared willingly by the consumer is even stronger. So how do we move beyond it for consumer insights? It’s time to look at zero-party data. It is the path to a meaningful relationship for both brands and consumers.

Zero-Party data is explicit

Zero-party data is information willingly or even proactively shared by consumers with the brand. It might be in the form of surveys, loyalty programs, and preferences. They share it because they perceive value in that sharing.

While doing away with cookies has been bad for marketers, it’s not necessarily for the benefit of consumers, either. The only ones who truly benefit from it are the big Internet platforms, like Google, Facebook, and Amazon, since they can track far more data about the consumers who visit their sites.

The implicit bargain cookies allowed marketers to make with consumers — and by implicit, I mean one that many consumers were not even aware of — was that in exchange for their data, they would receive personalized content, ads, and services.

That’s been abused and misused by big tech platforms allowing marketers to spend more advertising dollars. But there were some advantages of cookies to consumers, too. As annoying as it can be to be followed around by ads for that product you clicked on just one time, imagine if it were a product intended for someone entirely different from you.

Zero-party makes that bargain explicit, in a way that can benefit consumers and marketers alike. Since the concept is new — so new that there’s not a Wikipedia entry for it yet — here are a few questions to ask yourself.

• Do you have a privacy-first mindset?
• Is your value exchange worth it?
• Are you using emerging technology?

Do you have a privacy-first mindset?

There is a fine line between the need for a personalized experience and an experience where the consumer loses privacy and control.

Since the European Union’s General Data Protection Regulation was passed in 2018, along with similar regulation in California, major companies have been forced to become more transparent regarding their intentions with users’ cookies and provide them with the option of accepting or denying that usage. My home country of Germany goes even further. In countries such as Germany, there’s a law stating that you can’t preselect an acceptance or denial of data sharing before the checkout process.

But marketers need to go beyond the law’s requirements and change their thinking about data. The traditional mindset of a marketer goes as follows: a brand has a product, the customer wants that product, and once the customer purchases the product, they have given consent to share data.

That’s not 100% correct. The customer may have purchased from you and consented to that purchase, but they aren’t necessarily consenting to you keeping and leveraging their data for the foreseeable future.

The mindset of brands, feeling that consumers have opted into data sharing because they purchased a product, is antiquated. The secret to a solid consensual data relationship will be offering added services and benefits throughout the customer lifecycle. The best examples of this are loyalty and reward programs that keep customers engaged with the brand. Such programs offer benefits beyond the singular purchase experience. They ask for consent and can even be tied into exclusive benefits. These include individual product NFTs, experiential VIP invitations, or other forms of brand interaction that allow for consensual data collection and long-term brand love.

Is your value exchange worth it?

With zero-party data, marketers can now get consumers’ explicit consent to use their data and continue to create individualized experiences without sacrificing privacy. This will build a stronger long-term stronger relationship with consumers. But only if you give them a reason to consent.

Most Americans hold a reward card because they feel like they’ll be getting something in return from their favorite retailer. It’s just another form of pure data capturing.

The problem is that reward cards rarely give consumers meaningful rewards. Scouring a mile-long receipt for coupons at the drugstore or supermarket is not exactly valuable.

Brands must find more innovative ways to create loyalty schemes with true value. Consider:

• Elite access to experiences
• Cashback
• Partnerships and reward swaps with other brands
• NFT drops and collections that are exclusive to members
• Exchangeability into Crypto and FIAT

Once marketers can provide a solid incentive for consumers to willingly share their data, consumers will regain trust and reclaim ownership of their experiences. If you have consistent customers who enjoy your offerings, they are more likely to share their information. Moreover, they’re also more likely to be ambassadors of your brand.

Zero-party data loyalty schemes

Let’s keep in mind the reason why big tech platforms and their “data utilization practices” exist. For the longest time, brands that put products on a physical shelf had none or only very few ways of getting to know their consumers.

Thanks to the digital shelf, there are now hundreds of ways of getting to know a brand’s fans. QR codes on packaging, digital incentives like NFTs, or additional virtual experiences are just a few.

This allows consumers to not only buy a product but to also extend their experience beyond the purchase. Brand-specific loyalty and reward programs that allow consumers freedom of choice to trade, redeem, or even swap incentives are a great way for brands to claim their independence from big tech. Brands like Starbucks and GameStop have launched NFT initiatives to coincide with their pre-existing loyalty programs cultivating new experiences.

Consumers can finally choose whom they are sharing their most valuable digital assets with. They can share data and behavioral touchpoints with the brands they love and want to be loyal to. Brands harvest the benefits of building big tech-independent and exclusive data pools. These pools can be activated in any platform they like afterward and are data privacy compliant.

Are you using emerging technology?

Loyalty programs are not the only avenue marketers should explore. Emerging technology like blockchain and NFTs has changed the game for brands.

For example, the entertainment industry has leveraged NFTs to create collectible items for fans or as an alternative to physical tickets. Brands should lean into similar innovations if they want to tap into deeper consumer insight and simultaneously provide value.

Practically speaking, it’s time for brands to build real DTC relationships. They must start thinking about a plan and solutions to build their data lake, customer lifetime cycle tracking, and consumer engagement strategy post the first purchase. None of this is new.  But technologies like blockchain, NFTs, and cryptography have lowered the entry barriers dramatically. Meanwhile, a cookie-less future is triggering the need for independence from big tech. Thinking of technology and loyalty as a path to zero-party data isn’t new – but it’s finally attainable for brands due to agency partners and technology partners who can deliver integrated solutions globally.

Zero-party data is the cookieless future

As a brand, if you are true to your consumers, and somebody has brand love for you, a virtual incentive is a fantastic way to get consent to use that data. Crucially, you can then interact with them again afterward to create a lifetime’s worth of value.

As we’re in this transitional period, a cookieless future is pretty much guaranteed. But if marketers take the right steps, they can start planning and figuring out new ways to build real relationships with their most loyal customers.

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