At Digioh, we talk a lot about zero-party data (we can’t help it – it’s our specialty!). But it’s not the only type of data that brands use to personalize marketing messages and customer experiences.
First-party data may also used to better understand customer behavior and preferences.
So, what exactly is the difference between zero-party and first-party data? Why is zero-party so important, and how can you unlock it?
Hint: Zero-party data is the key to hyper-personalization. It’s helped Digioh customers like Andie boost conversions by 343%.
What is Zero-Party Data?
To understand the difference between these two types of data, you need to know what zero-party data is.
Zero-party data is information that customers provide voluntarily and deliberately. It includes:
- Answers to your quiz questions
- Responses to your polls or surveys
- Preference center data
- Purchase intentions
It’s the explicit information that shoppers share with your brand.
For more details on how to collect zero-party data and how it works, check out our guide: What is Zero-Party Data?
Zero-Party Data vs First-Party Data
If zero-party data is the information that shoppers share voluntarily, what is first-party data?
First-party data focuses on user behavior and their interactions with your brand. It includes a user’s app, site, and on-page behaviors, like their:
- Clicks
- Active time on a page
- Engagement with your site’s content
- Purchase history
- Support history
- Loyalty program data
First-party and zero-party data are both used to personalize the shopper’s experience.
But here’s where these two types differ (and why zero-party has an advantage):
- First-party data needs more in-depth analysis. Page engagement and click data don’t say much on their own. You must take a closer look to understand how this information relates to conversions and revenue. Meanwhile, zero-party data is information shared explicitly by customers, so there’s no need for in-depth analysis. The customer is telling you they like XYZ and how they want you to interact with them.
- Zero-party data is more reliable because it comes directly from the customer. First-party data may not give you the full picture. A customer may visit a page on your site, but that doesn’t mean they have a strong interest in that product or topic.
- First-party data can raise questions or concerns about data privacy. Visitors may not know that brands are collecting first-party data (although privacy laws around the world are changing this). But with zero-party data, customers share their information deliberately and with full awareness.
Because zero-party data is collected with complete transparency, you can personalize the customer experience without losing their trust. In fact, things like quizzes and surveys are great ways to build trust and deeper relationships with your customers.
Why Zero-Party Data is Crucial in Advertising in 2024
Zero-party data allows you to give shoppers a more personalized experience when interacting with your brand. E-commerce brands that offer a personalized shopping experience see a 20% increase in sales.
But zero-party data should also play a fundamental role in your advertising campaigns. Here's why:
Zero-Party Data Can Boost Your ROI
Globally, digital ad spend is expected to hit $601.84 billion this year, up 9.5% from the $549.51 billion spent in 2022. Digital ad prices have also increased 20% to 50% since 2020.
Brands are spending more money on digital advertising, and that can eat into their bottom lines.
Zero-party data can make your marketing dollars go further.
Here’s how:
- Precision targeting. You know exactly who your customers are and where they are, allowing you to show your ads to the right people.
- More effective creative. Customers are telling you their preferences. Use that data to create ads or personalized offers that resonate with their needs.
Showing the right ads to the right people can boost conversions and revenue.
Data Collection and Sharing Has Changed
Once, brands could choose audiences and advertise to them with ease, but the way data is collected and shared has changed, making it harder to reach the right audience.
Data privacy laws have evolved across the world, and to comply with these laws, sites need to ask for cookie consent.
The era of third-party cookies is coming to a close. But personalization is still more important than ever, so brands must take a different approach.
Zero-party data allows you to provide that personalized experience – without the need for cookies.
Customers share their information willingly and in a transparent environment.
Real-World Zero-Party Data Examples
Zero-party data drives higher sales, advertising ROI and happier customers. Just look at these real-world examples:
- Andie’s Fit Quiz asks key questions to find the shopper’s perfect fit, but they also connect with Klaviyo to send automated email flows using zero-party data. The results? A 343% conversion rate boost.
- Jaxxon’s Chain Style Quiz helps visitors find the perfect necklace for themselves. Before Digioh’s quiz breakdown, they didn’t realize that 80% of visitors were buying items themselves. Strategic adjustments to messaging and targeting led to a 197% CVR lift and a 5% increase in conversions from quiz takers.
You can see numerous examples of using zero-party data on our customer stories page.
Do you want to write your brand’s own story of transforming the customer experience and leveraging zero-party data? You need to learn how to make the data work for you first.
How to Make Zero-Party Data Add $$$ to Your Bottom Line
Zero-party data is extremely valuable, but you need to leverage it properly if you want it to increase your bottom line. Activating the data you collect can lead to targeted, relevant messaging that is only possible after asking your customers strategic questions.
BedGear describes this perfectly with their Digioh + Klaviyo account integration. “For example, let's say they answer that they're a hot sleeper," the brand explains. "We can send a campaign for the products that help hot sleepers directly to those consumers.”
You can activate your zero-party data in many ways.
Email Segmentation Instead of List Blasts
If you’ve ever subscribed to an email list for a retail store, you’ve likely received tons of emails that aren’t relevant to you.
And you probably unsubscribed after you made your purchase or received the free perk for subscribing.
Why?
Email blasts without segmentation cause your subscribers to receive offers or information that isn’t relevant to them. Zero-party data helps you stay within an unsubscribe rate of less than the norm of 0.2% or less. How? Let’s look at a hypothetical example:
- Your ideal customer has trouble with product sizing or knowing which products to buy
- You create a quiz to understand the person’s need for dress clothes (perhaps they need dress clothes for work, conferences, going out with friends, etc.
Using this example, you can collect information about the person’s sizing and purpose for dress clothes. Then, you can send segmented emails and product recommendations for customers needing attire for:
- Professional reasons
- Social outings
- Special events
With email segmentation, you can achieve:
- 30% higher open rates
- 50% more click-throughs compared to untargeted emails
- 4.65% lower bounce rates
- 9.37% lower unsubscribe rates compared to non-segmented campaigns
An estimated 64% of brands use segmentation to send more relevant email.
Activating zero-party data for email segmentation allows you to keep more subscribers on your list, improve open and click-through rates, and boost revenue by sending your list emails that are hyper-relevant to them.
Targeted Advertising
Google Ads, Meta, and other ad platforms allow you to target your audience by keyword, interests, and more. We’ll use Google Search Ads as an example.
Google handles 3.5 billion searches per year, collecting a treasure trove of user data at the same time. However, Google collects data from Gmail, YouTube, and other services; however, it’s still not as accurate as the zero-party data you collect.
If a potential customer lands on your site and takes a quiz, you can retarget them across the web on YouTube or their favorite social platforms.
If you use audience segmentation when buying ads, you can show these shoppers products that solve their problems.
74% of brands state that PPC is a huge driver of business for them. Zero-party data can help your brand maximize returns from online advertising.
Build Audience Groups
What are your customers buying? You can export the data to create groups based on:
- Purchases
- Preference data
- Quiz data
- Survey data
- Form data
Internally, marketing teams can then dissect the data and create audience groups based on it. Let’s say that you sold 1,000 customers a dog bed. You can create an audience based on this purchase to recommend:
- Dog food
- Collars
- Leashes
- Toys
You won’t send these customers more offers for dog beds - not for a while - but you can promote other products they’ll need for their new furry friend.
Audience groups can be created to offer hyper-personalized marketing campaigns with a greater chance of conversions.
Examples of Targeting Based on Your Zero-Party Data
Combining Digioh with your email service provider or marketing automation platform is a powerful way to activate zero-party data to detect customers, capture sales from cart abandonment, and enhance the customer experience. For example, you can:
- Detect customers and what they’ve purchased in the past
- Create dynamic pop-ups that are based on Iterable data
- Increase revenue per visitor with target pop-ups, landing pages, SMS, and more
Platforms like Iterable and Klaviyo work seamlessly with Digioh to offer:
- Personalized sign-up forms
- Custom email preference centers
- Product recommendation quizzes
- Behavioral targeting
Collecting zero-party data is only part of the equation when trying to boost sales, conversions and brand loyalty. When you leverage the data properly, you can convert more customers, but more importantly, you can cater to your target audience’s needs better.
90% of businesses - across all verticals - are focusing on customer experience. Zero-party data activation allows you to build a customer-centric brand that solves pain points audiences may not even realize that they have until you collect data and find new, exciting ways to serve your customers.
Customer-centric companies enjoy loyal customers who are 2.4 times more likely to stick around because you solve their problems faster. That’s the power of zero-party data.
