How customer data platforms can leverage zero-party data to improve customer experience

Marketers are approaching a crossroads with their most important digital asset: data. As the flow of data grows exponentially every year, one of the most widely used tools in the digital marketing industry to analyze campaigns and build similar audience profiles – cookies – is slowly dying. As the saying goes, “When one chapter ends, another begins.”

To understand how customer data platforms can use data to improve the CX in a cookie-free future, it’s important to understand what types of audience data marketers can work with. There are three types of audience data:

Customer data platforms (CDPs) are built to unify data for both customers and prospects. In this vein, CDPs manage a variety of customer data. While the loss of third-party cookies will be a challenge for marketers and agencies, first-party cookies are also at risk in an increasingly mobile, app- and privacy-driven digital world. As a result, “cookie-free” solutions will deliver the next generation of consumer experiences. The combination of CDPs and zero-party data makes a compelling 1-2 move to improve customer experience (CX) and innovate brand engagement as the consumer-led Internet, known as Web3, takes shape.

Zero-party data: shared data is compliant data

Fortunately, the future is here, and it’s called zero-party data. If you’re confused or fed up with data taxonomies, zero-party data is very simple: It’s data that a consumer “directly and proactively shares with a brand,” according to the Forrester Research taxonomy. Intentional information sharing focuses on consumer data protection laws (e.g., GDPR, CCPA, DCA), while establishing trust between a consumer and a brand.

Why would a consumer decide to share information such as his name, email and behavioral data with a brand? The answer is simple: because the consumer sees value. Fair value exchange between consumers and brands has been around for a long time and is a core principle of Web3.

Zero party is the data hero for marketers

Marketers like first-party data because it’s “owned” by the brand. Unfortunately, first-party data is often limited in scope, while third-party data offers significant audience expansion. But for anyone who has worked with third-party audience data, it’s a mixed bag at best. Between data brokers and data privacy concerns, marketers are already navigating a complex, if not opaque, audience data ecosystem. Meanwhile, if characteristics such as age and gender are common incorrect wouldn’t marketers, on a certain third-party profile, be better served by allocating funds elsewhere?

Zero-party data is well lit, reliable and compliant – a true hero for the data-driven marketer. An important value proposition of zero-party data is that it represents people-based data, as opposed to cookies, which represent audience-based data.

Data orchestration can make or break the customer experience (CX)

If you’ve been the recipient of ill-timed or just plain misguided marketing from brands that: should know you based on past involvement – you are not alone. Global enterprises typically have a technical stack that includes sales, marketing, and customer relationship management (CRM). To complicate matters further, agency partners who manage ad campaigns may work with yet another set of tools. As a result, a consumer profile may exist on one or more platforms. Understanding the stage of a consumer journey is critical to delivering relevant information through paid or proprietary media, but data silos can create disjointed marketing messages that can damage relationships between brands and consumers. On the other hand, good data orchestration paves the way for intelligent brand messaging and a positive CX.

CDPs improve and expand marketing campaigns

In a world with only first party dates, marketers are limited to consumers who have a direct relationship with their respective brands. This relationship can be in the form of a first-party cookie, or ideally a permanent identifier such as an email address. While upselling and/or cross-selling are effective, neither is a viable long-term growth strategy.

A CDP connected to zero party data opens the door to a variety of marketing initiatives, including customer acquisition, conquest, and lookalike modeling.

How does an opt-in, shared dataset work?

In the hypothetical example below, Acme Footwear aims to expand its audience reach beyond current first-party data. By leveraging a zero-party dataset integrated with a CDP, Acme Footwear can build custom campaigns to target demographics and psychographics.

Customer profile (target group):

• Gender male
• Age: 25-30
• Children: no
• Gym membership: yes
• Favorite pastime: sports

Zero party dates available:

• Retail Brand: Multisport Athlete
• Beverage company: sports drink
• Car rental company: age 25-30
• Fitness club: member
• Shaving brand: man
• Theme park: no children

Just as Acme Footwear can use various zero-party data to inform campaigns, any participant can also use data. By sharing data points from their respective data sets, all of these brands can leverage and benefit from consent-based zero-party data to achieve their marketing objectives. Think of the CDP/zero-party data integration as a Web3 data cooperative that provides a transparent and compliant means to enable campaign targeting and personalization in the new web.

As with Web2, the cookieless era of Web3 will still be fueled by consumer data. CDPs and zero-party data ensure proper consumer consent and enable more intelligent campaign targeting for brands. Business transparency and aligned incentives are the ways to improve the CX.

Michelle Wimmer is Head of Ads Management at Permission.io