What type of data should you be collecting?
In just over a week, we’ll be attending Apex Assembly in Chicago, where we anticipate a lot of conversation about Google’s latest announcement to delay the sunsetting of third-party cookies until 2024.
The event brings together leading data executives to discuss how “in today’s digital landscape, the role of the Chief Data Officer and Chief Analytics Officer has become the most dynamic among their peers. These executives are focused on finding the most transformative technologies that enable faster innovation by implementing Data, BI, ML & AL to rapidly bring value to their enterprise and customers.”
For the 84% of marketers who are worried about the future of advertising as third-party cookies are phased out, this news will likely come as a relief. But now is not the time to rest on our laurels. Over the coming weeks, we’ll be explaining the importance of building a first-party data asset across your organization to better understand audiences, increase reader engagement, and ultimately, drive revenue.
In the meantime, let’s take a look at the different types of data and their potential use cases.
Data types and uses
The ad tech industry categorizes data into four distinct types, differentiated by how far removed they are from the source of information:
A relatively new term, coined by Forrester Research, zero-party data refers to that which “a customer intentionally and proactively shares with a brand.” It can be collected through a number of means, such as surveys, direct messages, communication preferences or customized account configurations. Zero-party data is sometimes referred to as explicit data, due to the fact that it is willingly volunteered by the customer, as opposed to first-party data, which is automatically collected by the publisher upon the customer giving permission.
Edge computing, in which the data never leaves a consumer’s device, can also be classed as zero-party data.
Zero-party data can be a highly valuable asset if utilized to its full potential, as it helps publishers significantly improve personalization.
This is data that a publisher has gathered directly from its audience, including subscribers, site visitors, and social media followers. It may include information such as a reader’s email address, purchase history, and support history, as well as their email interactions and online behaviors.
Data is collected using first-party cookies and advertising IDs, which identify individual visitors. These IDs are then used to track user behavior as they interact with a website or app, in order to serve behavioral and contextual ads.
First-party data differs from (and is arguably preferable to) second- or third-party data in that it requires a direct relationship with the customer; there is no intermediary between the publisher and the recipient of the information.
In partnership with Boston Consulting Group (BCG), Google has shown that using first-party data for key marketing functions can be a highly effective strategy, with some brands achieving a 2.9x revenue uplift. However, that’s only if they build a solid data infrastructure that enables them to to understand, analyze and intelligently use the data they have available to them.
This refers to data that has been purchased from a trusted partner who has gathered it directly from their visitors or customers; in short, it’s someone else’s first-party data.
In a second-party data transaction, two or more parties decide to share data for their mutual benefit. They agree to terms and then exchange the data in a closed environment, such as a data “clean room”, in order to safeguard their customers’ privacy.
Using second-party data is a way for companies to overcome data silos that may be restricting their growth. It enables them to build a more layered, granular view of their customer's behaviors and interests, which can help to build a more comprehensive business strategy.
Third-party data is information collected or distributed by a third party that does not have a direct relationship with the customer.
It can be obtained through third-party cookies, which track an individual across multiple sites in order to develop a profile of their interests and behaviors. This information is gathered, aggregated, and packaged to be used by multiple companies for advertising purposes.
As well as offering low accuracy and relevance, compared to first-party data, third-party data also raises concerns about customer privacy, which is why Google is preparing to sunset third-party cookies.
Next steps for the data-savvy
While the deprecation of third-party cookies may have been postponed until 2024, brands should be proactively seeking out alternatives to third-party data in order to ensure they are prepared for the shift when it finally happens.
First-party data collected directly from customers should be the primary focus, aggregated at scale, reliably and accurately, to enable executive leaders to make better business decisions. This can then be supplemented by zero-party data (through customer engagement initiatives), and second-party data (if relevant partnerships can be sought out).
If you’re looking for advice on how to make your first-party data work harder in the coming months, join us at Apex Assembly in Chicago on September 29th. To book a 1:1 with our sales team, email us directly at email@example.com. Look forward to seeing you there!