How Customer Data Platforms Can Leverage Zero-Party Data to Improve Customer Experience

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Marketers are approaching a crossroads with their most important digital asset: data. As the flow of data grows exponentially every year, one of the digital marketing industry’s most widely used tools for analyzing campaigns and building lookalike audience profiles – cookies – is slowly dying. As the saying goes, “when one chapter ends, another begins”.

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

First party Third party Gone Zero
Data collected through direct consumer engagement with a brand.

For instance, a consumer goes to a merchant site to look at shoes; the retailer collects the data.

Data collected by an entity that has no direct relationship with the consumer.

For instance, a consumer goes to a merchant site to look at shoes; analytics company collects the data.

Data knowingly shared by a consumer with a brand as part of an exchange of value.

For instancea consumer visits a rewards program site and shares information to earn rewards.

Audience data definitions

Customer Data Platforms (CDPs) are designed to unify customer and potential customer data. Along these lines, CDPs manage a variety of consumer The data. While the loss of third-party cookies will challenge marketers and agencies, first-party cookies are also at risk in an increasingly mobile, app-driven 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 provides a compelling push to improve customer experience (CX) and innovate brand engagement as the consumer-led Internet takes shape, aka Web3.

Zero-part data First party data
E-mail, interests, profession and other registration information Behavior that enriches existing profiles and enables similar modeling; conquer
CDP Data Unification Opportunities

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 tired of data taxonomies, zero-party data is very simple: it’s data that a consumer shares “directly and proactively with a brand,” according to Forrester Research’s taxonomy. The intentional sharing of information meets consumer data protection legislation (e.g. GDPR, CCPA, DCA) while building trust between a consumer and a brand.

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Why would a consumer decide to share information such as their name, email address and behavioral data with a brand? The answer is simple: because the consumer sees value in it. A fair exchange of value between consumers and brands is long overdue and a fundamental principle of Web3.

Zero-party is the data hero for marketers

Marketers love first-party data because it’s “owned” by the brand. Unfortunately, first-party data tends to be limited, while third-party data offers significant audience expansion. Still, for anyone who’s 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. In the meantime, if attributes such as age and gender are frequently incorrect on a given third-party profile, wouldn’t marketers be better served allocating funds elsewhere?

Zero-party data is well-informed, trusted, and compliant — a true hero for the data-driven marketer. A key 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 Customer Experience (CX)

If you’ve been the victim of inappropriate or simply misplaced marketing from brands that should know you based on a prior engagement – you are not alone. Global companies typically maintain a technology stack spanning sales, marketing, and customer relationship management (CRM). To further complicate matters, partner agencies that manage advertising campaigns can work with another set of tools. Therefore, a consumer profile may exist on one or more platforms. Understanding the stage of a consumer’s journey is key to delivering relevant information through paid or owned media, but data silos can create disjointed marketing messages that can harm brand-consumer relationships. On the other hand, good data orchestration paves the way for smart brand messaging and positive CX.

CDPs improve and extend marketing campaigns

In a world with only first party data, marketers are limited to consumers who have a direct relationship with their respective brands. This relationship can take the form of a first-party cookie or, ideally, a persistent identifier such as an email address. While upselling and/or cross-selling are effective, they are also not a viable long-term growth strategy.

A CDP connected to part zero data opens the door to a variety of marketing initiatives, including customer acquisition, conquest and look-alike modeling.

How does an opt-in shared dataset work?

In the hypothetical example below, Acme Footwear is looking to expand its audience beyond its current proprietary data. By leveraging a zero-party data set integrated with a CDP, Acme Footwear can create personalized campaigns to engage with its target demographic and psychographic.

Customer profile (target audience):

  • Male gender
  • Age: 25-30
  • Children: no
  • Gym Membership: Yes
  • Favorite pastime: sports

Zero-part data available:

  • Sign: multi-sport athlete
  • Beverage company: sports drink
  • Car rental company: 25-30 years
  • Fitness club: member
  • Shaving brand: man
  • Theme park: no children

Just as Acme Footwear can use various zero-party data to inform campaigns, each participant is also able to cross-mine the data. By sharing data points from their respective datasets, all of these brands can use and benefit from permission-based zero-party data to achieve their marketing goals. Think of CDP/zero-party data integration as a Web3 data cooperative providing a transparent and compliant way to enable campaign targeting and personalization in the new Internet.

Similar to Web2, the cookieless era of Web3 will still be powered by consumer data. CDPs and zero-party data will ensure appropriate consumer consent while enabling smarter campaign targeting for brands. Corporate transparency and aligned incentives are the pathways to improving CX.

Michelle Wimmer is the Ad Operations Manager at Permission.io

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