Zero-party data vs. first-party data: What's the difference?

What is zero-party data?

Zero-party data is information that customers voluntarily share with organizations. Some experts consider this term an evolution of explicit data because customers explicitly share it with organizations. Since Forrester coined the term, experts have identified zero-party data as a way to drive personalized marketing campaigns.

Organizations can collect this data from various sources, such as website forms, polls, membership applications and surveys. Although some customers may proactively offer zero-party data for nothing in return, organizations commonly treat it as currency and offer a reward -- such as an e-book, webinar or discount code -- in return.

This data can give marketers accurate audience insights because it comes directly from customers. As organizations collect data through polls, surveys and form submissions, marketers can use it to tailor product recommendations, messages and offers to each customer. In this sense, the way marketers use zero-party data takes on a conversational nature that fosters strong relationships between organizations and their customers.

What is first-party data?

First-party data is behavioral information that organizations collect to improve CX as customers interact with their websites, apps, products and social media channels. To collect this data, web developers place a code on the organization's media assets so that CX teams can track users' IP addresses, login credentials, browser language, timestamps, demographics, which sites they visited and items they left in their shopping cart. Organizations then store this information in their CRM platforms.

This data enables marketers to re-target customers with relevant product ads after they leave the site. Additionally, it can help marketing teams create customer segments based on interests, topics, products and demographics. To enhance personalization and segmentation further, marketers can use both first-party and zero-party data to target users with the right messages.

Differences between zero-party data and first-party data

Although zero- and first-party data both help marketers personalize their campaigns, they differ in data analysis, accuracy of insights and customer awareness.

Data analysis. Zero-party data offers explicit insights directly from customers, so organizations don't need to analyze this information to derive useful business insights from it. First-party data, on the other hand, requires organizations to analyze it before they gain insights.

Insight accuracy. Typically, zero-party data offers more accurate information than first-party data because the data comes directly from the customer.

With first-party data, organizations rely on an intermediary -- the tracking pixel -- to collect behavioral information, which can sometimes produce inaccurate insights. For instance, first-party data lets organizations track which webpages users visit on their sites. However, a customer may visit a webpage and not have a strong interest in the site topic or products.

Customer awareness. Customers voluntarily share zero-party data with complete awareness. However, they may not know when organizations collect first-party data. Various privacy laws around the world, such as the European Union's GDPR, require organizations to gain customer consent before they track first-party cookies. Yet many users consent without fully understanding what they agreed to. Therefore, first-party data can spark conversations about data privacy.

Privacy laws also require organizations to offer transparency into how they collect and use first-party data. To ensure transparency, organizations can craft privacy policies and build cookie notifications into their websites and other digital media assets.