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How to build a zero- and first-party data strategy

Plot Team
October 21, 2022
Two hands holding two heart-shaped chocolate cookies

First-party data.. third-party cookies.. If you’re a marketer, advertiser, or work in data engineering, you’ve probably been hearing these terms a lot recently. But what exactly does it all mean and how does it impact your work and your business?

A few important definitions before we dive in:

  1. Cookie
    Small blocks of data created and placed on your computer or other device by your browser when you use a site or app.
  2. First-party cookie
    Cookies created and stored by the single domain you are visiting, usually to ensure optimal user experience (E.g. Cookies that enable a site to remember your sign-in details or store items in your online cart).
  3. Third-party cookie
    Cookies created and stored by a domain other than the one you’re visiting. In other words, cookies that follow you (E.g. Cookies that collect data about your web-browsing behavior for the purposes of ad targeting).
  4. Zero-party data
    Individual-level data voluntarily given to you from your audience (E.g. An online pet goods store sends you marketing content about dogs because you filled out a form indicating you own a dog when signing up).
  5. First-party data
    Individual-level data collected from your audience on your own channels (E.g. An ecommerce brand uses your past purchase behavior to customize their homepage and emails and recommend items they think you’ll like).
  6. Second-party data
    Individual-level data collected from a trusted partner; in other words, someone else’s first-party data (E.g. A software company shares its first-party data with their reseller to help that partner target more effectively).
  7. Third-party data
    Data collected, aggregated, or purchased from various indirect sources (E.g. An expanding national grocery chain is opening in a new location and purchases aggregate household data to send targeted direct mail).

Third-party cookies are going away

First, it’s important to clarify: despite sounding similar, third-party cookies are not the same thing as third-party data.

Third-party data is data that is stitched together from multiple sources other than your own (e.g. US Census data, voter registration, mortgage records), which companies may purchase to enrich their existing or target audience profiles. In addition to these traditional data vendors, there are a growing number of modern data processors that collect, organize, and sell third-party data via APIs that sync with your marketing and sales tools (e.g. Clearbit).
For example, a large furniture retailer might purchase third-party data about people who have recently moved (perhaps via aggregate data of people who recently filed an address change) to send direct mail coupons to those households.
Third-party cookies are small packets of data that are created and stored on your computer or devices by—you guessed it—third parties that follow you while you browse the web. These cookies track and collect your behavior across multiple sites to create more robust online profiles of you and other consumers, which then help advertisers (and competitors) more accurately target you.
For example, you’re looking at a kitchen appliance on Target.com. You also visit Wirecutter or other ecommerce sites to research further. Later in the day, you’re browsing the web and notice an ad from Best Buy showing the same kitchen appliance for cheaper. In this case, Best Buy used a third-party cookie to track your browsing behavior and lure you with an offer to purchase with them instead of Target.

If you were searching for new appliances, packing boxes, and moving companies, the furniture retailer from the previous example might also employ third-party cookies to identify you as a potential new mover.

Ok, makes sense, so what’s the problem? Well, driven by GDPR and increasing consumer privacy demands, third-party cookies are soon to be a relic of the past. Safari and Firefox have already blocked them for years, but recently, Google also announced plans to phase them out of Chrome by 2024.

To be clear, the end of third-party cookies does not mean the end of third-party data (as you learned above, they’re unrelated). But it does mean that marketers who currently rely heavily on cross-site tracking and robust data profiles for advertising, retargeting, and audience pinpointing should start planning alternative strategies for finding success.

It's time to lean into zero- and first-party data

So where should you focus your efforts?

Well, it’s almost universally agreed that zero- and first- party data are the most reliable and valuable—when you collect data through direct relationships and interactions with your customers, you know it’s high-quality, accurate, and relevant to your business. By leveraging first-party data, you can create personalized and targeted touchpoints across your customer lifecycle, resulting in higher engagement and loyalty and improved customer experience. Plus, it’s free.

And in a world with rising consumer expectations for privacy, a first-party data strategy ensures a mutually consensual, trustworthy, and beneficial relationship.

How to build and grow your repository of first-party data

To begin collecting first-party data, start by identifying all of your data sources and grouping them into the appropriate data types—e.g. identity data, interest data, activity data.

Once you’ve identified these categories and sources, it’s time to start filling in the gaps. Where and how can you enrich this data? Why do you need it? How will you get it? How will you use it? 

Here are some opportunities to build and grow your zero- and first-party data:

  1. Web forms hosted on your domain
    This can be an email capture, contact form, survey, comment thread, etc. If a user freely shares their information with you, it is considered zero-party data.
  2. Surveys
    Surveys are a great way to capture valuable information about your leads or customers. You can ask detailed questions about your customer’s intentions with your product, role, company, and more.
  3. Customer support interactions
    If a customer contacts you on your support channels and provides feedback, asks questions, or reports bugs, be sure to log it in your CRM.
  4. Product and website analytics
    Track and analyze on-site or in-app activities to improve your user experience and create targeted communications for your customers.
  5. Profile data when creating an account with social sign on
    Even though Google and Microsoft are third-party services, if your user gives you express permission to their profile during login, their profile data is considered first-party.
  6. Account information provided during onboarding
    Account information can be collected when a user first signs up for your product or service (e.g. name, company name, role, team size, goals).
  7. Progressive profiling
    This refers to the practice of gradually asking users for more information and incentivizing them to share (e.g. send a targeted email to remind users to fill out their profile).
  8. Email preference center
    Give subscribers the option to choose which communications they want to receive. This gives maximum flexibility to the user, tells you important information about what they’re interested in, and protects against a universal unsubscribe.
  9. Community
    Build community on Facebook, LinkedIn, Slack, etc. and track important comments and feedback that users share with you.
  10. Leverage UTM parameters
    UTM parameters help you track where traffic is coming from. They provide you with a campaign’s source, medium, name, term, and content, which helps you attribute link clicks to a specific campaign.
  11. Facebook Lead Generation
    Use Facebook's Lead Generation solution to gather valuable information about leads that click on your ads.
  12. Twitter and Facebook APIs
    Integrate with Facebook or Twitter’s Conversions API to track customer behavior without having to rely on browser pixel events.
  13. Marketing attribution tools for cross-site tracking
    Marketing attribution tells you which marketing efforts lead to conversions, engagement, and sales. Consider using a tool like Ruler Analytics or AdRoll to streamline your marketing analytics.

The main takeaway

Don’t panic! Most of your current marketing strategies and channels won’t be affected, and since Apple and Mozilla have blocked third-party cookies for years, these advertising tools have likely already weakened in effectiveness.

The best thing to do is to stay up-to-date with news related to data privacy and third-party cookies, while shifting your focus to strategies that leverage zero- and first-party data. Be sure to also vet any solutions during this time that will help you transition away from third-party cookies.

Lastly, marketers are creative by nature. This is an excellent opportunity to brainstorm new ways of connecting with existing audiences and potential customers without the use of massive amounts of data and hyper-specific targeting. Investing in these strategies will go a long way in future proofing business goals in a privacy-forward way.

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