The Importance of First-Party (and Zero-Party) Data

Third-party data is out, but in truth, it was never a reliable source to begin with. For all its ubiquity, it was an imperfect method of establishing identity, typically cobbled together by the seller from various identifiers. The buyer of this data could never fully depend on its authenticity. First-party and zero-party data, though, are invaluable. That’s because both data types are provided directly by the user, so you know where it’s sourced, which means it also tends to be more accurate than third-party data. Read more insights from our recently released whitepaper with Ad Age on How to win the post-third-party future below

A 2020 McKinsey study found that consumers are “becoming increasingly intentional about what types of data they share—and with whom.” Unfortunately, the level of trust by sector was dismal: Healthcare and financial services were each rated as most trustworthy by 44% of those surveyed, but consumer industries like media, entertainment and packaged goods all topped out at 10%. Because of this consumer sentiment, publishers and brands need to be especially careful once they’ve gained users’ trust and data. 

McKinsey recommends using a small systems footprint for storing and sorting data, and by making sure only necessary people have future access—perhaps by not allowing any one person access to all available data. Data breaches can prove fatal to companies; not only do the staggering costs to course-correct continue for years after the fact, but once consumer trust is violated, it’s hard to win it back. (A 2019 study conducted by the Ponemon Institute and IBM Security did find out, however, that “organiza - tions that offered data breach victims identity protection in the aftermath were also more successful in reducing customer turnover.”) 

To effectively use this information, publishers should tactically compile audience insights on what matters most to their companies—for example, which verticals do audiences frequent, or what products do they add to their shopping cart—before segmenting users into cohorts based on their behaviors and needs. Whether you have an abundance of implicit first-party data or explicit zero-party data, this information will help you refine strategies for visibility, action and incentivization both internally and with outside publishing or advertising partners.

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