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The Future Of Personalization Is "Privacy-First”

The Privacy Revolution Gives Rise to Zero-Party Data and Privacy-First Personalization

This is the first in a series of posts about zero-party data and Privacy-First Personalization. Read the second post here: How To Source Zero-Party Data.

The privacy revolution has arrived. Changing attitudes, new regulations, and the demise of third-party cookies and Apple’s IDFA have disrupted traditional marketing practices built on first-party and third-party data, creating a pressing need for brands to invest in ethical and compliant alternatives. What's more, when COVID hit, brands shifted their focus to e-commerce — a trend that continues to accelerate, making the need for better data about digital audiences even more urgent. 

Add it all up, and marketers have a real challenge on their hands — and for many, zero party data (“ZPD”) is the favored solution.

Forrester Research defines zero-party data as, "data that a customer intentionally and proactively shares with a brand. It can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize her." In aggregate, ZPD encompasses all of the consent-based, personal context data that customers share with a brand (and keep up-to-date) in order to improve their experience with the brand — personal needs, preferences, interests, goals, favorites, etc.

 

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Customers share ZPD with the expectation that it will be used for their benefit. And because ZPD is explicit, marketers don’t have to guess the meaning of the data to put it to good use. In the words of Forrester, “zero-party data provides explicit interest and preferences — and you must use it to improve the value you provide to consumers.”

Just a single data point goes a long way by revealing a key facet in how customers want to relate to a brand, and why. When a user tells Yelp that they’re a vegetarian, for example, Yelp can provide them with vegetarian-friendly recommendations rather than steakhouses.

For these reasons, ZPD is at the heart of “Privacy-First Personalization” — the set of principles, practices, and emerging technologies built from the ground up to deliver experiences that’s always welcome, always relevant, and always compliant.

Consider how a skincare brand might bring Privacy-First Personalization to life. The brand can use a product finder quiz (or a survey, or digital campaign) to ask customers for their skincare goals, skin type, and skin sensitivity, along with permission to use the data to personalize future interactions. From that point on, the brand can speak directly to each customer’s individual needs. Moreover, the brand can provide a secure “portal” on its website where customers can update or add data in order to fine-tune their relationship with the brand. This gives customers transparency, choice, and control — and builds trust.

 

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Today’s consumers have heightened concerns about their personal data, and brands are navigating a dynamic and uncertain regulatory landscape — with GDPR in 2018, CCPA in 2020, CPRA in 2023, and whatever comes next.

Unlike first-party and third-party data, ZPD gives brands a future-proof foundation for personalization. It should come as no surprise that 49% of marketers say ZPD is their most favored solution, and Forrester considers ZPD to be “the most valuable data opportunity of all.”

By its nature, ZPD stands in stark contrast not only to third-party, but first-party data too. A side-by-side comparison makes it clear:

 

Zero-Party Data

First Party Data

Personal context data (e.g. preferences)

Behavioral (e.g. clickstream) & transactional data

Knowingly & intentionally self-reported by customers

Quietly observed & accumulated by brand

Forward-looking, predictive

Historical record of events, like breadcrumbs

Meaning is explicit, no guesswork

Meaning is inferred, requires guesswork

Customers expect it to be used for their benefit

Usage is unexpected, and sometimes creepy

Customers update it to fine-tune their experience

Customers have little visibility, choice, control

 

Together, ZPD and Privacy-First Personalization equip brands to build deep, lasting, and profitable customer relationships based on trust, while ensuring compliance with evolving privacy regulations.

How can you bring Privacy-First Personalization to life for your brand? At a high level, it involves three core practices:

  • Unify ZPD from all your sources into ZPD profiles. Creating digital experiences to systematically collect ZPD is easy, and many brands already have existing sources they can tap into — like product finders, surveys, digital campaigns and promotions, chat bots, loyalty programs, and email preference centers. Every source should integrate with and progressively enrich your ZPD customer profiles.
  • Give customers transparency and control over their profiles — and build trust. Make it easy for customers to keep their ZPD profiles up-to-date via a secure customer portal on your website or app. The portal empowers customers to continuously improve their experience with your brand.
  • Activate ZPD to improve customer experiences. Use ZPD to personalize the content, products, and offers you show to each customer or segment at key moments of engagement on your website, app, emails, and other addressable channels like custom audiences on Facebook and Instagram.

 

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Zero-party data is brand-specific, so you should define your ZPD data model around the most important customer attributes for your business. Some attributes may be immutable or long-lived (e.g. a personal characteristic, or a list of favorites), while others may be shorter-lived (e.g. plans to take a family vacation or renovate a kitchen). Your ZPD profiles should support multiple data types and essential meta-data for each attribute — e.g. an “update after” date, so you can automatically refresh the attribute on a certain cadence.

Finally, make sure you can get data in and out easily and securely via a ZPD API — so you can connect ZPD to all of your teams and tools while safeguarding privacy.

This is the first in a series of posts about zero-party data and Privacy-First Personalization. Read the second post here: How To Source Zero-Party Data.

To learn about our API-powered platform for ZPD and Privacy-First Personalization, visit https://www.wyng.com/.

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