Most marketers are now using or considering zero-party data—data that consumers voluntarily provide brands—in order to combat increasing challenges with data deprecation, resulting from browser and operating system restrictions as well as a growing number of privacy laws, according to new research from Forrester Consulting and SheerID.
According to the new study, The Data Deprecation Challenge and Promise of Zero-Party Data, 90 percent of marketers surveyed say their firms will capture zero-party data within 12 months while 85 percent stated that zero-party data is critical to creating effective personalized experiences. However, while almost as many respondents said they have access to zero-party data (82 percent), 42 percent admitted they don’t know how to use it effectively.
Zero-party data: challenges and opportunities
Almost universally, marketers recognize the value of personalization in marketing, with 97 percent believing that personalized digital experiences are a cornerstone of marketing programs. However, growing privacy restrictions have made it more difficult to capture the data necessary to do personalized marketing: a majority of respondents acknowledged that data deprecation has made it more difficult to acquire customer data, cross sell or upsell while over half (70 percent) said it has become more challenging to track customer journeys across channels and touchpoints.
While most marketers recognize that zero-party data is part of the solution, they are experiencing a number of challenges in acquiring and using zero-party data. The most common challenge reported is that the data is not accurate (36 percent of respondents). Because consumers are volunteering information about themselves, there is concern that consumers won’t always provide accurate information about who they are or what they want. Additionally, nearly a third (32 percent of respondents) said they’re concerned that customers won’t share zero-party data.
The survey findings also suggest that marketers underestimate how beneficial zero-party data can be. When asked, “How is your organization using or planning to use zero-party data?” less than half (45 percent) of respondents stated “Deriving customer insights and customer intelligence” while an equal number answered, “Tracking customer journeys across channels and touchpoints.” A meaningful percentage of respondents (43 percent) are using or plan to use zero-party data to learn who their customers are or “create personalized experiences or messages.” Only 35 percent are using or plan to use zero-party data to remarket to existing customers, cross or up-sell.
How marketers are investing in zero-party data
In support of their zero-party data strategies, many of the marketers surveyed plan to work with partners over the next 12 months. Close to two-thirds of respondents (63 percent) list utilizing third-party technology to help them “deliver personalized experiences using zero-party data” as a top priority, while 47 percent listed utilizing technology to verify the accuracy of zero-party data provided by consumers as a top priority. Additionally, 59 percent listed that they plan to gather zero-party data by running sweepstakes and giveaways, and 66 percent say that building or enhancing their existing loyalty program in order to capture more zero-party data is a top investment priority.
“Because zero-party data is entirely opt-in, brands need to open their minds to the multitude of ways they can inspire consumers to provide them with high quality data,” said Jake Weatherly, CEO of SheerID, in a news release. “The good news is that there are myriad opportunities to do so, ranging from offering VIP services, to discounts on products, to products customized for the individual. And by offering real value, marketers will not only be rewarded with valuable customer data, but also set the stage for long-term customer relationships. It’s for these reasons that we built a product that verifies the accuracy of zero-party data, so marketers can be confident in running bold marketing campaigns.”