Zero-Party Data Strategies Fuel Personalization in 2021

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By Richard Jones, CMO of Cheetah Digital

25% of CMOs will adopt zero-party data strategies in 2021. Why? Because they have to. They have no other choice. As browsers and platforms do away with cookies, it becomes vital for businesses to interact with customers 1:1, garnering their trust and, as a byproduct, their contact information.

The problems with third-party data and adtech as we know it

Cambridge Analytica, “Fake News,” and the sale and storage of personal data – you would think Mark Zuckerberg enjoys being hauled in front of Congress. Social media advertising is hallmarked by a lack of transparency, performance fraud, ad blocking, and spamming ad frequencies.

At present, only 14% of consumers believe the information they read on social media is trustworthy, and two-thirds have data privacy concerns. Furthermore, the research we conducted earlier this year found 39% of U.S. consumers don’t like ads driven from cookie data. Simply put — people no longer want to be tracked through the web and targeted later with their search history.

The over-reliance on third-party data and Facebook stripped marketers of the skills to gather data directly from consumers at scale. As consumer privacy legislation mounts and browsers and brands alike take a stand against the use of third-party data, brands will have to earn the trust of consumers, which is much harder to do than snooping on their browser history.

What is zero-party data, and how can marketers collect it?

Zero-party data might sound like a new term, but in reality, it’s about getting back to the basics. Zero-party data, as described by a principal analyst at Forrester, Fatemah Khatibloo, is information consumers intentionally, proactively share with brands. That data could take many forms, including purchase intentions, personal information, and communication preferences. It’s all about building trust — not just buying it.

So, how can you get your hands on zero-party data? It starts with transparency. Collecting this data should not go on in the dark corners of the internet — it must be direct and consented to and shouldn’t involve collecting any data you don’t actually need.

Loyalty programs are a great place to start. 35% of U.S. consumers belong to 4-10 brand loyalty programs, and 50% belong to 1-3. That’s a large portion of the population that is willing to exchange data for the benefits they receive from being part of a loyalty program. A successful loyalty program, though, should not be based only on transactions. Think about the unique, personalized ways you can engage your customers with custom offers, exclusive sales and the occasional surprise. You’ll be rewarded with a treasure trove of data including shopping preferences, contact details, location and more.

Take a look at how Vans created an award-winning loyalty program that helps foster emotional connections to the brand. Through a focus on experiences vs purchases, Vans Family has now reached 12 million members. Nearly 50% of US DTC revenue now comes from loyalty members.

Using zero-party data to reinvent personalization

Personalization as a strategy, personalization as a technology, and personalization as a Market are ripe for reinvention. Personalization is all about data; batch, streaming, structure, or unstructured, you need it in one place to aggregate, analyze, and activate. Gartner revealed last year that 27% of marketers believe data is the key obstacle to a successful personalization strategy, stating their weaknesses in data collection, integration, and protection.

The next generation of personalization is not about cookies or third-party data, it’s not about merchandising, and it’s not about guesswork. It is about relying on deep data insights, first and zero-party data and using machine learning to derive not only the right content, not only the right offer, not only the right channel but the right sequence of events that leads to an automated path to conversion.

Personalization in 2021 is about providing a value exchange for consumers in the “moment” when you have them on your mobile app, on your site, in your store. Marketers should think about how they can provide consumers something that will generate trust and affinity with the brand. Check out how Pure Archery Group went from the number 5 archery brand in the US to number one through putting zero party data at the heart of their marketing strategy.

Having a better understanding of your customer, from zero-party-based interests to a detailed view on customer interactions makes next-generation personalization all the rage. Applying machine learning and analytics to your personalization strategy will allow marketers to drive efficiency, effectiveness, automation, and optimization.

Richard Jones

Richard is CMO of Cheetah Digital, a cross-channel customer engagement solution provider. As an expert in zero-party data, he is committed to helping brands provide a value exchange with consumers through the lifecycle in return for consumer attention, engagement and loyalty.

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