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The polar shift in privacy-first data

Author: Jennifer Burns


There’s a new kid on the block, no-party data, and it’s setting the stage to change how brands think about consumer privacy and customer experience. The two have almost always been pitted against each other, paving the way for a cookieless solution. In the past decade digital personal information has become protected through various legislation, most famously the EU’s General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA), with many more laws set to take effect in the coming years. That legislation forced companies to be transparent about their data collection, storage, and sharing practices. It also forced companies to create opt-in or opt-out consent boxes, depending on the law. But those laws are not universal, so privacy-focused browsers such as DuckDuckGo and Brave have become more popular. Using these allows consumers to visit websites without any data collection.

Major search engines such as Bing, Yahoo, and Mozilla have already blocked third-party data collection. Google is set to begin phasing out third-party cookies in 2024, after a recent delay stating more time is needed to “evaluate and test” privacy-focused alternatives. While Apple does collect - and use - some consumer data for their own purposes, Apple iOS is a major win for consumer privacy, restricting third-party data and applications until permission is granted by the user. Meanwhile, MIT Is currently working on a project that could use no-party data to allow consumers to control with whom and when information is shared, if at all.

The reason for all of this: consumers have lost trust in what’s happening with their information. As personal information and interaction data is bought and sold across the internet to deliver targeted advertising, the thought of it can be downright creepy to consumers. Weren’t you just talking to your friend at lunch about a car you want to test drive? And there’s an ad for it the next time you log on to the internet.

Consumers have pretty much had it - but they still expect brands to deliver an experience. The question is, how can brands do that without the key ingredient, data? Brands use your data to identify what you want and then make you an offer or suggest something once machine learning determines what you’re looking for. Without data, the customer journey would take much longer, with more attempts using different keywords and sometimes no results, leading to frustration. The data used to understand customer intent has traditionally come in many different forms.

Third-party Data

Third-party data is arguably the least trusted and the least effective, given new laws and the use of privacy-focused browsers that no longer allow tracking and sharing across internet sessions, devices, and domains. This is why something you looked for last week could appear as an ad on your Facebook page and never seems to go away. A third party picks up information about you and your online journey, such as your habits, interests, and websites you visit. It then aggregates that data and shares or sells it, so ads can be presented to you. However, it became less trusted when consumers learned about more questionable reasons for third-party data sharing.

With Google holding 28.6 percent of the digital advertising market, when it phases out third-party cookies in 2024 marketers need a viable alternative, or they’ll no longer be effective. 

Second-party Data

Second-party data is data collected about you as first-party and shared directly between trusted partners. Industry analyst group Forrester explains in this case the other company is providing access to its first-party data. For example, when you apply for a loan - at some point in the sales process your credit score will be pulled from a major credit bureau. This data type isn’t very controversial and is necessary to conduct some types of business.

First-party Data

First-party data is data one entity collects about a user on their own platforms and is kept on their servers. The brand uses that data to personalize the customer experience by remembering your preferences or sending you an offer related to your interests. First-party data often saves the consumer time by collecting and storing the information needed to save items in a cart for checkout, or log-in information. It also saves frustration by remembering what you’ve already purchased. You wouldn’t want an offer for a discounted flight that you paid full price for the day before!

Zero-party Data

Zero-party data is data proactively provided by the consumer to a brand. It’s a subtype of first-party data because it’s collected directly by the company. This usually requires filling out a form, questionnaire, or even taking a quiz, so the brand can learn what you’re interested in. Every industry collects and uses zero-party data, especially organizations that utilize frequent shopper or loyalty programs based heavily on consumer behavior.

Zero-party data is often seen as the solution to massive data gaps from the deprecation of third-party cookies, but it still requires consent. The problem is now much deeper with 79% of American consumers no longer trusting what happens to their personal identifiable information, according to the Pew Research Center. Many people are choosing not to share any of it - unsure what’s happening with their name, address, credit card number, and any other info that could be sensitive.

No-party Data

CX Vault, the no-party data solution, doesn’t collect any of that. It contextualizes actions and journeys in real-time without knowing who the visitors are. Based on this session-specific relevance it then delivers appropriate offers or ads, satisfying consumers’ desire to stay private while delivering a much better experience.

Consumers are concerned about the use of their information. Becoming savvier, they now recognize offers made in poor judgment, even distasteful – turning even a loyal customer off from your brand. And they certainly feel the sting of less privacy when offers are made for items they can’t recall ever searching for online. Tech and advertisers need to start thinking like most consumers that don’t trust what’s happening with their data. The innovation of no-party data is the next step in the evolution of privacy-first marketing.

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