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3 minute read
When publishers inventory their data, some types are better than others for creating the key data feedstock asset
So, What Type of Data Is Best? Zero-party, first-party, or third-party?
Zero-party data is the most accurate and reliable since it is directly provided by the reader. ZPD allows a deeper understanding of individual preferences and creates a strong foundation for personalized marketing.
First-party data is the most common and unique for publishers. It is derived from a reader's visit to your site. First-party generally starts with basic consent on the page and inserting a first-party cookie into the reader's browsers. Unlike third-party data, this data persists and is legal to leverage for most use cases. While first-party data is collected directly from customers, its biggest limitation is scale. Few publishers have the volume of traffic to leverage their first-party data signals without some type of aggregation with other publishers.
Third-party data, while providing a broader perspective on consumer behavior, can be less accurate and raises privacy concerns due to its external origin. However, it can still be valuable, especially for targeting broader audience segments or reaching new potential customers. Critically, with the upcoming depreciation of the 3P cookie, the future value of 3P data is wholly in question.
Let's examine further the differences between zero-party data and first-party data…
While both types of data help marketers personalize their campaigns, they have some distinctions regarding data analysis, accuracy of insights, and customer awareness.
The table below compares zero, first, and third-party data by relevance, transparency, accessibility, competitiveness, and reach.
Data Type |
Relevance and Transparency |
Accessibility |
Competitiveness |
Reach |
|
Zero-party data |
Zero-party data delivers precious information as consumers directly give it. It is directly connected to a publisher’s audience. |
Zero-party data is collected directly from the publisher's website or app. |
Zero-party data is given by potential customers, existing customers, or users, providing a competitive advantage for publishers to personalize content and recommendations, create look-a-like audience segments, generate advanced analytics reports, and deliver an excellent user experience. |
Zero-party data is limited to the group of users that passed their data to the publisher. |
|
First-party data |
First-party data consists of consumers who are either existing customers or have engaged with a publisher. |
First-party data is collected directly from the brand or publisher's website or app. |
First-party data is exclusively available to the publisher, providing a competitive advantage for publishers who can leverage this data. |
First-party data is limited to website visitors (i.e., their online audience) and existing customers (e.g., offline CRM data). |
|
Third-party data |
3P data is collected and aggregated from various sources, losing the direct connection between data sources and users. This often leads to lower relevance. Most data brokers and DMPs need more transparency regarding creating data segments. Risks include outdated or inaccurate data due to extrapolation and lookalike modeling. |
Once an integration with a DMP or data broker is established, data sets can be purchased on demand without additional implementation. |
Third-party data, although widely accessible, provides less of a competitive edge as many companies have access to the same pieces of data. Privacy, Security, etc |
Data brokers and DMPs aggregate data from multiple partners, allowing access to data on almost every Internet user. The audience size is often larger than the combined first- and second-party data segments. |
Why 1PD, why now?
But what makes first-party data important for publishers? To answer this, we need to explore the history of data in targeted advertising.
Historically, targeted advertising heavily relied on third-party data. Companies embed pixels on a publisher's page to track user behavior across numerous websites, grouping similar users for targeted advertising, a practice known as Audience Targeting. Big companies like Oracle, Lotame, Adobe, and Neustar were at the forefront of collecting this data. However, this dependence on third-party data has dwindled over time. Default settings on Firefox and Safari now block third-party cookies, and Chrome users employ methods such as incognito mode and ad-blocking extensions to prevent third-party cookies. Consequently, a mere 30% of the US market is presently accessible and available for third-party data targeting.
This shift has opened the door for publishers to leverage their first-party data. Accordingly, publishers must generate and manage their first-party data and determine how to disclose it to potential buyers.
Transitioning to first-party data presents hurdles for all but the most prominent publishers, notably the lack of skill, knowledge, scale, and infrastructure necessary to collect, manage, and effectively integrate this data into the bidding process. We'll delve into this later.