Zero, First, and Third-Party Data: Explained for a Cookieless World

Successful businesses understand their customers perfectly and tailor marketing and ad content to their needs every time, making business-customer relationships intense and mutually satisfying. 0,1,2,3 party data is what marketers all over the world work with now, trying to find perfect ways to capture and process every byte of it. 

These are different types of information a business can get about its customers from various sources. Depending on where the data comes from, it’s either zero, first, second, or third party. Let’s take a closer look at each type of data now.

What is Zero-Party Data?Copy link to this section

By definition, zero-party data is the information customers share with the business willingly. It’s the information your customers are happy to provide in exchange for something you offer, like a better experience, discount, tailored offer, brand loyalty program membership, early launch access, etc.

Examples of zero-party data:Copy link to this section

• Loyalty program membership
• Interactive responses
• Preferences
• Purchase intentions
• Interests
• Demographics

At the same time, zero-party data is the hardest to obtain, as it requires direct input from the customer. To collect such data, you must offer the client something worthwhile.

Zero-party data is arguably the most valuable data from your clients, as it is gathered through direct contact with a customer. It is highly accurate, reliable, individual, and collected ethically (with the customer’s explicit consent). 

What is first-party data?Copy link to this section

First-party data is information you collect about your customers from your channels to learn how a customer interacts with your business. It’s all the information you can gather from the encounters you have with your clients using the tools you have.

Examples of first-party data:Copy link to this section

• Interactions and behaviors of mobile app and website users
• CRM data
• Contact information
• Purchase history
• Social media information
• Email campaign engagement
• Support history
• Loyalty program information

So, the critical difference between zero-party and first-party data is that with zero-party data, customers have to make an input and expect something in return. First-party data is information you gather based on the customer’s interactions with your brand. 

For a long time, first-party and zero-party data were grouped together because both data types come directly from the business's interactions with its customers. Now that we are about to enter a cookieless future without third-party data, it’s vital to distinguish between the types of data you collect and know how to work with each one.

What is second-party data?Copy link to this section

Second-party data is first-party data you collected with someone else’s help. For instance, you establish a trusted partnership with a business operating in the same industry, so you decide to share customer data mutually. In such a way, their first-party data gets to you and becomes your second-party data. Similarly, when your company acquires another business, its first-party data becomes your second-party data. 

Examples of second-party data:Copy link to this section

• Interactions and behaviors of mobile app and website users
• CRM data
• Contact information
• Purchase history
• Social media information
• Email campaign engagement
• Support history
• Loyalty program information

What is third-party data?Copy link to this section

Third-party data is something else. It does not come from your interaction with the customers. Third-party data is an asset you buy from a source that did not collect it in the first place. Usually, marketers buy third-party data through demographic segments for their advertising campaigns. 

Sometimes, such data is purchased to enrich customer data with details you cannot access. Third-party data can provide your business with critical demographic information. 

Third-party data is aggregated by means and from sources usually unknown to you, so you can never be sure whether every piece was collected ethically and with the customer's consent. For this reason, its accuracy and reliability are questionable. Another thing about third-party data is that numerous companies can buy it simultaneously, making the competition for customer attention based on such data tougher. 

Examples of third-party data:Copy link to this section

• Age
• Education
• Income
• Answers to surveys
• Website visit history
• Beliefs and attitudes
• Health information
• Property ownership

Roles of 0,1,2,3 Party Data in a Cookieless WorldCopy link to this section

As you’ve probably already heard, Chrome wants to begin third-party cookies deprecation, following the lead of Safari and Firefox, which have already implemented Intelligent Tracking Prevention algorithms that block third-party cookies.

With such drastic changes around the corner, marketers must adopt more privacy-friendly practices and rely less on data from third-party services. Customer tracking without cookies is one of the main pain points of marketers now.

Role of zero-party dataCopy link to this section

While the destiny of third-party data is still being determined, zero-party data is going nowhere. Arguably, it is the most valuable data asset a business can get. It helps companies raise the quality of their marketing efforts and tailor them to customers' needs and preferences. So, zero-party data is vital to building perfect, loyal customer relationships. Zero-party data is the most valuable personalization asset.

Role of first-party dataCopy link to this section

First-party data also needs to be more emphasized in light of the coming changes. Any business can gather and handle this type of data. 

First-party data has a massive role in a cookieless world. With this data, you can polish personalization, and nurture your connections with customers. You can also tune up targeting (by utilizing customer behavior and purchase history data).  Are first-party cookies going away like the third-party ones? Luckily, no, not in the foreseeable future.

Role of second-party dataCopy link to this section

Second-party data can provide more secure, transparent, and reliable data exchange for cookieless marketing. This data lets you better understand the target market without relying on third-party data. 

Second-party data that a business gets from advertising partnerships can also help identify audience segments better. This leads to better advertising campaign results and a more transparent, insightful audience understanding. With this data, you can optimize marketing and advertising efforts for a better input-income ratio.

Impact of third-party dataCopy link to this section

As the future of third-party cookies looks grim, it makes sense to avoid relying on third-party data as much as possible. Naturally, most companies still use third-party cookies when they can. However, you don’t want to feel like your business life support is unplugged once third-party cookies are gone.

How to Use Zero and First-Party Data in Server-side TrackingCopy link to this section

Using server-side tracking for managing zero and first-party data has a lot of benefits. Firstly, server-side tracking is reliable because you have control over the data transmission and management. Also, it helps you provide better data protection. What’s more, it can help you create privacy-compliant advertising. 

Server-side tagging allows you to send first and zero-party data from your CSM, CRM, or database to server Google Tag Manager. Then you can deliver it from sGTM to advertising and analytics platforms such as Facebook, Google, TikTok, etc. It can help you collect more information about your customers' events even without them visiting your website. It also helps to improve the attribution and performance of advertising campaigns. Offline conversions might happen when your customer calls your call center and visits your offline store after the customer learns about your product or brand through online advertising. It helps to connect offline conversions to online campaigns.

Server-side tracking allows you to send data directly from your server endpoint—the Google Tag Manager server container. Our guide provides detailed instructions on sending requests to the GTM server using webhooks and how to view and test webhook data in the server GTM debugger. This gives you the confidence to handle server-side tracking easily.

Debugging incoming webhook requests in sGTM is quite complicated, that’s why we created a power up that simplifies this process. You can use HTTP preview header to debug any incoming requests or webhooks in the server Google Tag Manager preview. Stape's preview header is available to all users, so you can send requests to sGTM from elsewhere outside the Web GTM and check them in the sGTM debugger.

You can also store zero and first-party data on the server and enrich your web events. For example, if a user ever created an account on your website or made a purchase, you can use the stape store to enrich pageview events for them. Alternatively, for those who visited your website from the ad and then converted offline, you can enrich purchase events with necessary cookies (for example, fbp and fbc for meta) before sending the purchase event to meta.

Building a custom CDP (Customer Data Platform), a system that collects and manages customer data from various sources, and enriching event data using server-side GTM allows you to combine all your customer information in one place, making it easier to understand and reach out to them more effectively.

All in all, server-side tracking seems like the most reliable and viable way of capturing and handling customer data in the cookieless world.

Strategies for Collecting and Using 1-st Party Data - Best PracticesCopy link to this section

You should collect first-party data because it’s vital for understanding how customers interact with your business. Unlike third-party data, which is unreliable and sometimes compromised in accuracy, first-party data is accurate, reliable, and is always there for your business to use. 

How to collect 1-st party data and use it:Copy link to this section

• Use first-party data analytics tools. A tool like Google Analytics is excellent for starting to gather first-party customer information and working with it.
• Encourage your customers to create accounts. You get more data by encouraging them to create accounts in exchange for receiving a perk or a better experience. You can get valuable information like ​​customer name, email address, and shipping address. This can help you identify users better, track their behaviors, and cater to their needs.
• Ask for feedback and study it. Gather all the feedback from your customers and examine it to identify tendencies and points of improvement.
• Make polls, surveys, quizzes, and questionnaires. This interaction will let you better understand your customers and identify ways to serve them better.
• Use the power of CRM systems. With a customer relationship management system, you can keep customer data in one place, segment it, and effectively utilize it for marketing and advertising.
• Implement server-side tracking. You can obtain high-quality web data and fully control it with server-side tracking. Moreover, it empowers companies to be independent from third-party data sources. It also protects business data, as owners decide whom to share the captured data with.

Remember that collecting and managing first-party data effectively means being transparent, letting your customers know what data you collect, why you want it, and how you protect it. It also means getting your customers on board by ensuring their information is safe with you and used only in their best interest. 

Prove that you can use customer data to improve the shopping experience and provide better service overall. Show your customers that it’s worth trusting their data with you.

ConclusionCopy link to this section

Naturally, any business attempts to use customer data whenever and wherever it comes from. Finding the correct ratio for collecting and using zero, first, second, and third-party data is essential for the company's well-being in the changing marketing and advertising era. 

As businesses work on mastering user tracking without cookies, it becomes evident that relying on zero and first-party data is the right approach. Using server-side tracking is the simplest way to cope with the depreciation of third-party cookies while getting the most of the data you gather. 

Don’t hesitate to contact Stape support: we will answer your questions and help resolve any issues you might be experiencing as quickly as possible.