Making Zero- and First-Party Data Work Harder as Privacy Policies Evolve
Third-party data has long been a staple in how nonprofit brands craft personalized experiences, but that approach will be met with serious challenges in the years ahead. Constituents want to feel deeply connected to the organizations they care about, without worry that their privacy and personal data are being exploited. As a result, the use of data is now under a microscope, with big tech and government regulations demanding change in the landscape. Nonprofit marketers have been thrust into a position where they’ll need to lean more heavily on first- and zero-party data to achieve their goals. Here’s what they need to know to successfully navigate this transition.
Understand Which Policy Changes Are Underway and Which Are Coming Soon
Since the implementation of General Data Protection Regulation in Europe, legislation surrounding the collection, storage and use of data has expanded at the U.S. state level. The California Consumer Privacy Act went into effect in 2020, and the California Privacy Rights Act will soon follow, going into effect in 2023. Virginia is seeking to make a similar impact, instituting privacy legislation of its own, which will go into effect in 2023. Another 30 states have started down the path of developing privacy laws. Many marketers have raised concerns over their ability to manage and comply with dozens of state-level regulations, arguing in favor of a single federal regulation to reduce complexities.
Big tech has also modified the way they do business over the past several years. Apple blocked third-party cookies in 2017 and is executing 2021 plans that give consumers more control to opt in or out of data sharing within their smartphone applications. In 2019, Mozilla’s Firefox began blocking third-party cookies unless the customer opted in. In 2020, Apple’s Safari followed suit. But the greatest impact is yet to come as Google Chrome — the browser responsible for over 60% of web searches in the U.S. — eliminates third-party cookies, beginning in 2022. Without this data, Chrome will create a higher walled garden that allows marketing to cohorts rather than individual consumers.
Needless to say, the challenge for marketers to remain relevant amid consumer, government and industry changes will require careful thought and effort.
Know the Ins and Outs of Zero- and First-Party Data
First-party data is information an organization collects directly through its own sources and media channels. This data collection method ensures organizations follow consent standards, meaning constituents have some level of awareness that their information is being shared to help develop personalized experiences. Examples of first-party data include historical transaction data, demographic data, behavioral data, web (media, social, site) data, call center interactions or any other data collected directly. Within many organizations, siloed departments may hold additional first-party information that helps paint a clearer picture of the constituent. It’s critical to bring all these data feeds together to develop more precise targeting and improve the constituent experience.
So, how does zero-party data differ? As noted by Forrester Research, zero-party data is “data that customers intentionally and proactively share with a brand, which can include preference center data, purchase intentions, personal context and how the individual wants the brand to recognize her.” This differs from first-party data. Forrester points out that while companies keep zero-party data, they do not own zero-party data. Instead, consumers grant a brand the right to use their zero-party data for the purpose of a particular intent or value exchange.”
That said, zero-party data should be collected for a purpose, with thoughtful intent to provide a benefit to the customer. The request should inspire greater loyalty, not feel like a hassle or nuisance. Also keep in mind that zero-party data is fluid and will change as constituent interests change, so updating this information frequently is key to creating relevant experiences. Consider setting up preference centers to allow donors to choose how they want to be contacted. Use surveys and quizzes to isolate their specific interests within the organization, or even to identify new trends and program insights.
Make a Strategic Roadmap for Privacy Changes
With the current privacy and data changes taking place, zero-and first-party data are becoming a more vital asset than ever. This data includes all the customer, media, product and business information that can be gathered, stored and reused to connect with constituents. Based on the “Merkle 2021 Customer Engagement Report,” 88% of respondents say integrating and connecting first-party data is a high priority in the next six to 12 months. As organizations make this pivot, they should ask themselves the following questions:
- Is the data you’ve gathered easy to access? When departments operate in silos, you’re left with a shallow view of the data available to your organization. Consider how you can close these information silos, both organizationally and technologically, to build a more robust picture of your donor.
- How do you collect and leverage various first-party data today? As an organization, align on how and why specific data is being collected and used. Clearly defined use cases help keep your goals consistent and support better constituent experiences.
- What gaps do you have in data today that you could possibly supplement? Once you’ve documented the data and its use cases available today, determine new strategies to build additional data collection methods that can bolster your marketing efforts.
- How are you managing consent and privacy? Create privacy by design, with upfront communication on how the information is being used and the ability of the donor to manage that information. It’s a small step that gives the donor a greater sense of control and loyalty.
- Have you explored a private graphing capability? Integrating as many owned sources of data into a single customer ID is the final piece to help build new experiences and strategies that improve performance.
Prepare to Act Nimbly in an Ever-Changing Landscape
The pandemic proved that we have no choice but to innovate when faced with the unknown. There’s rarely a playbook for massive cultural shifts. As consumers look to protect their privacy, states pass new regulations, and big tech moves to reduce digital identification, marketers will need to evolve their data strategy. And beyond the notion of “keeping up with the times,” first- and zero-party data is your greatest asset to build personalized customer experiences that inspire loyalty. Invest thoughtfully in data today to help build lasting value for your organization.