What’s best, zero party, first party or third party data?

ChrisHoggEarlier this summer, Google announced it would be updating Chrome to provide users with more transparency about how sites are using cookies, as well as simpler controls for cross-site cookies.
Understandably, this has created some confusion around how this will affect advertisers and adtech platforms, particularly around the creation, selling, and buying of third-party data. However, much of the confusion stems from a lack of clarity on the key terms and can be rectified.
The difference between third-party data and third-party cookies
Although third-party data and third-party cookies sound similar, they are two entirely different things but, often, marketers confuse the two terms.
A third-party cookie is a cookie placed on a device by a website from a domain other than the one a user is visiting in order to store personalisation preferences and tracking information. For example, when you visit Clarks’ site, a cookie may be placed in your web browser from one of the retailer’s marketing technology partners to remember that you were interested in that new pair of shoes and allow Clarks to subsequently market to that user across sites/channels beyond their domain.
Alternatively, third-party data typically refers to data that did not originate with the buyer or seller but rather, with a third-party. Third-party data includes various types of information, whether it be demographic, interest, or intent data, and, depending on the source, there are many ways third-party data is acquired and used by marketers.
It might have originated in an offline consumer data file onboarded through a partner like LiveRamp or it could be related to the collection of common consumer actions on publisher websites, like commenting on an article or sharing it on social media.
With that in mind, Google blocking third-party cookies may not necessarily affect the scale of third-party data, depending on what that third-party data is and where it’s coming from.
For example, if Clarks wants to digitally market shoes to people of a certain age, gender and household income, it can purchase third party demographic data from a consumer data company that has brought the information into the online world from offline records via a data onboarder.
That demographic data was not created by tracking consumer activity across the web via third-party cookies – but it is third-party data. Finally, third-party data can be associated with mobile advertising IDs and streaming device IDs, and in those cases, the data would not at all be affected by changes to treatment of third-party cookies.
Yet just because they third-party data and third-party cookies are not the same it doesn’t mean the changes won’t affect impact the ad marketing ecosystem. Marketers do need to be prepared.
The relationship between first-party data and third-party cookies
Third-party cookies play a critical role in the on-boarding of offline data into web environments and are also the best connectors to sync such data with activation platforms such as demand-side platforms, ad servers, or even attribution platforms.
Historically, third-party cookies have been the ID plumbing of choice for connecting and activating first-party data. Without robust ID connectivity via third-party cookies, marketers and their technology/agency partners have to rely on a hodge-podge of different ID types and inefficient connection techniques.
While it might be compelling to talk about the ascent of first-party data in marketing, we all must pay close attention to how such data can be used in an open independent web. Otherwise, the only places marketers will be able to use their first-party data is within the large walled gardens.
Marketers should also consider zero-party data; data that customers willingly share with marketers, such as consumer responses to a poll or survey. Zero-party is being hailed as the avenue to rebuild trust and create meaningful connections with consumers. With zero-party data, everything is “declared” because it is user-supplied and self-reported.
Forrester recently heralded zero-party data as a major opportunity, especially in lieu of continued regulation over the collection and use of audience data.
Most importantly, zero-party data can be incorporated and combined with marketers’ first-party data for an even richer view of the customer. Connectivity is key here as well and suffers the same challenges as first-party data.
Without effective web ID infrastructure to transport zero-party data from Point A to Point B, such data will be trapped at the source. Once again, marketers need effective web ID infrastructure – through third-party cookies or suitable alternatives – to activate these data assets.
For advertisers, the Google Chrome changes offer a clear improvement over the current “keep or delete” options, offering greater control and transparency for users.
Regardless, advertisers should get ready for continued changes in the ecosystem, and the first step of preparedness is to focus on their first-party data and the opportunities that it presents.

Chris Hogg is managing director EMEA of Lotame

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