The Future of Premium Programmatic: Scaling Zero-Party Data

Programmatic Advertising is in a perpetual state of flux. Exciting new channels, buying methods, and success metrics are contrasted with transparency issues, mistrust, and ever-decreasing engagement rates.

Although time has been called on the industry more times than there’s been Fast & Furious sequels, budgets and demand generally increase year-on-year, and marketers continue to lavish budgets on clicks, impressions and all manner of vanity metrics.

Spamming consumers with ads for products they’ve already bought will not enhance the reputation of programmatic.

Perhaps the biggest paradigm shift to impact the industry, as well as the entire Digital Marketing landscape, is the new era of privacy and the move away from third-party data sets to power programmatic. The restrictions on third-party tracking cookies implemented by browsers has receded third-party data accuracy, as well as the habitual gripes regarding these aggregated data sets being stale and unreliable.

Privacy legislation, such as Europe’s GDPR and the recently enacted CCPA in the U.S., amount to a new age of stringent data collection, with consumer consent being essential – data needs to be compliant and also high-quality. The solution: Zero-party data.

Read more: The Next Level of Permission Marketing: Zero Party Data

First-Party Data: Purchase History, Rather Than Purchase Intentions

In a world where third-party data is at best inaccurate, and at worst, falling foul of privacy regulations, first-party data would normally be king. But first-party data has its limitations.

Traditionally, first-party data is collected through transactions, and includes things like purchases, mailing address, date of birth and the like. All valuable information, but it’s purchase history, rather than purchase intentions. In essence, future purchases are inferred from past buys, and this implied interest is implicit rather than explicit.

Spamming consumers with ads for products they’ve already bought will not enhance the reputation of programmatic.

The Solution: Zero-Party Data 

For the uninitiated, zero-party data is not first-party data with a 2020 rebrand. Zero-party data is a class of data that is intentionally and proactively shared directly with the brand by the consumer.

Zero-party data is collected directly from consumers and not by using tracking pixels, cookies or cross-device identification. Most importantly, zero-party data is accurate information, not inferred. Marketers can collect it by connecting directly with consumers and gathering the data, insights, and permissions they need to power advertising that clicks. Quite simply, it’s self-reported data like purchase intentions and preference insights to improve personalization and help build up a picture of the consumer. As it comes directly and willingly from the consumer, there are no intermediaries or guesswork.

Alas, there has always been a question of the scalability of encouraging individual consumers to supply this data, and it’s not simply a case of ask and you shall receive. Digital consumers are more scrupulous than ever when it comes to handing over their personal details and preference data. You need to offer a value exchange.

Programmatic in the Value Exchange Economy

To truly scale zero-party data acquisition, consumers need to be entertained, engaged and receive something in return for their attention and preference data. Marketers can deliver this through interactive experiences that conduct research, accrue explicit opt-ins and deliver an altogether better experience with a value exchange for the consumer.

Questionnaires, polls, quizzes, contests or social stories can incorporate reward mechanics that give consumers a genuine reason to engage and submit their zero-party data. And it doesn’t always have to be a discount or red-letter prize. Exclusive content, social kudos, personalized recommendations, and loyalty schemes can also be the catalyst for the collection of opt-ins and zero-party data.

Capturing consumer motivations, intentions, interests, and preferences at scale allows for truly personalized advertising. And by leveraging the right mechanics, and offering a value exchange, your customers will tell you what products they desire, what they look for in a service, and what motivates them to purchase.

To put this in context, let me provide a real-world example. Bowtech, an archery brand, was looking to increase engagement and gather zero-party data from its customers. So, it’s Marketing team implemented different methods of data collection including contests, quizzes and other interactive experiences. The result: a 500% increase in engagement with their digital ads.

And all of the data that Bowtech gathered was willingly shared with the brand with the result that it can deliver more personalized customer experiences across digital properties and advertising channels. With the right value exchange and the right strategy, brands can collect zero-party data at scale.

Read more: The State of Programmatic Advertising: Why Mobile In-App Programmatic will be Really Different in 2020