Study: 90% of marketing firms will capture zero-party data within a year

Nearly all marketers are using this approach to respond to data deprecation, but less than half know how to use zero-party data effectively, according to the Forrester study.

Nearly all marketers (97%) agree the personalized digital experience is a cornerstone of marketing programs, and a new study finds 90% of marketers are actively responding to data deprecation by capturing zero-party data within a year.

Data deprecation is occurring because of browser and OS restrictions and privacy laws. This has made it more difficult to capture the data necessary to do personalized marketing, according to the study by Forrester.

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The findings also revealed that 85% of marketing firm respondents said zero-party data is critical to creating effective personalized experiences.

Forrester defines zero-party data as data that a customer intentionally and voluntarily shares with a brand. Usually this is done in exchange for a benefit such as an exclusive offer or reward, the firm said

“Zero-party data has emerged as a powerful tool to help deliver personalized experiences. However, many firms underestimate the benefits of zero-party data, even going so far as to unnecessarily limit their use of it to post-acquisition tactics,” the study said.

However, while 82% of respondents said they have access to zero-party data, 42% admitted they don’t know how to use it effectively, according to the study. This means marketers must learn how to acquire and effectively use zero-party data.

Zero-party data: challenges and opportunities

A majority of respondents acknowledged that data deprecation has made it more difficult to acquire customer data, cross sell or upsell, while over half (70%) said it has become more challenging to track customer journeys across channels and touchpoints, the study said.

While most marketers recognize that zero-party data is part of the solution, they are experiencing a number of challenges in acquiring and using zero-party data. The most common challenge reported is that the data is not accurate (36% of respondents). Because consumers are volunteering information about themselves, there is concern that consumers won’t always provide accurate information about who they are or what they want. Additionally, nearly a third (32% of respondents) said they’re concerned that customers won’t share zero-party data, according to the study.

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The survey findings also suggest that marketers underestimate how beneficial zero-party data can be. When asked, “How is your organization using or planning to use zero-party data?” less than half (45%) of respondents said, “Deriving customer insights and customer intelligence.” An equal number answered, “Tracking customer journeys across channels and touchpoints,” the study said.

Forty-three percent of respondents said they are using or plan to use zero-party data to learn who their customers are or “create personalized experiences or messages.” Only 35% are using or plan to use zero-party data to remarket to existing customers, cross or up-sell, the study said.

Marketers are investing in technology to leverage zero-party data

As data deprecation threatens the effectiveness of marketing throughout the customer journey, marketers are turning to zero-party data to form direct relationships with prospective customers. As part of their zero-party data strategies, many of the marketers surveyed said they plan to work with partners over the next 12 months.

A top priority for nearly two-thirds of respondents (63%) is to use third-party technology to help them “deliver personalized experiences using zero-party data.” For 47% of respondents, utilizing technology is a top priority for verifying the accuracy of zero-party data provided by consumers.

Additionally, 59% said they plan to gather zero-party data by running sweepstakes and giveaways, and 66% said that building or enhancing their existing loyalty programs in order to capture more zero-party data is a top investment priority, according to the study.

“Because zero-party data is entirely opt-in, brands need to open their minds to the multitude of ways they can inspire consumers to provide them with high-quality data,” said Jake Weatherly, CEO of SheerID, which commissioned the study. “The good news is that there are myriad opportunities to do so, ranging from offering VIP services, to discounts on products, to products customized for the individual.”

Marketers who offer real value, Weatherly added, will not only be rewarded with valuable customer data, but also set the stage for long-term customer relationships.

Forrester Consulting surveyed 200 digital marketing decision-makers focused on customer acquisition. The study was conducted in February 2022.