Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m Paula Thomas, the founder and CEO of Let’s Talk Loyalty and also Loyalty TV. If you work in loyalty marketing, you can watch our video interviews every Thursday on www. loyalty. tv. And of course, you can listen to our podcasts, every Tuesday, every Wednesday, and every Thursday to learn the latest ideas from loyalty experts around the world. Today’s episode is part of The Wiser Loyalty series, which is hosted by our partners, The Wise Marketer Group. The Wise Marketer Group is a media, education and advisory services company providing resources for loyalty marketers through The Wise marketer digital publication and The Loyalty Academy program that offers the certified loyalty marketing professional or CLMP designation. I hope you enjoy this weekly podcast, The Wiser Loyalty Series brought to you by Let’s Talk Loyalty and The Wise marketer Group.
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Aaron: Hi everyone. Welcome back to The Wiser Loyalty podcast series with Let’s Talk Loyalty. I’m Aaron Dauphinee, CMO of The Wise Marketer Group, and I have with me. My partner in crime, Bill Hanifin, who’s the CEO of The Wise Marketer Group. Bill, how are you today?
I’m doing great, Aaron. Good to see you.
Good to see you too.
I mean, we’re, we also, people will be hearing us obviously, but on the podcast, but we get to see each other as we, as we record these. We’re heading into a long weekend up here in Canada for Thanksgiving. And so we thought that we would put together an interesting conversation today around Zero party data.
It’s a it’s a bit of all the buzzword, right? And so we’ll get to that in just a second. But for those of you who aren’t familiar with our podcast series, a real quick up to speed on it. We are subject matter experts from the industry that talk about the curriculum from our Loyalty Academy course where you can earn your certified loyalty marketing professional designation.
The CLMP for short, we have about a thousand individuals around the world that in 54 countries that have this designation. It’s a great community. That’s come together in this particular month of October. We’re talking about loyalty analytics and a variety of different conversations. Last week we talked about
Sources of data surveillance, capitalism, you know, getting that 360 view. And before we hop into the content Bill, I’ll take a moment here. I was quoting stuff. And this happens sometimes when you don’t have the data at your tips of your fingers. We’re talking about the hygiene and quality of data. And I.
I quoted the fact of a Gardner report of something incorrectly, and I wanted to correct that for folks that follow along each week. And so what I was saying around data hygiene is, is that their businesses are really falling short on the quality of the data that’s out there to feed generative generative AI applications.
And so that and what we found is that only 4 percent so, of CMOs say that their data is actually ready for gen AI applications. And that’s from a Gardner report. I mixed that up, unfortunately, with a different stat that has a number. Of fours in it as well, too, which is, you know, that 44 percent of business leaders have already recognized this as a problem and are actively driving forward to modernize their programs to be able to support their A. I. Ambition. So I just wanted to make sure that’s clear that there’s 44 on the way and there’s 4 percent that are actually there today. So it’s good. Good to know.
Bill: Yeah.
Aaron: But that aside, a little bit of a correction, and when we can, we always like to make sure that we’re on par with the things that we’re putting into the marketplace.
But this week, let’s talk about zero party data. Maybe I’ll turn it over to you and hit us off with maybe some definitions and context for how we’re even talking about this term.
Bill: Yeah, it’s it’s great because it all right. I’ll speak from the 1st person. I feel like the 0 party data term has come into my consciousness in the last 2 years.
So, on the surface, I’d say it’s a brand new term brand new concept. What is this thing? I need to understand it. I need to define it. I need to get my arms around it. And I realized, you know, as like we talked about last time, historically, loyalty marketing has been fueled by behavioral data gathered over time from customer interactions.
And we talked about sources of data in the last podcast about where it comes from. And a lot of times it comes straight from the point of sale from the so called T logs. Remember, we mentioned that funny word T log transaction logs that come from the systems that the retailers are operating. So that’s the data that most people are familiar with and what they’re used to.
And then. The story as I knew it was this.
Aaron: Yeah, talk me through it.
Bill: Right? Did Google, and then you tell me, you may have heard this differently, but Google made this announcement of, of retirement of third party cookies, and it happened in 2020, and it literally sent the marketing world into, into shock. And people, people were behaving as if their very life was under threat.
Like, oh my gosh, we’re going to lose all insight into customers. We’re not going to be able to market to them. We’re not going to have any context. And we’re, you know, oh, what are we going to do? Well, the answer was. And then suddenly I hear this word zero party data, and it was attributed to Forrester because Forrester in a report.
Had come up with the term and I mean talk about kudos to them to do it because I thought it was Google Forrester and then all the activity that we’re seeing in our loyalty marketing business globally But actually I did a little bit of research and it’s so interesting because Forrester was that much more ahead of its time than I Even realized they came out with this Research study in 2018 and talked about zero party data So it had been out there and as you know It’s something that we’ve talked about for a long time in our business You But it took the Google announcement to wake everybody up.
And I, my theory on this is that, you know, Google has I’ll tell you exactly, but Google has 65 percent of the browser market. In as of august 2024 So obviously they’re the hugely dominant player and the next three which are safari edge and firefox only total up to 26 so wow, it’s dominant Yeah, commanding lead and then if you look at the global retail market, it’s 28 trillion dollars.
I rounded that number up The physical stores represent 20 trillion of that. So 73. 8 percent. So Now, when you think about, all right, Google made the announcement about cookie deprecation, retailers and everybody else went into a frenzy. Well, in terms of what Google is doing, it’s impacting about 16, 17 percent of the revenue base.
Now, that’s very, very important. And more and more brands are, you know, everybody’s on the channel. Everybody’s working across every channel and the growth is much higher in the online segment. So I saw some statistics that said. That eCommerce sales are growing from 15 percent in 2022 to an expected 21 percent in 2026.
So it’s, it’s to say that it’s a hugely popular segment. And again, it was almost like the Google announcement was a proxy for so many things. It was a proxy for waking marketers up to what we need to get closer to our customers than just. Transactional data, and it was also kind of setting this fear of, oh, my gosh, we might have a dark spot in looking at our customer base for a large part of our revenue, which turns out to be maybe today, 15%, but it’s obviously going to grow to 2025.
it’s probably just going to continue to grow, but. That’s the story that that actually happened. And it’s so interesting because it just set us on this trend that now for the past 2 years, as you know, and it’s been a lot of fun. We’re continuing to learn. We’ve been doing webinars, writing articles, talking about at conferences.
It’s everywhere. Zero party data. Right?
Aaron: And I think that’s part of the problem. Now, as we, it’s become so infix. into our vernacular that we just assume that everybody out there knows exactly what we’re talking about. So maybe we should take a quick step back and do some definitions here just for maybe listening in new.
And I love the context of the story of how we have arrived to this new terminology. But when we think about zero party data, From what I understand it to be, you know, it’s the data that an individual consumer is, is willingly and knowingly, you know, going out of their way to give to a brand as one of their customers.
So it’s profile attribution data. It could be survey responses. It could be referral elements that come into place. It’s, it’s, it’s that stuff where I’ve raised my hand after I’ve onboarded and given you the required elements. It’s that I need to be to be in your program. It’s the over and above is really what we’re talking about for zero party data data versus first party data or what we know as loyalty marketers as, as kind of behavioral data, right?
Like that’s all there, your purchase history, your transactional stuff it could be your website activity. You’re talking about online mobile app interactions and, and, and so forth, social to some degree is starting to integrate into first data. It depends on the sophistication of. Of the brand and then how they’re doing their analytics.
But you know, those, those are kind of the, the nuances there, the subtly of, of things that I am, I am doing that I, I I need to be collected to be in the program and to have it activated kind of first party. And, and, and how I interact with the, the program versus, mm-hmm, , what I do as a customer to say, Hey, I want you to know more about me.
I’d like to invest more in this brand and here’s some information that’s going to help you to know me better so that you get more relevant offers to me and provide me with meaningful experiences on an ongoing basis, right? So I just want to step back there on the on the 1st and 0.
Bill: Yeah, and guess what?
There’s there’s 2 other buckets of data and I think maybe what do you mean? Yeah, I mean, well, what I’ve been reading lately is we’re talking about.
Aaron: Yeah, zero
Bill: party data, first party data, which you just talked about behavioral, and then there’s second party and third party data. And I think you and I, didn’t we talk about this?
We were kind of,
Aaron: Yeah, well I’ve heard of third party data. Not necessarily
Bill: in agreement about the definitions, right?
Aaron: Well, I mean, I think when you told me that second party data, I kind of said, That’s not a thing, right? Yeah, right. Like third party data, I understand that, and that’s where it’s coming from other sources outside of your brand and information that’s about your customer and the interaction.
So it could be data that you append. To or just be, you know, data that you know, from a partnership arrangement, that’s being passed over through an ecosystem play or a coalition play or something like that. So, so I don’t know the talk to me, but let’s talk about this and see if it holds water.
Bill: Well, I guess if you had to rank by number, then, you know, this, the 3rd party is a descriptive term, right?
3rd party, because you’re acquiring it from a 3rd party, or you’re somehow right. But. In that order of 0 and 1, I guess it would come as number 2, because you have, you have what you own through transactional. You have what you have asked about and has been volunteered. That’s 0. And then 2nd would be, oh, I can go out and buy you know, all sorts of demographic psychographic data.
I can get studies. I can append. I can start to fill out a profile, but that’s still. Going out and buying something that we don’t own that we’re essentially using time and then what I’ve heard is third is Maybe it’s more in web parlance or something But it’s the data that retailers and brands can gather on all of us Of which we’re not really aware of it.
So all of our our browsing history all that all the things where well It’s a lot of it is the cookies so this is the part that’s really going to go away all the All the activity when we just mindlessly click on yes, you know, except cookies because I want to go buy a pair of pants you, you’re doing that and that’s, that’s third party data in this, in this couple things that I read.
So, we don’t have to stick with those definitions on second and third, but that’s, that’s what I just read.
Aaron: Well, I, I think it’s important to have these conversations because it’s, you know, sometimes we all trip ourselves up with trying to, you know, come up with the next fanciest term and you know, consultants are notorious for this, right?
In terms of what’s cool and, you know, we’ll be having synergies going on between the two of us to, you know, make this podcast even better, right? Right. As opposed to efficiencies and effectiveness, which is really what we’re doing. We’re talking about anyway, teasing there a little bit. Don’t, don’t come after me too much, but, but I, I, I do think though, that’s one thing that’s important is that definitions do change over time and that we can’t be too hard and fast to what traditional definitions are.
But with the new ones coming in, we need to have room to make, like, make room to understand and say, Hey, well, this is the reason why it was defined the way it was. So I liked the way you said, like, Third party, it was acquired from a third party. It was literally like descriptive in terms of its intent, as opposed to now we’re getting is kind of this layering of like, well, what’s the actual data set that’s coming over?
That’s that’s being as opposed to how we attribute it. So I think that’s that’s actually a good nuance. And maybe that’s probably a decent spot for us to tie up this particular conversation. I don’t know if you want to
Bill: let me ask you 1 thing and then we’ll wrap it because I’m thinking, okay, we talked about kind of the origin story of it.
And We’ll find it as best we could. We talked about some of the inconsistencies, but then. You had a really interesting story to me about, you know, I was going to tell you that zero party data is one of those things that loyalty markers have talked about for a long time. We just use different terms.
And you had a story about how these are seeds that have been planted for a long time. But maybe it’s.
Aaron: Yeah, yeah, no, I would just say, like, in terms of the with Gardner pardon me with Forrester. Having come up with the term and just kind of putting it out there and then you telling the story of Google picking up to make create the urgency around it.
That’s that’s a flavor from an individual that I learned from in the loyalty industry. I think I spoke about him before. David Massey was in the planning program and then higher up, obviously, in terms of Preston through the alliance data systems out of out of air miles originally. And and David always used to say, Yeah.
You know, you don’t need to be the smartest person in the room, but you need to make sure that you’ve pushed forward the ideas for the best interest of the organization. And by doing that, you plant a seed and you talk about things in the moment, in an, or in a meeting with a bunch of executives, and you don’t need to force your way to say, this is what we must do.
You kind of plant that seed, you walk away. And then lo and behold, four or five months later, somebody will come back with a really great idea and say, Hey, we should do this. And your job then is to not say, Hey, you’re right. Or, Hey, that was my idea. You just say. No, hey, you’re right. Absolutely. Here’s what we can do.
We’ve, and this is, and this has had the context and then you take them on the journey from there. I feel like that’s what’s happened here with Forrester is, is they’ve kind of been humbly confident in starting and putting that definition out there. And then by circumstance, the industry is making up and running with it.
So kudos to them in following a fairly astute. You know what it makes me want to
Bill: do? We need a metaphor for For the next keynote speech, we’ll have to research what the slowest growing plant in the known universe is and we’ll equate that to zero party data because we’ve been planning these seeds for only about 18 years.
20 years.
Aaron: Yeah. I mean, and then the seeds go back beyond the definition of force. You’re absolutely right. That’s a great point. Right? As we talk about. So wonderful.
Bill: Yeah. Anyway, great. Good. Good discussion.
Aaron: Yeah, absolutely. So I think we have a couple of the conversations that were coming up for the remainder of the month.
You’ve got us for five conversations in October on analytics and stuff. But thank you so much for listening for everybody today. Again, if you’re interested in, in becoming a part of our community as a CLMP, please do. Don’t hesitate to connect with us at loyaltyacademy. org and for anyone who wants to find previous content that we’ve talked about, like I referenced our previous podcast that I was making a correction at the beginning of this, this one, you can go to the wise marketer.
com or let’s talk loyalty. com as well too, to get previous episodes. So with that, we’ll say adieu and we’ll look forward to chatting with you in the next week. That’s great.
Bill: All right. Au revoir.
Paula: This show is sponsored by Wise Marketer Group, publisher of the Wise Marketer, the premier digital customer loyalty marketing resource for industry relevant news, insights, and research. Wise Marketer Group also offers loyalty education and training globally through its Loyalty Academy, which has certified nearly 900 marketers and executives in 49 countries as certified loyalty marketing professionals.
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