Understanding First-, Second-, Third-, and Zero-Party Data

is information you collect directly from your customers or audience. It’s the digital footprints people leave as they interact with websites or apps. This data can include:

• Browsing behavior: What pages they visit and for how long
• Purchase history: What they’ve bought and how often
• Email interactions: Whether they open or click on your emails
• Account details: Details such as names, emails, and preferences

Think of first-party data as the story your customers tell you through their actions.

Why is first-party data important?

First-party data is often considered the gold standard in analytics. The information is usually accurate, relevant, and specific to your business.

As privacy concerns continue rising and , first-party data becomes increasingly valuable. It enables you to understand your actual customers, not just general market segments.

With first-party data, you can create personalized experiences, predict future behavior, and decide where to take your products or marketing strategies.

How to collect and use first-party data

There are several ways you can gather first-party data:

• Website tracking: Implement to capture user behavior, page views, and time spent on your site
• Customer accounts: Encourage sign-ups to collect demographic information and preferences
• Purchases and interactions: Track what your customers buy and when
• Surveys and feedback: about their experiences, preferences, and opinions
• Email engagement: Monitor open rates, click-throughs, and responses to campaigns
• Mobile app or product usage: If applicable, you could also in-app behavior and interactions

Once you’ve collected all the necessary information, you can begin putting it to work. Making the most of first-party data means listening to your customers and using their actions to serve them better. This might include:

• Personalizing content and recommendations
• Segmenting your audience for targeted marketing campaigns
• Improving the user experience based on common behaviors or annoyances
• Predicting and risk
• Guiding product development by listening to actual user needs

Finally, an important aspect of first-party data to remember is transparency—always let users know exactly what data you’ll collect and how you’ll use it to benefit their experience. This openness builds and ensures you’re following data protection regulations.

Zero-party data is information that customers intentionally and proactively share with a company. Unlike first-party data, which is collected through user actions, zero-party data is explicitly given.

It includes personal details that help you better understand your customers' needs, desires, and context. This could include:

• Purchase intentions: What they’re planning to buy
• Personal circumstances: Life events like moving or having a baby
• Communication preferences: How they prefer to receive updates
• Brand recognition: How they want to be addressed or treated by your brand

This data gives you direct insight into your customers’ thoughts and expectations.

Why is zero-party data important?

Zero-party data is the crown jewel of customer insights. It is incredibly accurate, freely given, and highly relevant. By using zero-party data, you can also avoid many ethical concerns surrounding data collection, as customers know exactly what they’re sharing and why.

This data type helps you go beyond to and create unique, tailored experiences that resonate with your customers on an individual level.

How to collect and use zero-party data

Collecting zero-party data is more straightforward than you might think:

• Interactive quizzes: Create engaging quizzes that help customers discover products while sharing likes and dislikes
• Preference centers: Enable users to set and update their communication and content preferences
• Onboarding flows: Ask new users about their goals or needs when they first sign up
• Polls and : Run quick, fun polls on your website or social media to gather opinions
• Loyalty programs: Incentivize customers to share more about themselves in exchange for perks
• Social media engagement: Encourage followers to give their thoughts through interactive posts

When done right, gathering and using zero-party data can redefine the relationship between your brand and customers, creating a feedback loop of trust and value that benefits both parties.

To do this, you (again) need to say how sharing this information will benefit the customer. Will it lead to better recommendations? More relevant content? Exclusive offers? Make the value exchange explicit.

You use zero-party data similarly to how you’d use first-party data. However, as the information given is often more unique and insightful, this means you can take each change or action to a deeper level.

Marketing campaigns become ultra-targeted, while content is tailored not just to your customers' needs but their broader interests, too. With an enhanced understanding of each person, you can use zero-party data to deliver something meaningful.

Third-party data is information collected by organizations that don’t have a direct relationship with the individuals the data is about. These entities gather data from various sources, such as websites or apps, and then sell or share it with other companies.

The process works something like this:

• A third-party company collects data from multiple platforms and publishers across the web.
• This data can include demographics, interests, online behavior, purchase intentions, and more. The company aggregates this information into large datasets.
• Other businesses then purchase or access the data to gain insights into wider audience behaviors or trends.

Although third-party data can help brands tap into new audiences, it’s less personalized than first- or zero-party data as it doesn’t come directly from customers.

Why is third-party data important?

Third-party data opens up a world of possibilities beyond your immediate customer base. The information enables you to:

• Reach new audiences you might not encounter otherwise
• Gain broader market insights
• Enhance your existing customer profiles with additional information
• Benchmark performance against competitors or industry standards

However, third-party data has its downfalls. The data you get might be less accurate and current than first-party data, and its use is increasingly scrutinized due to privacy concerns—people can’t consent to exactly how their information is used, as this depends on which businesses buy the dataset.

How to collect and use third-party data

Places to get third-party data include:

• Data marketplaces: Purchase data from reputable providers such as Acxiom, Oracle Data Cloud, or Nielsen
• Demand-side platforms (DSPs): Use advertising platforms that offer third-party data for audience targeting
• Social media platforms: Make use of the extensive user data available through platforms like Facebook or LinkedIn for ad targeting
• platforms (DMPs): Use tools that aggregate and analyze data from different sources
• Industry reports: While not individualized, these can provide useful sector-wide insights

Because of its more general nature, you probably won’t be able to use third-party data like you do first or zero-party data. You might instead use third-party data to:

• Target ads to audiences similar to your existing customers to expand your reach
• Add external data to your first-party day for an enriched view of your customers
• Understand the trends and consumer behaviors in your industry
• Improve your predictive models with more market data
• Get a peek into your competitors’ customer bases and strategies

While still valuable, businesses should be prepared to rely less on third-party data in the future. Browser changes and stricter consent requirements make it more difficult to collect and use this information. You’ll need to ensure your use of third-party complies with laws such as and .

If you do decide to purchase third-party data, it's good practice to have a clear privacy policy (on your app or website) that tells people exactly what you’re doing with it. Be aware, too, that not all data sources are reliable—cheap data can be inaccurate or outdated.

Ideally, you should use third-party data to supplement, not replace, your first- and zero-party data.

Essentially, second-party data is someone else’s first-party data you acquire through a direct partnership. Another company collects information about its own customers, which it agrees to share with you.

These partnerships should be meaningful and make sense to your brand. For instance, an airline might collaborate with a hotel chain or a company with a real estate platform. In these examples, the paired businesses are interested in similar customer bases: travelers or prospective housebuyers, respectively.

This data is typically more specific and relevant than third-party data, as it comes from a known source with a clear collection method. You can ensure the data aligns well with your needs and complies with privacy laws.

Why is second-party data important?

Second-party data offers a sweet spot between the reliability of first-party data and the scale of third-party data.

As with third-party data, you can use this information to expand your insights beyond your own customer base, but with added trustworthiness and reliability. Accessing these complementary audience segments enables you to tap into new, potentially underexplored markets more likely to be interested in your offerings.

Second-party data also enables beneficial partnerships in your industry or adjacent sectors. These collaborations could lead to exciting joint ventures, such as innovative products, services, or targeted campaigns.

How to collect and use second-party data

Second-party data can be accessed from many sources:

• Strategic partnerships: Form alliances with companies that have complementary (not competing) customer bases
• Data clean rooms: Use secure environments where partners can share and analyze data without exposing raw information
• Publisher collaborations: Work directly with media companies to access their audience data for advertising
• Industry groups: Join or create data-sharing groups within your sector to pool insights
• Data marketplaces: Some platforms now facilitate second-party data exchanges between companies

In terms of use, second-party data has similar applications to first- and third-party data. You might use it to personalize your services, expand into new markets, reach new audiences, or improve your predictive models.

Second-party data is also particularly valuable for opportunities in ways other data types might not. You can identify potential customers for your product or service using your partner's audience. As they’re in a similar or related area, these people are more likely to be relevant to your business and on board with what you’re selling.

As we face more challenges with third-party data, second-party data will become more widely used. It offers a balance of scale and that’s becoming increasingly attractive—but that doesn’t mean it should be used without caution.

Data agreements with your partners need to be clear. How will the information be used and shared? Are there any limitations? Just because you trust your partner doesn’t mean their data is sound, either—always verify their quality and collection methods.

As always, you’ll also need to ensure that all shared data adheres to relevant laws and regulations. Be upfront with your customers about your data-sharing practices, too.

How we collect and use people’s information is changing. Juggling the need for insightful data (that could genuinely help your customers) with user privacy has only become more complex.

Rules are evolving. Customers are more aware and cautious about what they share with companies. According to one survey, say they are more concerned than ever about privacy. Businesses must work even harder to protect sensitive data from potential threats.

Let’s dive into more of the challenges your company could come up against.

Evolving regulations

Keeping up with a patchwork of global privacy laws can be daunting. Each jurisdiction has its rules, including the and the CCPA in California.

These regulations often require explicit consent for data collection and give users the right to access or delete their data. Some even require data to be stored in a particular location, which may add costs to your operating budget. Staying compliant across borders is a constant challenge, especially for global businesses.

User consent and transparency

Obtaining genuine, informed consent is tricky. Users often click through consent forms without reading them, leading to questions about the validity of that consent.

You should explain your company’s data usage in simple terms while covering all your legal bases—a delicate balance. There’s also the risk of “consent fatigue,” where constant pop-ups annoy users and potentially drive them away.

Data minimization

The idea of collecting only “necessary data” goes against our common desire for more detailed, comprehensive analytics. Determining what’s essential for your business versus what’s just “nice to have” requires careful consideration. Over-collection violates privacy guidelines and increases liability if you ever experience a data breach.

Data security

As companies amass more data, they become bigger targets for cyberattacks. Protecting this information from breaches is an ongoing challenge. You’ll need to use encryption and access control and carry out regular security audits to safeguard your data, which can be costly and resource-intensive.

Third-party integrations

Many websites and apps rely on third-party tools for analytics, advertising, or functionality. Each integration potentially exposes your user data to another entity. You must vet each partner to ensure they adhere to your strict privacy standards.

User expectations vs. business needs

There’s often a disconnect between what users expect regarding privacy and what businesses need to operate properly. Bridging this gap without alienating customers or crippling your analytics capabilities is a delicate balancing act.

Cross-device tracking

Maintaining a cohesive user profile while respecting privacy becomes complicated as users switch between their devices. Techniques such as tracking fingerprints raise ethical questions, while less invasive methods may provide incomplete data.

Data retention and deletion

Deciding how long to keep data and ensuring it’s fully deleted when required is technically challenging. This is especially true in distributed systems or if you’ve shared data with partners.

Anonymization and re-identification

Even “anonymized” data can often be re-identified when combined with other datasets. Truly anonymizing your data while keeping its analytical value is difficult, especially if you still need to ensure it’s easy to draw insights from.

Ethical use of AI and machine learning

As analytics become more sophisticated, questions emerge about the ethical implications of modeling and automated decision-making. These systems, which rely heavily on user data, raise concerns about privacy, fairness, and accountability.

For instance, the algorithms you rely on could unintentionally reinforce harmful biases. The suggestions or insights systems provide could affect individuals’ lives if followed or acted on, so you must be prepared to be accountable for what they present if things go wrong. You should also be upfront about how your AI model generates these insights so users understand why certain suggestions occur.

While challenging, is more than just about compliance—it's a chance to build trust with your users. Companies that handle privacy well can even turn it into a competitive advantage, standing out in a market where data protection is increasingly valued by consumers.

This shift often begins by adopting a privacy-first mindset, which could include:

• Implementing privacy by design principles: Put privacy measures into your systems from the start
• Regularly auditing data collection and usage: Make sure your practices remain ethical and follow the most recent rules
• Investing in user education about data practices: Help customers understand how their data is handled
• Being transparent about data usage and value exchange: Openly communicate how data benefits both sides (e.g., to improve products or provide more relevant communications)
• Continuously updating your privacy policies and practices: Stay ahead of evolving regulations and what your customers expect

As we’ve explored, each type of data—from zero-party to third-party—has its place in your . The key is to use them wisely, with a careful eye on user trust and regulatory compliance.

helps you navigate this balance between and privacy. The platform is designed to help you get the most out of your first-party and zero-party data while upholding respect and privacy laws.

• Seamlessly integrate your digital properties to collect first-party data across and mobile platforms. See a holistic view of your users’ behavior without relying on third-party sources.

• Go beyond basic metrics with advanced analytics tools. Get deep insights into user journeys, retention, and conversion paths, all while using privacy-compliant data.

• Stay privacy compliant thanks to features including controls, anonymization options, and consent management .

• Incorporate machine learning responsibly. Forecast trends and using an ethically designed predictive analytics framework.

• Empower your entire organization with . Reduce the burden on your data team while maintaining proper access controls.

With the platform helping you confidently face modern data challenges, you can concentrate on what you do best: creating products and experiences your customers will love. Combine your data with our analytics to get insights into what’s working and where you could improve, ensuring you’re always one foot ahead of the competition.