By: Brian Mulderrig

Across the digital marketing landscape, targeting methodologies are undergoing a seismic shift. The era of third-party cookies is waning, spurred by heightened scrutiny over consumer privacy and regulatory mandates. Google’s (eventual) phase-out of third-party cookies further complicates the delivery of privacy-first, personalized ad experiences.

In response, the industry has pivoted. We are leaning heavily into first party (1P) data sets, with retail media networks experiencing exponential growth. Crucial solutions like RampID and UID 2.0 offer unique identifiers outside of traditional cookies, while contextual targeting solutions are experiencing a massive resurgence. These approaches are undoubtedly valuable & necessary, but it’s also essential to address the crux of the matter. Personalization drives performance. So how do we gather hard-to-infer information about potential customers in a privacy-friendly, non-intrusive manner? The answer may lie in a strategy my soon-to-be three-year-old practices frequently.

“Do you like looking for cool sticks?” A question posed by my son to anyone who enters our domain, which often opens the door to adventure in my household. His subsequent inquiry, “Do you want to dig for worms?” serves as a litmus test for potential companionship in his backyard escapades. If answers to these questions are positive, the proposed activities will ensue. If negative, a different activity will be recommended, or my son will pass on engaging this visitor entirely. He will tromp off into the woods behind our house alone or pose his questions to someone else. There’s no need for lengthy introductions or deep personal insights – he’s solely focused on shared interests and the prospect of fun, and he’s surprisingly quick to understand who his target audience is (i.e. grandpa) and double down on those individuals.

Enter zero-party data – information that is proactively shared between consumer and brand – a path forward that prioritizes transparency, consent and value exchange.

My son’s direct approach is one we’ve seen brands begin to adopt in their advertising strategies as our industry is increasingly awakening to the transformative potential of zero-party experiences. In fact, a recent Kantar study found that 48.2 percent of organizations believe that zero-party data is a key strategy for the industry in a cookieless world. The approach is backed by consumers as well. McKinsey has found that 71 percent of consumers expect companies to deliver personalized interactions and 76 percent get frustrated when this doesn’t happen. While IAB’s recent report found that 70 percent of consumers are willing to share their personal data to support advertising.

Zero-party data is typically collected in a variety of ways from seeded panels to on-site collection, but perhaps the most prolific increase in zero-party data sourcing has come from collection within the ads themselves, now commonly referred to as zero-party ads. Brands now have the ability to ask consumers questions about their preferences directly within their video or display ad experience, as my son does to any newcomer within our home.

Here’s what it can look like in action. A footwear brand wanted to determine brand sentiment and consumer preferences for their product lines. They decided to include a survey within their ad asking the question: “Which running shoe do you prefer?” From there, they were able to build audiences based on product lines and use AI to help them scale these audiences even further. As a result, they were able to identify millions of prospective customers and exclude those uninterested over the course of the campaign. This helped them enhance ad relevance and reduce wasted spend, all while also seeing a higher purchase intent rate and achievement against their benchmark media KPIs.

Not only can zero-party ads help brands drive top-line performance like in the example above, but they also equip brands and agencies with invaluable insights, enabling nimble campaign adjustments and fostering profound consumer connections. In navigating the evolving landscape of digital marketing, embracing zero-party ads promises to preserve consumer privacy and enhance the efficacy and resonance of advertising endeavors in a rapidly evolving ecosystem.

Zero-party ads represent a return to the fundamentals—a shift from passive data collection to active engagement, from intrusive targeting to genuine conversation. As we navigate the evolving terrain of digital marketing, let us heed the lessons of simplicity and sincerity imparted by backyard adventures brimming with “cool sticks.” Let us prioritize consumer empowerment, mutual respect, and authentic connections. Together, we can unlock the transformative power of zero-party ads and chart a course toward a more personalized, privacy-conscious future.