Zero-Party Marketing for Consumer Brands
As zero-party data is the new life-blood, zero-party marketing is the new heart. Brands adapt or die. Let me explain:
First we'll rewind the clock back to 2020 with the advent of zero-party data. Zero-party data, as Forrester first defined it in 2020, is data that a customer "intentionally and proactively shares with a brand in exchange for some value." In contract, third party data is information gathered from outside sources, largely without the knowledge or express consent of the customer. Data regulations like the General Data Protection Regulation (GDPR) and the imminent death of third-party cookies are evaporating the value of non-consented consumer data. And more importantly, Gen Z, as the least trusting generation to date,
Cue zero-party data and the mad dash for consumer brands to collect it which has even spawned a cottage-industry of tools such as Octane AI to facilitate collection and personalization of their marketing campaigns for their customers.
Problem though: there's not much you can do with zero-party data if customers don't listen to you in the first place. Edelman's 2020 Brand Trust report found that...
- 99% of gen z's skip ads
- 42% say they tend not to trust the average American company
- 71% of Gen Z's globally agree that if they perceive a brand to be putting profit over people, they'll lose trust in that brand forever
- American's trust in traditional advertising weights in at 16%
But that's not to say young adults aren't open to learning about new products; they're just looking for trustworthy sources. "61% of Americans say they trust "'a person like me. Human beings - with personalities, emotions, and well, woulds are innately more trustworthy than faceless ads (The New Trust)."
Enter zero-party marketing.....
What is zero-party marketing?
Zero-party marketing (ZPM) is brand marketing driven by customers who are empowered to create their own brand narrative, and are incentivized to spread it.
Digging into this definition uncovers two key points:
- This marketing type only has value if it comes from a customer. This means it requires purchase authentication.
- It’s wholly incentive-based. This means it requires an exchange of value.
Zero-party marketing vs. its antecedents
- Word-of-mouth marketing (WOM): when a customer's interest in a company's product or service is reflected in their daily dialogues, resulting in free advertising for said company. Whereas WOM is purely organic, zero-party marketing is incentivized yielding far more predictable results.
- Influencer marketing: a type of social media marketing that uses the endorsements and product mentions from influencers to drive brand awareness, particularly in an effort to go viral. Whereas influencers may or may not be customers of the brands they're promoting, zero-party marketing is driven by authenticated customers yielding more credible advocacy.
What makes zero-party marketing here to stay?
The concept of incentivizing customers to proliferate a brand's message is the essence of modern marketing.
- Earning trust: Gone are the days of traditional marketing that was developed and run by core centralized teams, tightly controlling every aspect. "Today's gen z consumers are highly skeptical, quick to cancel, and turn to each other above all else." (The New Trust)
- Cultural relevance: TikTok spearheaded the need for brands to shift to democratic, creative, and collaborative expression. Trends catch fire out of nowhere and fade in a week tops. By putting the brand narrative in customers' hands, zero-party marketing accounts for this fluidity.
- Accelerating purchasing power: shifting marketing dollars into customer pockets couldn't be more timely as the economy continues to suffer
Ultimately, the importance of zero-party marketing will only continue to grow in the coming years. Brands will need to increasingly rely on their customers' advocacy—and that is only possible with zero-party marketing.