With all the talk of parties and cookies, what do these terms mean?

You’ve heard us talk about third-party cookies and their imminent demise. (If you haven’t, check out our article here).

We know that Google has announced that by the end of 2023, it will no longer allow third-party cookies in Chrome.

But it occurred to us. With all this talk about first-party, third-party, and now zero-party–are we all on the same page here? Does everyone know what these terms even mean?

Not sure? Here’s a quick primer written in layman’s terms.

First, a quick history

Cookies were created back in the early days of the Internet by web developers who wanted to figure out ways to track people and their behavior online. Originally, this was done with user experience improvement in mind, but quickly, advertisers figured out how to use cookies to target and market to Internet users. Google, with their Privacy Sandbox initiative, has announced that they will not allow third party cookies in order to better protect people’s privacy online.

What’s a cookie?

It’s a little snippet of data placed on a person’s computer by that person’s web browser. Google Chrome, Internet Explorer and Firefox are all examples of web browsers. Cookies can be used to remember a person’s login data so they don’t have to remember their password for every site and log back in every time they check their email, and cookies can also be used to give advertisers information about users so that they target only the people who might find a particular product or service to be useful. The kind of cookie really comes down to how it’s used and who owns the data, which is where the “party” term comes in.

First-party data

First party data is data that a company collects directly from a user. In recent years, you may have seen an increase of banners that say something like, “This website uses cookies. in order to use this website, you must consent to have your data to be stored and used?”, and often, you have to click “Yes” before you can continue on the site. First party data is comprised of analytics that are tracked by a website after observing your behavior on that website. Unless a company and/or website explicitly says they share your data, that company should hold that data securely. In addition, first party data is considered to be of high quality, because it has been collected directly from the source (You).

Second-party data

Second party data is data that someone else collected directly from the source and shared (or sold) with you. There are many entities that sell second party data, such as credit companies and even social media platforms.

Third-party data

Third party data comes from outside sources that aggregate data, pulling it from many different sources. These third party data providers aggregate the data, categorizing users into groups based on their behavior, interests, and demographics. Type of information included in this data will vary from provider to provider, as will the quality (verity) of that data.

Zero-party data

It’s the newest “party” on the scene. Zero party data is data that a publisher receives directly from their users as part of a clear value exchange. For example, people often give a company information like their address and phone number in order to enter a sweepstakes. That’s zero-party data. What distinguishes zero-party data from first-party data is the “clear value exchange”. Zero party data is collected by a direct solicitation from a website or publisher to their users, with those users freely giving information about themselves with the knowledge they will get something in return.

What is the difference between zero-party data and first-party data?

While nowadays, most people click that “accept” box when going onto a website, first-party data tracks how users behave on a website via analytics, giving first-party data holders insights about their behavior. Zero-party data is data that is self-identified by a user.

Here’s a real-world example. Person A goes to Websiite.com to read more about a specific topic. Upon arrival, they get a pop-up that says, “This website uses cookies. In order to use our website, you must accept cookies. Do you accept?” Person A clicks yes. Then, after reading the blog, they see that there’s more information they’d like on the topic, but in order to read it, they must enter their email address.

In this example, any insights gained as to how the person behaved once on the site such as clicks, what order they read the articles, time spent on each article would all be considered first-party data. Person A’s email address would be considered zero-party data.