Zero-Party Data: Not a Silver Bullet, but a Competitive Edge

Third-party cookies are disappearing. Everyone knows that. The real conversation isn’t about whether brands should move beyond them, it's about who’s actually executing a viable alternative and who’s going to be left scrambling when traditional audience targeting collapses.

Zero-party data (ZPD) is often pitched as the answer to this problem. It’s not. At least, not in isolation. ZPD is only as valuable as the infrastructure around it. Brands collecting it without a clear activation strategy are just hoarding preference data with no practical way to use it.

So, what does practicality look like? Let’s get specific.

What’s the real value of Zero-Party Data?

ZPD, the data customers explicitly choose to share, solves a key problem: it eliminates guesswork. Instead of relying on inferred behavior, brands can work directly from self-declared preferences. That should make targeting and personalization more effective. But it only works if brands can scale it and match it to identity.

This is the part too many companies miss. Without a link to first-party identifiers, an email, a loyalty ID, a login, ZPD is useless for advertising. That’s why the real power play isn’t just collecting ZPD; it’s knowing where it fits into a larger data strategy.

Where are brands actually making it work?

Some brands have figured this out. The ones seeing real value from ZPD aren’t just gathering data, they’re connecting it to identity and making it actionable. Here’s where we’re seeing impact:

• Sephora: They don’t just collect customer preferences through Beauty Insider, they use that data to power AI-driven product recommendations, refine email targeting, and personalize in-app experiences. That’s ZPD linked to first-party identity and activated across multiple channels.
• L’Oréal: Their interactive beauty tools collect explicit product preferences, which feeds both direct-to-consumer personalization and ad targeting within retail media networks. Again, ZPD connected to a deterministic ID and used it strategically.
• MeUndies: Their onboarding process asks users about fit and style preferences, then uses that data to tailor not just product recommendations, but also email frequency and ad creative. It’s not just a collection exercise; it’s a way to drive retention and reduce churn.

The Activation Problem: Why ZPD alone won’t fix advertising

The biggest mistake I see? Brands collect ZPD without a plan for where it fits into the ad ecosystem. Right now, the only way to activate ZPD at scale is to match it to a cookieless identity solution:

• Google Ads & Privacy Sandbox: Needs Customer Match (email-based targeting) to activate ZPD.
• Meta & LinkedIn: Allow hashed CRM data uploads, ZPD must be linked to an email or phone number.
• Retail Media Networks (Amazon, Walmart, Target): ZPD works only within the walled garden, no portability.
• The Trade Desk & UID2: Supports email-based identity matching, making it one of the few scalable options for cookieless programmatic.
• CTV & Streaming (Hulu, Roku, YouTube TV): Login-based targeting makes ZPD valuable for creative personalization but not direct audience building.

Bottom line: If you’re not integrating ZPD into a larger identity strategy, it’s not a targeting solution, it’s just a customer survey.

How AI Turns ZPD from a Buzzword into an Advantage

AI personalization has always relied on behavioral data, but ZPD adds a direct intent signal that improves predictive accuracy. That’s the biggest untapped opportunity right now.

• Better AI Training Data: AI models can segment based on declared interests, not just inferred behaviors, which reduces reliance on black-box audience modeling.
• Dynamic Creative Optimization (DCO): ZPD gives AI a better input to generate relevant ad variations dynamically, improving engagement rates.
• Retention & Lifecycle Marketing: AI can predict churn and next-best actions with more accuracy when trained on explicit customer input.

This is where brands win or lose in the next phase of digital advertising. The brands that treat ZPD as an AI input, not just a database, will have the advantage.

Final Word: What needs to happen now

ZPD is valuable, but it’s not a standalone fix. The brands that will actually capitalize on the post-cookie era are the ones that:

1. Stop collecting ZPD without a plan. If it’s not tied to an identifier that can be matched in advertising, it’s just sitting there.
2. Invest in identity resolution. UID2, LiveRamp, Google Customer Match, without an activation strategy, ZPD is wasted.
3. Use AI to scale personalization. AI is only as good as the data it’s trained on. ZPD makes AI-driven marketing more precise, less reliant on guesswork.

What’s next? The phaseout of third-party cookies will expose which brands have a real data strategy and which have been reliant on ad-tech workarounds. ZPD isn’t the answer by itself, but paired with a first-party identity strategy and AI-powered activation, it’s a competitive advantage.

The real question isn’t who’s collecting zero-party data, it’s who’s actually activating it in a meaningful way.

For more insights from Brett Cella, VP of Martech Americas, read this article with Exchangewire on how to make zero-party data work for you.