Zero-Party Data is Driving Technology's Next Innovation Cycle
The entertainment sector is entering a transformational era, as opt-in user data and on-chain governance frameworks encode the role of fans in IP development.
By Straith Schreder, Chief Creative Officer of Candy Digital
Since the internet’s earliest days, we’ve used digital spaces for self-expression. But increasingly, being online feels fraught. 79% of global internet users believe that they have completely lost control over their personal data. Welcome to the digital identity crisis.
Over the next few years, new regulations like the EU’s General Data Protection Regulation and California’s Consumer Privacy Act will provide increased protections for users. New blockchain-based technologies will enable the ability to authenticate identity and assets at scale.
At the same time, these technologies will empower radical personalization: through zero-party data that allows people to opt in to experiences, participate meaningfully in media platforms, and see themselves represented in the franchises, communities and digital spaces they follow. With that, the balance of power will shift. As individuals, or as fan unions, users will have the ability to direct and drive IP—creating more value for the content they’re passionate about.
Now, a new wave of innovation is harnessing zero-party data to solve for privacy and personalization, unlocking exciting new opportunities for brands and consumers alike. Opt-in data and co-creativity is driving technology’s next growth cycle—as companies develop new products to identify users, create interoperable experiences, and launch new IP.
Zero-party data provides a new foundation for personalization
Understanding your customer base is key to ensuring product-market fit, and there are few methodologies that platforms use to generate insights. Broadly speaking, there are three types of data that are collected online. First-party data is observed behavioral data about a brand’s owned property, like site or app usage. Second-party data is first-party data that’s shared between two brands with user consent. Third-party data is data that’s obtained or purchased from external sources, like social media platforms.
Then, there’s zero-party data, which is information that users intentionally and proactively choose to share with a brand. It can include purchase intent, personal context, and information about how the brand wants to recognize them. As the regulatory environment evolves to better protect users, this category of data becomes critical. It also unlocks new insights.
With zero-party data, studios and brands don’t need to infer what their fans want. Fans tell them directly. This can solve today’s blind spots and data outages. And it can provide the foundation for more personalized experiences: a networked experience that reflects its users.
On-chain infrastructure creates a powerful lever for opt-in data
Today, third-party data collection faces new challenges, with regulation that enforces user protections and autonomy. But individuals are still open to sharing information with marketers. 66% of consumers say that they’re willing to distributing data to a brand if it provides additional value. This can come in the form of rewards, discounts, or loyalty points. Web3 offers marketers a powerful, durable infrastructure for this exchange, with a few key advantages:
Interoperability: With web2 experiences, rewards for opt in may be limited to specific brands. Web3 platforms allow for rewards programs to be used across an ecosystem of brands, by verifying a customer’s status in external brand communities, membership or loyalty programs.
Transparency: Blockchain-based distribution of rewards or loyalty status is transparent, and immutable. There’s no black box around points; a brand’s followers or community members can see the rules, activities, governance, and assets shared within the program.
Identity: Web3 allows for experiences and rewards to be linked to a user’s digital identity. Users fully control what they opt in to. At the same time, the experience delivered to them by the brand can be radically personalized: reflective of what they own and engage with.
Zero-party data can help entertainment brands better understand IRL behavior
From the store to the stadium, the way we connect with entertainment brands is often on the ground. By focusing on zero-party data, brands can position themselves as authentic stewards of the audience’s experience: ensuring that their products reflect user input and interest. Today, in sports, zero-party data is unlocking valuable new fan insights about how fans see the game.
Global sports ticketing alone was a 15.47BN business in 2022. But today, 80% of in-stadium tickets are dark for leagues like the MLB, because they don’t provide any additional information about or touchpoints with the superfans who watch their favorite teams live.
In 2022, MLB launched a ticketing program that rewards fans who attend games with digital commemorative tickets. 24% of all fans who entered the stadium with their mobile tickets also redeemed their complimentary commemorative digital ticket provided by Candy. In the 2023 Regular season, more than 41,000 fans have redeemed commemorative digital collectible tickets. The zero-party data collected from this digital touchpoint include new information about fan identity, behavior, their feedback on the game, favorite moments, and more. These invaluable insights, proactively shared by a highly engaged subset of fans, can inform the evolution of collectible design, merch, or even league rules; changing the way we experience the game.
Zero-party data can help brands launch new designs, and create new IP
Today’s consumers are motivated by personalization. Users are open to sharing information with brands, if it can create additional value for them. For fans of entertainment brands, seeing themselves represented in the stories they love, and recognized for their contribution in driving them forward, is a powerful lever. Here, the benefits of zero-party data provide a unique benefit that shouldn’t be overlooked by business leaders and investors.
In January, Nike’s Dot Swoosh platform invited communities to participate in the design of new Air Force 1s. Members of the platform built visual storyboards on Instagram; four individuals would be selected to collaborate directly with Nike designers to build a 1:1 virtual creation inspired by their work. Opt in data is powerful, because it can give form to new products, co-created with fans.
A web that looks more like you
The power of zero-party data is personal. The information that users choose to share provides a foundation for new insights based on explicit action, not just observation. With more control over their identity and experience across digital ecosystems, individuals will be able to participate in digital spaces that reflect and respond to their unique needs. The brands that will thrive in this new context are the ones that create new opportunities for fans to opt in, and create together.
About the author
Straith Schreder, Chief Creative Officer of Candy Digital
Straith Schreder is the Chief Creative Officer at Candy Digital, the go-to next-generation brand engagement platform, where she’s responsible for developing and producing breakthrough NFT experiences in collaboration with artists, institutions, and IP. Previously working at Candy, Straith was the Executive Creative Director of Palm NFT Studio a technology company that partnered with leading artists, creatives, IP owners, and entertainment companies to redefine fan engagement using NFTs. Straith has previously served as the Executive Creative Director for VICE Media Group and the VP of Creative Initiatives at BitTorrent, Inc, in addition to work with brands including Mozilla, Amazon Studios, Nike, and more.