Cloudflare’s Permission-Based AI Scraping Policy Sets New Standard for Internet Data

Tension exists in modern advertising. Cambridge Analytica, GDPR, and numerous breaches have prompted a privacy whiplash against brands who were careless with data, and for good reason, but users are also demanding more and more personalized experiences — requiring nuanced data.

Even when advertisers are working with the best they can get, modern data collection is littered with problems. Advertisers are often left with inferred and piecemeal data, resulting in a mismatch that frustrates consumers.

Fortunately, there are solutions being developed, and one such innovation is known as zero party data (or ZPD). Zero party data puts the power back in the hands of consumers and enables businesses to collect more accurate data by fostering genuine, opt-in interactions.

Before we go into why zero party data will define advertising in the 21st century, let’s cover what kind of data we currently use.

The Three Types of Data Commonly Used Today

First Party Data

First party data is proprietary data collected by companies directly from its customers.

This most commonly includes email addresses, birthdays, addresses, purchase history, etc. This is the data most of us are familiar with. From Facebook Pixel data to sales spreadsheets, first party data is relied upon for day-to-day activities across modern businesses. It’s collected and owned by the business rather than the consumer.

First party data is where issues are most prominent (Equifax’s staggering failure comes to mind), and it’s the reason we have regulatory bodies in place such as the PCI Security Council. User data is sensitive, and the transition into a technology-first economy has not been kind to the average consumer’s privacy.

Second Party Data

Second party data is first party data sold to other companies.

It’s collected the same way as first party data, and then it’s packaged up and sold. A common example is email lists. If you’ve ever received a random email from a company, then your email was sold as second party data. Shared internet browser cookie data and product preferences are also popular second party data, and these data sets can either be consumer-specific or anonymous.

Third Party Data

Third party data are large data collections gathered by companies who are not the original collectors of that data.

Think inferred data, psychographics, income based on zip codes, etc.

For example, in fashion, there are data reports that forecast color trends for upcoming seasons. These reports are compiled by a company that takes the time to buy or license data from a wide variety of sources, compile them, and then present them in a useful way.

More generally, third party data usually covers demographic information like estimated household income, purchase preferences, etc., and companies use this data to educate their marketing efforts and build statistical models.

What Is Zero Party Data, and Why Is It So Exciting?

Zero party data is consumer-owned data given voluntarily by the user to brands in return for a benefit.

This could be anything from:

1. Intention to buy
2. Preferences on types of ads
3. Demographic information such as gender, age, interests, etc.
4. How they identify themselves

Zero party data hands the reigns of control back to the consumer by giving them ownership of their data. Brands and third party platforms own first party data, and users own zero party data. Businesses cannot package and sell zero party data the way they sell first party data.

While self-reported customer data like email addresses, birthdays, etc. would be considered first party data in the past, the expectations consumers have around that data has forced a new distinction between data types.

Zero party data is proactive and functions as an ongoing conversation between consumers and advertisers. It’s the difference between implied interest and explicit interest, and the best ZPD is constantly evolving.

Users offer valuable information in return for better personalization or via value exchange marketing, which is when users answer an ad or survey in return for something related to their experience. For example, getting a free audiobook chapter in return for filling out a sponsored survey is an example of a value exchange.

In a way, ZPD is simply the next step in the stairs of permission marketing pioneered by thought leaders like Seth Godin. Opt-ins are the pinnacle of permission, and zero party data is exclusively opt-in. We know humans are habitually materialistic — we won’t stop buying good products if presented with the opportunity, so why shouldn’t we use technology to make the relationship between consumers and brands better?

Today’s Flawed Data Ecosystem Needs Solutions Like Zero Party Data

Zero party data wouldn’t be nearly as interesting if there weren’t problems worth fixing today. The issues with first party data and modern data exchanges are many, and here are a few of them:

Consumers have little control over their data and aren’t compensated whatsoever.

In today’s digital advertising world, consumers have limited control over their data and aren’t compensated for it monetarily. Most data is collected through user consent to join a platform, e.g. Facebook. Once a user decides to join Facebook, they are subject to ads, and that is the price they pay for using the platform. But users don’t have any choice or real control over their data — they aren’t rewarded in any way apart from being interrupted.

Businesses are often working with outdated data and are fighting against a tide of anti-advertising behavior.

Second party and third party data can be horrendously out of date and inaccurate, and even the best guesses in targeting are based on databases of old data. If a user expressed purchase intent for a car and then purchased a car, then any auto dealer using that data to push car ads to them is wasting their money. They aren’t likely to purchase two vehicles in a short time frame.

Ad blockers and private browsers are also becoming more and more mainstream, and the more sophisticated and ubiquitous consumer privacy tech becomes, the worse it is for advertisers. The best solution is to foster a voluntary exchange of data, and the best way to do that is to give ownership back to the users.

Businesses have repeatedly proven themselves incapable of protecting consumer data.

With breach after major breach, consumers are only becoming more protective of their data. This is accelerating the trend of consumer control, and consumers should have more choice in whom they trust with their data.

What Else You Need to Know About Zero Party Data

Zero party data is better for businesses too.

Zero party data isn’t all about consumers. ZPD allows businesses to:

1. Collect more accurate, relevant, and immediate data from consumers.
2. Better match products to consumer interests.
3. Build more brand loyalty and ad engagement by seeking permission instead of interrupting.

A consumer offering voluntary information is the most accurate form of data collection and engagement, and that’s already proven through existing first party data trends.

Zero party data isn’t perfect, yet.

It’s worth noting that the zero party data ecosystem is young, and that brings challenges for brands. For one, it’s difficult to scale, although that’s being solved by technologies like blockchain and cryptocurrencies that enable permission-based engagement.

There are also some best practices businesses need to keep in mind when collecting ZPD. For example, if someone collects zero party data clumsily, a user may feel incentivized to say what they think the brand wants to hear instead of what the consumer actually thinks. This isn’t a problem unique to zero party data, but it can distort data integrity.

Zero party data functions on trust, which will act as a natural filter for bad faith actors.

An interesting positive consequence of widespread ZPD adoption is a sort of natural selection throughout digital businesses. Predatory businesses currently rely on second and third party data sources to target and take advantage of consumers. ZPD, on the contrary, is only rewarding to advertisers if they are trustworthy (or at the very least compelling) enough to benefit from your data. This will empower consumers to reward the businesses most deserving of their data and make bad-faith actors less effective.

Getting Started and Best Practices for Collecting ZPD

Zero party data will continue to grow in this decade and beyond, eventually becoming the standard solution for transferring data between brands and consumers. If you work for a business, you can start reaping the benefits of ZPD right now.

Here are a few ways your business can start using zero party data:

1. Integrate more value-exchange ads into your marketing strategy.

Look for publishing partnerships and ways to incorporate value-exchange ads into your marketing strategy. Try partnering with a SaaS company to offer an additional day in their free trial to users who complete your survey or engage with your video. Or perhaps you take part in the robust world of value-based ads in mobile gaming, where users are rewarded with in-game currency or items for interacting with brands.

You could also look at giving away additional content or bonuses on your site for more information (this is already very popular in the inbound marketing world), with the explicit caveat that their data will never be sold. Your options are wide.

2. Set up a cycle of giving and receiving to succeed with ZPD.

Users shouldn’t be placed into static buckets. As consumers buy and grow with a brand through ZPD, there is two-way communication which results in better buying experiences for customers and more revenue for brands. Find ways to incorporate a natural refreshing of user data, whether that’s through accruable incentives or multiple opportunities over time to update their data.

3. Use blockchain to grow zero party data at scale.

One roadblock for businesses is the ability to achieve scalability when it comes to zero party data. Setting up a value-exchange marketing campaign or survey seems feasible, but when it comes to big data decisions, zero party data often falls short. That’s true, but that can be overcome with technology like cryptocurrencies that enable consumers to monetize their data and engagement.

Imagine a mobile app that’s powered by a cryptocurrency that rewards consumers in return for interacting with sponsored content. Users can then exchange or use that currency to spend it on whatever they’d like — perhaps gift cards or physical items. This lets brands collect zero party data to better serve a target demographic while giving consumers a cash equivalent for engaging with brands they are genuinely interested in. It’s a win-win.

Permission.io is building the ideal zero party data ecosystem for users, developers, and brands.

See what we’re building.

4. Use ZPD in tandem with first party data for the best marketing results.

Until a full-fledged permission-based internet and app ecosystem is available, combining first party data and zero party data is the best approach for smart advertising. Serve ads based on the most amount of ZPD data as possible and always respect the user.

The Bottom Line on Zero Party Data

Zero party data is voluntary data given by a consumer to a brand, and it’s owned by the user. While the world of ZPD is still young, it has the potential to revolutionize our modern web advertising model and create a more personalized, equitable, and profitable experience for both consumers and businesses alike.

Join us as we revolutionize the internet as we know it.

Whether you’re a brand, a developer, or a user, we’re building a new ZPD-based data ecosystem that will compensate users for their data and fundamentally alter how the internet economy functions.

Get involved.

If you work in marketing, chances are you use first party data every single day. Traditionally referred to as the most valuable of all data types, we use first party data to retarget consumers online, deliver specific products based on purchase behavior, and much more.

In the data economy, the smarter you are with your data, the more you will succeed. We’d also argue that the more respectful and permission-based your data collection practices are, the better experience your users will have. This positive experience turns into goodwill, which turns into loyalty and ultimately results in more sales.

Before we go into the details on first party data and how to best use it, let’s briefly cover all four major data types marketers use.

Defining the Most Commonly Used Data Types

What Is First Party Data?

First party data is any data collected by companies on their own customers.

This means any CRM data, purchase history, or demographic information you have within your system. If it was requested or collected by your company and is exclusive to your company, then it’s first party data.

Businesses collect first party data with forms, surveys, pixels, shopping records, shipping addresses, and more. This data is extremely valuable to businesses because it offers direction on how to message existing customers while giving companies a blueprint for attracting more of their best customers.

First party data is also where many privacy issues arise, with major breaches leaking sensitive information around the internet ecosystem and generally undermining the privacy of users.

What Is Second Party Data?

Second party data is any first party data sold to other companies.

If you collect data from your customers, package it up, and then sell it to another company, then that first party data becomes second party data. Conversely, if you purchase email lists, demographic information, or purchase history data directly from the company that collected that data, then you have purchased second party data.

What Is Third Party Data?

Third party data is any data that you use or buy from a company that isn’t the original collector of that data.

Third-party data is most commonly packaged into large data sets built off of first party and second-party data. It commonly includes demographic data, psychographic data, bulk email lists, and other expansive data sets.

What Is Zero-Party Data?

Zero party data is any consumer-owned data that is given up voluntarily by a consumer to a company in return for some benefit.

Meet the new kid on the block, zero-party data. This could be notification of buyer intent, shopping preferences, product feedback, identifying information, or ad preferences.

Zero-party data is the future of advertising data because users own their data in a zero-party data relationship. In first party data, companies own the data they collect.

Zero-party data is made possible through opt-ins on both sides of the advertising equation. Certain blockchain currencies require that companies pay consumers for their data. Zero-party data champions user rights while better matching users with brands, resulting in a win-win relationship that is mutually beneficial for both parties.

While zero-party data isn’t yet widely adopted, big changes are coming to the internet that will make it mainstream.

The Power of First Party Data: How Marketers Use It

Again, first party data is data you collect on behaviors and actions taken across your website, app, and/or product. This includes information in CRM profiles, your social media data, any survey responses, any email marketing data, and any other data your company has based on your users’ actions.

This is important data to advertisers and allows them to advertise with specificity and purpose. Here are a few ways you can use first party data:

1. To Build Accurate Customer Profiles

Customer-relationship-management software (CRMs) like HubSpot, ActiveCampaign, Salesforce, and others are really just software designed to utilize first party data that your company collects. FPD gives companies the opportunity to build unique customer profiles, which allows you to use product and demographic-specific messaging while keeping track of sales conversations at the same time.

2. To Segment Your Customer Base

Segmentation is an incredibly important tool marketers use to create a sense of specificity. Specificity is simply targeted actions based on what you know about a customer. This could be behavior information such as pages they have viewed on your website, demographic information like gender, age, and occupation, or any other first party data that you have collected.

Any time you differentiate one set of customers from another, you are performing segmentation. If you haven’t taken the time to create buyer personas and use those to dictate your decisions around the first party data you have, then that’s your first step.

3. To Create Personalized Retargeting Campaigns

Platforms like Facebook, Adroll, Google Ads, and Pinterest allow you to deliver ads to the same people who have interacted with your profile or site. This isn’t possible without first party data. When you install a pixel on your site and track user behavior, you are collecting first party data.

4. To Build Email Automations

Email automations are built on triggers based on buying behavior, demographics, website data, and surveys — all of which are types of first party data. Whether you’re building in ActiveCampaign, Mailchimp, Drip, or WildMail, it’s all powered by FPD.

5. To Educate Your New Advertising Efforts

Marketers also use FPD to give them insight into potential customer pools. For example, if you know through surveys and collected information that your best customers are U.S.-based, 35-44 females interested in science and politics, and your company is about to expand in the U.K., your first campaign in that market should target 35-44 females interested in science and politics.

You can structure your entire U.K. marketing campaign around these facts, and while any new market is unique and deserves to be treated as such, FPD helps marketers make more educated decisions and refine their experiments.

6. To A/B Test Your Marketing Efforts

A/B testing occurs any time you compare the results of two assets over a time-bound period. Let’s say you had a new product that allowed users to put a physical picture inside an item of their choice, and you identified two major selling points: the ability to “capture a memory” and “personalization.”

You could construct two separate landing pages, one with “Collect Your Memories” as the headline and the other with ‘The Most Unique and Personalized Gift Ever!” By using tools to collect how often users click and buy — a type of FPD — you could figure out which headline is more profitable and use that information to improve your campaign.

7. To Collect Product Feedback

Requesting product feedback and reviews is another useful type of FPD. Because you are collecting information from your consumers, any recorded feedback or reviews fall under the umbrella of first party data. Marketers and companies can use this data to redesign their existing products, develop new sales, find inspiration for additional features, and more.

8. To Sell Your FPD to Other Companies

Again, any first party data that is sold becomes second party data, and some companies make all of their money this way. Social media companies do this most famously, but anytime you’ve heard of email lists being sold or purchase behavior information being given to complementary businesses, that’s an example of second party data.

And so much more…

First party data is a broad umbrella under which most major marketing ideas, functions, and best practices come from. It’s the first type of data most companies use, and it is often the most valuable, although zero-party data is set to become the next star-child.

5 Common Ways Businesses Collect First Party-Data

If you’re a business operating in any capacity, you’ve already collected some types of first party data — at the very least, the data collected when you make a sale. Here are a few of the most common ways businesses collect FPD:

1. Pixels

Pixels, or site tags, are bits of code that are dropped into the header of your website pages. Every time a user loads a particular page, there’s a bit of communication that happens between that code and whatever service the pixel or tag belongs to. This communication sends anonymous information about the user, including demographic information, the actions they took on the page, and more.

Pixels are most famously associated with Facebook and Google Ads, and they are essential to any business marketing themselves online. You can figure out how to get and install your Facebook pixel here, and you can learn more about Google remarketing tags here.

2. Email Captures

There are countless ways to collect email addresses, but the most common include:

1. Putting an email sign-up on key website pages like your homepage.
2. Collecting them in person.
3. Collecting them during an eCommerce or in-person checkout.
4. Collecting them as part of a rewards program.
5. Collecting them in return for a PDF or other type of free information.

All major website platforms support email captures and integrate with other major email service providers. Email service providers are the companies that act as a database for your emails and allow you to contact people through them. Major ESPs include:

1. Gmail
2. Outlook
3. HubSpot
4. ActiveCampaign
5. Drip
6. MailChimp

Your choice will depend on your needs, although we are partial toward Gmail for personal use and ActiveCampaign and Drip for businesses.

3. Point-of-Sale Systems (POS)

Your POS is what gives you the ability to accept payments. It is most often used in reference to the software that powers your terminal, although most POS systems include and communicate with an online payment gateway as well.

Each time a card is swiped, information about that customer is collected. Some of this information, like purchase amount, product purchased, etc. happens automatically, and other information like email addresses, preferences, etc. are collected voluntarily when requested by the business to the customer.

The best POS systems tie directly into your CRM, allowing you to use that data to educate your marketing decisions. For example, let’s say you have a product that expires every three months. You could export all of the customer email addresses who purchased three months ago, tag those addresses in your CRM or ESP, and send a targeted email to those customers with a discount because you know it’s around the time they should be purchasing again.

4. Customer Relationship Management Systems (CRM)

CRMs come in all types and variations, but they are fundamentally a way for you to centralize all the information you need to contact and interact with prospects and customers. CRMs usually include a combination of email sending and creation tools, SMS messaging tools, landing page tools, customer profile information, and email automation capabilities.

5. Manual Input via Call Centers and Employees

While first party data is much more efficient and effective when collected automatically, there is plenty of reason and opportunity to collect FPD when your team is working with your customers. Manual collection of FPD includes collecting email addresses at trade shows and writing down data from inbound sales calls.

Companies are always in pursuit of more FPD, and the best system for your company will inevitably change over time — look at data collection as a consistent effort. The cleaner, more refined, and more actionable your FPD, the better you will be to use it.

First Party Data: No Longer the Best for Marketers or Consumers

Here’s the issue. First party data is clearly one of the best tools marketers and companies have to grow their businesses, but it is a world away from perfect. For starters, users don’t own their data, meaning their personal information is constantly exploited by data-driven companies, and companies are stuck with patchwork data that doesn’t always integrate.

The solution? Give users back ownership of their data and use blockchain technology to pay users to interact with advertisers. This new model is a win-win for both users and advertisers because users have incentives to choose brands that they are genuinely interested in and advertisers eliminate ad spend and build loyalty and trust.

This gets to the heart of zero-party data — by creating an infrastructure that allows for opt-in ads to occur at scale, advertisers will have more complete, more active pools of users to engage. It eliminates so many of the headaches of targeting while giving users back control of their data that is currently harvested without their consent from internet barons like Google, Facebook, and Amazon.

Think it sounds too good to be true?

See how Permission is building that world right now.

The next generation of the internet is consumer-led and features the tokenization of data and other personal assets. In Web3, users – not big centralized platforms – have control over their data and take part in a platform’s upside.

The problems that digital advertisers have faced in Web2 – particularly, the inability to track users and access critical user data at scale due to privacy regulations – are solved by Web3 platforms that enable advertisers to compensate consumers with tokenized rewards for their engagement and consent to share data.

Download the Full Report Here

By providing consumers with a clear and equitable value exchange, brands earn loyalty and trust while opening the door to a new world of engagement opportunities.

The ability for brands to target consumers has never been easier given the ubiquity of the internet. However, a fragmented digital media ecosystem poses one set of business challenges for brands seeking to understand digital consumers, while a combination of privacy and data rights present a separate set of legal considerations to navigate. As a result, the $600 billion global digital advertising industry is ripe for disruption.

The days of consumers being analyzed and productized without any say in the matter are coming to an end. In the evolving digital landscape, collection and monetization of data by the largest consumer-facing platforms can no longer be inferred, it must be declared.

The new data economy unfolding is consumer-centric and requires permission for brands to participate.

While there is no single element driving this paradigm shift, the Web3 ethos of transparency, trust and ownership may be attributed to blockchain-based protocols. These protocols, known as smart contracts, enable a variety of engagement and transactions between consumers and brands in the real and digital worlds.

The Internet has evolved from viewing and authoring to owning.

The dial-up days of Web1 gave way to Web2 tech giants that harvested and monetized consumer data without their knowledge or consent. The arrival of Web3 represents a power shift from centralized enterprise technology vendors to decentralized, blockchain-based platforms that give control to the data owner: the consumer.

Consumer data: from EXPLOITATION to OWNERSHIP

As the saying goes, “if something is free, you are the product.”

Freemium Web2 business models made popular by Google, Meta (formerly Facebook) and other consumer-facing platforms generate billions in ad revenue. Consumers agree to allow these big tech vendors to collect, analyze and monetize their data in exchange for the privilege to use their platforms.

The advent of blockchain technology has opened the door for peer-to-peer transactions of digital assets, such as Bitcoin, non-fungible tokens (NFTs) and other cryptocurrencies.

While this itself is transformative, the ability for consumers to take greater agency/ownership of their data, including the ability to earn cryptocurrency rewards by sharing their attention and data with brands, enables a paradigm shift.

New solutions for a cookieless world

To highlight the significance of third party cookies, consider the following survey from Innovid: How important are 3rd party cookies for your current marketing strategy?

How will brands adjust as cookies crumble?

While first party cookies provide a more reliable means for marketers to understand consumer behavior, it is still limiting as the consumer is still unknown. Obtaining personally identifiable information (PII) such as name and/or email address is the ultimate goal for brands that seek ongoing and authentic one-to-one engagement with consumers.

Marketers will need to explore new ways to build one-to-one relationships with consumers en route to acquiring PII. Otherwise, CMOs and their agency partners will rely even more heavily on the Web2 consumer platforms that have become data overlords that rent audiences for advertising, sharing minimal campaign insights. While rent-to-own audience options would be ideal for brands, this is not feasible given Web2 business models and data privacy laws.

Zero-party data to the rescue

Understanding consumer behavior is paramount to a brand’s ability to deliver relevant, timely messaging. This is where the value proposition of a zero-party data platform becomes interesting for marketers in a cookieless world – imagine an opt-in rewards program that connects brands with consumers where time/attention are exchanged for a micropayment. The brand is able to tell its story to a qualified audience that has given consent to share information such as name and email. This quid-pro–quo is how zero-party data works: an equitable value exchange between consumers and brands.

Without the crutch of 3rd party data available for tracking, analysis and segmentation, brands will need to consider alternative means to obtain zero-party data.

If brands provide clear messaging and value exchange, consumers will share their data.

History tells us that consumers love free things (even if they are the product) as well as discounts. In addition to free or discounted items, consumers are also receptive to sharing data if it enables personalized or bespoke experiences. By leveraging zero-party audience platforms, brands can leverage one or more of these aspects to earn trust and attain fresh, fully-permissioned zero-party data.

To highlight how receptive consumers are when it comes to receiving something in return for their data, consider the following from Cheetah Digital:

Despite consumer interest, marketer knowledge and adoption of zero-party data is still in its infancy (stats below also from Cheetah Digital):

The value proposition and interest in zero-party data will accelerate as a cookie-free world becomes a reality. Investments in consent-based consumer platforms will become table stakes for brands that seek to remain relevant and maintain growth.

With proper data, permission, and orchestration, a brand can deliver an improved – or ideally- exceptional customer experience (CX). Per McKinsey, cookie degradation means brands will be pressed to earn consumer trust through compelling CX:

“The most prepared advertisers we studied are designing consumer experiences in which consumers actively consent to sharing data (for instance, transparency on data collected, visibility into value exchange, data collection seamlessly embedded into user experience). Indeed, experiences that are valuable to consumers tend to generate data as a byproduct.”

Brand touchpoints through micropayments

The ability to conduct financial transactions through ecommerce and payment platforms has been around for nearly two decades. While the definition of a micropayment varies (under $1 to $12), latency and cost factors have largely stymied mainstream use. As cryptocurrency adoption accelerates, retailers are accepting a variety of digital currencies as payment.

The list of notable companies accepting crypto payments is diverse, including: Starbucks, Home Depot, Overstock.com, Whole Foods, AT&T, DISH Network, AMC Theatres, Twitch (owned by Amazon) and more.

The ability to accept crypto payments extends beyond the largest retailers as 36% of small to medium businesses in the United States accept some form of crypto.

Serving as the backbone for credit and debit transactions, global payment processors such as Visa, Mastercard and Paypal are getting on board the Web3 bandwagon by supporting crypto, including NFTs.

During the 2022 Financial Technology Conference, Cuy Sheffield, head of crypto at Visa highlighted the NFT opportunity:

“Technology behind non-fungible tokens (NFTs), which are designed to be digital representations of real-world objects, could be set to strengthen the speed of commerce and therefore serve an important catalyst for the entire payments ecosystem.”

Financial institutions are also creating crypto-related products and services for clients. For example, Goldman Sachs supports Bitcoin-based loans and re-established a cryptocurrency trading desk, while peer Fidelity Investments allows clients to allocate Bitcoin to their 401K plans.

The above is interesting for brands and marketers as it means consumers are utilizing cryptocurrency in a variety of ways. Forward-thinking CMOs who seek innovative ways to drive digital engagement have a treasure trove of opportunities in Web3.

Web3 adds liquidity to loyalty rewards programs

Brands such as Marriott, Southwest Airlines and American Express have established industry-leading loyalty rewards programs. The value proposition of offering consumers perks for continued patronage is logical but requires significant resources. Facilitating loyalty rewards requires human capital and technological resources outside the means of many organizations. Perhaps the biggest hurdle loyalty programs face: liquidity constraints.

Blockchain-based rewards (e.g., NFTs or tokens) address multiple points of friction, including standard rewards programs that typically lock a consumer into that brand’s ecosystem. From a liquidity perspective, tokenized rewards can be transferred from one wallet (i.e., consumer) to another or used for a variety of purposes. This differs from rewards programs that limit ownership and site-specific use cases. In this vein, a universal rewards token (such as Permission’s ASK) expands liquidity exponentially, whereby a consumer is able to earn and use rewards across multiple brands.

Even during market downturns, technological adoption can accelerate

As we learned from the Web1 dot com bubble, not all companies survive market downturns, especially those without sufficient funding or sound business models. Adoption of blockchain and cryptocurrencies will continue fueling development of Web3 despite any “crypto winter.” Similar to the dot com bubble era, platforms that address market needs will prosper, while those without utility will fall to the wayside.

In the timeline below, adoption of the internet (1990-1998) and crypto (2014-2022) follow similar trajectories to reach 100 million users over an eight year period. While the dot com bubble in 2000 disrupted and bankrupted many online businesses, consumer internet adoption accelerated. By the end of 2003 – just three years after the beginning of the dot com crash – over 700 million consumers (11% of the global population) were online. If crypto adoption follows a similar pattern (assuming 2022 is a “bubble”) we can anticipate that by 2025/2026, crypto will experience widespread adoption.

Brands drive Web3 adoption and engagement through tokens and NFTs

Brands are also ramping up investments in crypto rewards, largely through non-fungible tokens (NFTs) and development of virtual worlds in the metaverse (e.g. Decentraland, Sandbox). For example, the world’s largest brewer and software company, as well as iconic CPG and lifestyle brands, are investing in solutions that enable next-generation brand engagement.

Established in 1936, Anheuser-Busch minted 1,936 NFTs to commemorate its foray into its virtual world, dubbed Budverse. Out of the lot, 1900 Core Heritage NFTs were minted ($99 each) and 36 NFTs were part of the Gold Heritage ($999 each). The NFTs represent different designs and vintages with a company press release stating each collectible is a “key to Budverse and can unlock exclusive benefits, rewards, and surprises.”

Other brands investing in Web3 include:

1. Microsoft (Activision-Blizzard)
2. Nike
3. Luxury brands (e.g. Louis Vuitton, Burberry, Gucci)
4. Coca-Cola

Smart contract protocols embedded in NFTs make them a powerful tool for brands to drive consumer engagement. In addition to artwork and collectibles, an NFT can serve as a digital key — opening the door for exclusive experiences in real life (IRL), online or in the metaverse.

Web3 is a team effort

Advertising agencies who have long acted as shepherds for brands are doing their part to prepare clients for the next iteration of the internet. The largest agency holding companies (e.g., WPP, Publicis, Dentsu) and independent agencies are acquiring boutiques, including the addition of executive avatars to deliver deeper digital experiences for clients. In addition to traditional media agencies, IT consultancies (e.g., Accenture, Deloitte Digital) are making moves to participate in Web3.

Web3 is a work in progress; however, the world’s leading brands, technologists and agencies are collaborating to build what will result in a more decentralized, consumer-centric internet. Blurring of real and digital worlds will accelerate, creating new revenue streams in the data economy. Instead of big tech companies dictating how, where, and when consumer data is collected and monetized, consumers are at the helm in the Web3 data economy.

Marketers seeking alternatives to audience rentals from big tech data oligarchs should consider joining the Web3 movement. Blockchain-based solutions open the door for new types of value exchange and engagement between brands and consumers. By enabling marketers to offer tokenized rewards, Permission provides the bridge to Web3 for consumers and brands to interact in a transparent, mutually beneficial way.

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In today's crowded digital marketplace, brands are constantly searching for ways to stand out and build lasting relationships with consumers.

The most successful brands know that the key to sustainable growth lies in building trust and focusing on long-term customer value. One of the most effective ways to achieve this is by investing in a proprietary opt-in audience.

Unlike broad, impersonal approaches on Big Tech platforms or programmatic channels, an opt-in audience offers a higher ROI by ensuring that your communications reach people who genuinely want to hear from you. This strategy not only strengthens consumer trust through verified, permissioned data but also positions your brand for future success by focusing on lifetime value rather than just transactions. 

Here’s why making this investment is essential for your brand’s long-term growth.

What is an Opt-in Audience?

Opt-in audiences are those who have explicitly consented to receive communications from you.  For example, when a consumer visits your website and provides their email address specifically for receiving newsletters, they are actively choosing to engage with your brand.

This approach not only ensures compliance with data privacy regulations but also helps build trust with your audience. 

By creating opt-in audiences, brands benefit from stronger, long-term relationships that generate a higher ROI. Additionally, this method offers the highest level of transparency regarding data practices, often exceeding regulatory requirements.

Brands Can Earn More Trust From Opt-In Audiences

Opt-in strategies require explicit consent from individuals, whereas opt-out strategies force consumers to say they don't want to receive communications from a brand.

Imagine you're a consumer who wants to create an account on a website. If the company that owns the website takes an opt-in approach, you might need to actively click buttons to receive newsletters, promotional emails, and other communications. If the company takes an opt-out approach, creating an account would automatically sign you up for those messages unless you take action to opt out of receiving them.

Opt-out options are seen as the bare minimum companies can offer. Opt-in takes a significant step toward data privacy and shows that the business respects its customers' choices.

Most companies struggle to earn consumer trust. People have been bombarded by spam for so long that they've become wary of unrequested communication. When you ask permission, though, you put the consumer in control. That makes it much easier for brands to build trusting relationships that last for years. You get more than a few transactions. You get a lifetime customer who fuels ongoing success.

Data Privacy Compliance: Why It's Essential

Data privacy regulations vary significantly from region to region. The European Union, for example, has some of the strictest data privacy laws. The EU's General Data Protection Regulation (GDPR) requires companies to give consumers genuine choices about what data to share and what communications to receive. As a result, any company targeting European Union audiences must adopt opt-in strategies to ensure compliance.

While the United States has traditionally allowed companies to use opt-out strategies, this is changing. States like California, with its California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), are now enacting opt-in requirements for certain types of data processing. These developments signal a shift toward stricter data privacy practices in the U.S., making it increasingly important for companies to consider opt-in strategies, not just to meet current regulations but to stay ahead of evolving laws.

Despite regulatory differences between jurisdictions, it's generally a good idea for companies to ask for permission instead of assuming they have it. This approach helps ensure that brands align with regulations. It also prepares growing businesses for connecting with EU consumers while safeguarding them from stricter data privacy regulations that other areas might adopt in the future.

Building Trust Through Privacy Compliance

Opt-in consent also puts consumers at ease and creates opportunities for brands to build more trust with customers. This point has become increasingly important over the last few years. A survey from Cisco shows that 74% of consumers agreed with the statement "I believe the way a company treats my personal data is indicative of the way it views me as a customer."

Additionally, young people (18 to 24) are seven times more likely to exercise their data privacy rights than consumers 75 and older. Adopting strong opt-in consent plans now positions brands for future success as younger consumers gain more wealth.

If you use opt-in marketing, you demonstrate to consumers that your brand takes privacy and consent seriously. It's often the first step to building trust with your audience.

Additionally, taking an opt-in approach helps you create a permissioned, proprietary audience that's unlike anything big lead-generation solutions can offer. Instead of sending mass messages to people who don't care, you get to target customers who truly want to engage with your brand.

Of course, trust is always difficult to build, even when you choose an opt-in strategy. Rewards can play a critical role in convincing people to take a small risk. That's why it makes sense to use reward services like Permission. With it, you can give customers a gentle nudge that encourages them to opt in for future correspondences.

Strategies for Investing in an Opt-In Audience

How can you build an opt-in audience that trusts your brand to protect their privacy rights? You can get started with the following strategies.

Transparent Data Collection

Data transparency relies on telling consumers how you collect their data, what you plan to do with it, and asking for their explicit consent. From an opt-in perspective, you inform people and ask for permission to collect and use their information. 

For example, imagine offering a personalized shopping experience through a brief survey. The survey asks users about their age, location, preferences, such as favorite product categories, preferred shopping times, and specific interests like upcoming promotions or new product launches.

By participating, users voluntarily share their data, knowing exactly how their information will be used—to receive tailored offers, relevant content, and updates on promotions they care about. The brand explicitly states that this data will only be used to enhance the user’s experience and will not be shared.

This approach not only respects the user’s choices but also builds trust by making the data exchange process clear and beneficial to the consumer.

Communicate Privacy Policies Effectively

Best practices for communicating privacy policies include:

• Explaining specifically what types of data you collect from customers
• Telling consumers how you will use their data
• Using plain, straightforward language the average person can understand

Not surprisingly, it's best to take an opt-in approach that doesn't assume consumers give you permission to use their data.

Rewards as Consent-Capture Mechanisms

A rewards program can give something back to consumers who opt in to receive communications or let you collect data.

For example, Permission gives ASK tokens to people who choose to participate in marketing and advertising programs. Interacting with an advertisement rewards the user with digital currency they can redeem for gift cards, physical items, and other rewards.

Since users own their data, it only makes sense that brands should reward people who choose to share it.

The Long-Term Benefits of an Opt-In Audience

Cultivating an opt-in audience can lead to long-term benefits for brands. Some common benefits include:

• Increased trust that enhances your brand's reputation, which attracts more customers and helps generate loyalty
• Higher engagement rates (such as opens and click-throughs) because your audience has intentionally chosen to interact with your branded materials
• Better ROIs from targeting focused audiences that want to interact with your business, making them more likely to spend money on your products and services

Using Rewards to Cultivate an Opt-In Audience

Pivoting to an opt-in strategy creates opportunities to grow trusting relationships with consumers. Ideally, that leads to increased brand loyalty, higher engagement rates, and strong ROIs. 

Want to learn more about how you can encourage consumers to join your opt-in audience? Get started with Permission to activate your opt-in strategy and boost engagement.