Editor’s note: Liz March is the content marketing manager and digital research specialist at Similarweb. This is an edited version of an article that originally appeared under the title “When First-Party Data Isn’t Enough: Reasons to Look Elsewhere.”

Businesses go to great lengths to understand their customers, and for good reason. While first-party data can provide valuable insights, it isn’t always enough. There’s also a new kid on the block: zero-party data.

First-party data is defined as data that is collected directly from a company’s customers, website visitors or mobile app users. It’s collected and owned exclusively by the company that gathers it.

Second-party data is shared between two parties who have an existing relationship. It’s typically shared in exchange for a service or other value.

Third-party data is collected by an outside entity and sold to companies for marketing and advertising purposes. It’s often used to target ads and can be collected from various sources including online surveys and public records.

Zero-party data is intentionally and proactively shared by customers with companies in exchange for value. It’s usually obtained via opt-in surveys, quizzes and social media posts and can be used to personalize and enhance customer experiences.

First-party data is often the most valuable as it is company-specific and useful to draw insights into customer behaviors and preferences. It’s also data your competitors won’t have. However, second-party data comes into play for companies with limited access to their own customer data and need additional insights into target customer segments. If you want to enter a new market or even start a new business, you might not have relevant internal data sets to use and creating a first-party data strategy isn’t feasible nor realistic.

Let’s say you want to gain insights into consumers’ behavior and preferences, first-pa...