New app launches through Apple hoping to win with ‘zero-party data’ when others haven’t

In the five-plus years since Forrester first coined the term “zero-party data” — defined as data that users intentionally share with a company — the phrase has been met with both eye rolls and enthusiasm, often depending on the audience. Proponents say it’s a more privacy-compliant way to collect and apply consumer data. Skeptics see it as too buzzy, too naive, too nebulous or too disingenuous.

John Roa, co-founder of Caden — a new app that lets users share a range of personal data in exchange for money — said he’s among the term’s skeptics. Although his startup hinges on the collection and use of zero-party data, he admits to not having a name for it yet.

“I do think that the definition and not the term is righteous,” Roa said. “I think it makes a lot of sense, I think it’s needed, [and] I think it’s here to stay. This concept of giving more complete consent and control across the board — not just for today but in general — is going to be a defining factor in the future of the internet to come.”

Caden arrived in Apple’s App Store this week and comes months after the company opened a waitlist for users in December that Roa said now has around 15,000 people. However, like similar apps that have so far failed to gain traction, the company’s long-term value for consumers and companies alike will depend on how many people download it and the types of personal data they allow it to access.

For starters, Caden is partnering with a number of major brands — such as Uber, Airbnb, Netflix, Amazon, Apple’s health kit and various banking and credit card providers — that will all allow Caden users to connect their accounts to the platform. How much money users can make by sharing their data is still to be determined. Part of it will depend on what data they share and how they’ll allow it to be used. Caden’s initial aim is to have users making $15 or $20 a month, but Roa said that could soon add up to $600 a year and possibly thousands of dollars down the road.

The plan is to roll out the app and expand its capabilities with a multi-tiered approach. Caden’s first tier involves aggregating user data and selling it to financial services firms as alternative data. Later this year and in early 2024, it’ll expand into the ad-tech space and let users consent to having their data pseudoanonymized for targeted ads across various platforms. A third tier for users will be “true KYC” — or know-your-customer data — that includes ways to opt-in for direct messages from brands based on identifiable information.

Applying users’ data varies based on the person it belongs to and the company looking to use it. Roa gave the example of his fiancee — an avid Uber user. In her case, Lyft might want to reach out with an offer based on her lifetime value as a customer. Another example: If Netflix knows someone is traveling to Morocco in a few weeks, it might suggest a documentary about the country ahead of their trip rather than making the viewer search for it.

“I can tell you how much money have you spent in your life on Amazon,” Roa said. “And do you tend to shop more when it’s raining outside or when it’s sunny, or on days that you exercise? How does that affect your retail behavior or your streaming behavior?”

The overall concept of Caden isn’t entirely novel. Over the past decade, other companies — such as OzoneAI, Startups Offer and Invisibly — have tried to find ways to let people share their personal data while earning or saving money. For example, last summer another startup called Pogo raised $14.7 million with a rewards-based model. Brave, the privacy-focused browser, lets users receive a portion of revenue back from the ads they see based on their first-party data. One startup, Swaypay, promises to connect brands with TikTok shoppers who like their products. And Swiss-based qiibee is a zero-party platform that received investment last year from the agency holding company Meet The People.

When asked what makes Caden different from these other competitors, Roa said the app makes it easy for users to connect their data and be as active or as passive as they want with it. Caden has also built a Knowledge graph — built by the former chief ontologist at IBM — that will help connect the dots on the different data types. Roa also mentioned Caden’s design — which he likened to “Instagram Stories-style experiences” — that lets people see charts and graphs of their data. The company also is exploring the idea of incorporating AI such as a possible ChatGPT-style component.

Control and transparency — to an extent

Although Caden touts its privacy controls, the app’s level of transparency only goes so far. For example, when asked which hedge funds will have access to Caden users’ data, the company declined to disclose any examples of companies using the service. When asked if users will get a full list of companies with access to their data, Roa said no, but that it will be a “very graceful way” of letting users manage their data collection and sharing preferences in ways they feel comfortable with.

“We won’t go to that granularity, just because it will be impossible to organize and to expect a user to manage,” Roa said. “We’re going to be more thoughtful on that as we build out that ad tech product.”

By acting as a mediator that sells data to advertisers, Caden isn’t using the term “zero-party data” in the same way Forrester originally intended it, noted Forrester analyst Stephanie Liu. Along with being skeptical of how Caden describes “zero-party data,” she added that there are also key questions about whether it can scale enough to appeal to both users and advertisers.

“The amount of control users have is actually negligible in the grand scheme of the advertising ecosystem, so the messaging about ‘control your data’ is disingenuous at best and misleading at worst,” Liu said.

Caden’s team has plenty of experience in the ad-tech space. Amarachi Miller, Caden’s chief product officer, previously spent several years on data teams at GroupM and ViacomCBS. Investors include Yahoo co-founder Jerry Yang, MediaLink Vice Chairman Wenda Harris Millard and former Ogilvy CEO Bill Gray. And while there is still uncertainty as to whether Caden can scale to a point of being viable, ongoing privacy changes across digital advertising and Caden’s consumer-facing product are what make investor Tyler Pietz “very bullish.”

“Third-party data, in some instances like where it is available, is still a necessary evil to lots of different types of businesses,” said Pietz, who is MediaMonks’ global evp of data. “So in that realm, everyone kind of holds their nose and says, ‘Alright we know that we need to have some mechanism for enriching these kinds of first-party IDs’ or whatever. But it’s not something that is going to create durable value for these businesses, because the value is going to continue to erode — it was never particularly great to begin with.”

Having hundreds of millions of users has long been the holy grail for social media platforms, but Roa said he doesn’t think Caden will necessarily need the same scale. In the first year, Roa said he hopes to have tens of thousands of users and at least “a couple million bucks” in annual recurring revenue. Although the company wouldn’t disclose pricing for its data, the aggregated and pseudo-anonymized tier will be similar to the current market. With ad tech, Miller said comparisons don’t yet exist, but some data could be in the zone of what loyalty card providers and credit card companies charge for targeting and measurement.

Whether agencies will begin using more zero-party data — however it’s defined — is also still a question. Sisi Zhang, evp of data science and analytics at Razorfish, said most clients aren’t leveraging it yet — partially because it’s not always distinguished from first-party data. She added that there are also questions to answer when it comes to demonstrating value and building trust with consumers.

Tyler McDaniel, vice president of product management at Epsilon, wasn’t familiar yet with Caden’s full strategy, but said he still sees the potential appeal of the proposition. Part of its success will hinge on the data’s quality and quantity along with how it’s collected and used.

“If you deliver bad data quality to brands, they are going to be in a position where they’re going to break that good experience with the customer because their data is not in good shape,” said McDaniel. “And so that’s the way we think about solving that problem, which is don’t let that happen … I’d have to see a little bit more understand what Caden’s doing but I think that’s a meaty problem.”

https://digiday.com/?p=496429

More in Media

How Time’s collectible covers make the case for a print comeback

Time’s bookazine business and collectible covers are helping maintain profitability in print at a time of decline.

The Trade Desk’s ‘premium internet’ shift stirs concerns among publishers over ad dollar allocation

The Trade Desk reassures that minimal authentication can still attract ad dollars, but many publishers remain skeptical of relying on UID 2.0 and ceding control over their data.

AI Briefing: Why WPP is adding Anthropic’s Claude models to its AI platform

Choosing which AI models to use has been a key factor for companies as they develop AI strategies for marketing and other applications.