A shift is happening, quickly. While people are adopting new digital habits, adding devices and channels to their everyday online activities, several data restrictions related to privacy concerns and regulations are being implemented or planned.
This challenge presents a unique opportunity for marketers to evolve their targeting and measurement framework to prepare for the cookie-less future. Before we get too far ahead of ourselves, let’s dive into why a world without cookies matters.
What is a cookie?
A cookie is a text file containing a small amount of data—such as web-browsing history, your location, IP address, and (sometimes) personal identification information—that websites use to identify you, exchanging your information between computer programs as you visit different sites.
Are cookies bad?
Cookies weren’t built with malicious intent. Instead, cookies help websites personalize content and provide a tailored experience based on your information. Cookies play an important role to ease users’ experiences while they are online, such as remembering what they placed in a shopping cart during a web session, even if they have not yet logged in.
Additionally, as consumers seek out more personalized experiences with the growth of platforms like Netflix and Amazon, marketers have used cookies to deliver on that ask.
But recently, with the enhanced focus on privacy and increased regulations, cookies have come to the forefront of the conversation. Through using cookies, third parties can access information stored about your browsing behavior, and they can use that information to profile and market to you.
What are third-party cookies?
Third-party cookies are cookies that are set by a website other than the one you are currently viewing. The purpose of third-party cookies is typically to collect data to determine advertising performance and to understand users better and allow marketers to serve more relevant ads.
Data privacy regulations
As data breaches occurred, consumers became wary of allowing third-party cookies to track their online activities. Next came the General Data Protection Regulation (GDPR) law in Europe, marking the turning point in how data privacy is regulated and requiring businesses to adjust how consumers opt into data collection.
In 2019, Mozilla’s Firefox browser announced it would block third-party cookies by default—asking consumers to opt in to cookie tracking if desired. Apple’s Safari browser soon followed in early 2020. And Google announced Chrome will also stop supporting third-party cookies beginning in 2022.
The California Consumer Protection Act (CCPA) went into effect on January 1, 2020, ushering in a new era of data privacy within the United States. Next, the California Privacy Rights Act (CPRA), which was voted on during the 2020 election and closely aligns with GDPR, will take effect on January 1, 2023. Both of these add protections to the consumer, allowing companies to target non-sensitive information instead of losing access to all personal information for marketing purposes.
What does this mean for marketing?
For years, we’ve relied on third-party cookies to track consumer behavior, target audiences with ads and personalized content, and measure marketing effectiveness. The new regulations will impact a brand’s ability to reach customers during a relevant marketing moment, in addition to impacting their ability to track the performance of digital ads.
While third-party cookies won’t be usable on Chrome, brands can continue gathering first-party data from their existing customers to more deeply understand their customers’ needs, preferences, and actions. Additionally, companies can leverage second-party data from publishers or retailers in the case of consumer goods brands. First- and second-party data will allow you to continue capturing insights and targeting audiences to sell your products and services.
Instead of relying on one identifier or profile, leading marketers and businesses are beginning to take an identity-centric-measurement approach and leveraging strategic partnerships across the marketing supply chain.
Identity-centric measurement involves using multiple platforms and walled gardens—such as TV exposures, affiliate clicks, Facebook ads, and website conversions—to connect the dots on user behaviors within these channels with customer activities once a customer opts in to provide data and identify themselves. Then, brands can turn those signals into activities with offline-based identity data to build a complete customer journey. Thus, marketers can apply consumer attributes and quantify each marketing engagement’s incremental impact on the buyer’s journey.
Marketers can also link offline identifiers—like address, phone number, or email address—with online activity to craft a durable, effective customer journey model. This merging of offline identity with online identity creates unified-marketing analytics, which provide insights for future advertisement targeting.
Now introducing data clean rooms
Data clean rooms are a digital environment where brands can understand the path customers may have followed to convert. Clean rooms leverage data—from walled gardens like Google, Facebook, and Amazon and publishers—to help brands learn the impact targeted ads had on conversion.
In the future, brands may use weather or U.S. Census data—combined with Google search patterns or Amazon shopping trends—to leverage real-time consumer insights in a data clean room to plan their campaign media strategy. By using a data clean room, customer data privacy and security remain intact.
What can marketers do now?
According to Merkle’s 2021 Customer Engagement Report, only 59% of marketers surveyed claim to have a very clear understanding of the impact of privacy-related restrictions on their systems and operations.
To begin to address the identity crisis marketing now faces, brands need to prioritize gathering first-party data from their customers. The first-party cookie isn’t going away and companies that invest in the technology of their owned sites can continue to leverage their direct customer insights for more targeted messaging and personalized experiences.
Next, businesses should invest in customer data platforms (CDPs), like Salesforce Customer 360 Audiences or Experian, and private-graph solutions, which link a single customer ID to customer data in many systems. For example, large identity graphs within a CDP can combine a first-party email ID with an address and connected TV (CTV) ID, allowing you to purchase a tailored ad on Hulu that matches the location, likes, and dislikes of your customer.
Finally, marketers need to refocus on contextual targeting, which means engaging consumers in the live-intent stage when they have landed on a publisher’s page after completing a search. Considering the intent of the consumer when they hit a publisher’s site allows you to serve up your brand’s most relevant ad in that moment.
Marketers will have to give up some level of control over targeting by trusting AI and automation offered by platforms that use their own first-party data to inform targeting and performance. Digital marketers will likely need to lean more into targeting automation offered by ad platforms, liked Facebook, Google, and Amazon because of the loss of other third-party signals that may inform targeting.
No one-size-fits-all solution
Our cookie-less future will not include a one-size-fits-all solution for everyone. Rather, brands who invest in the advertising technology and identity platforms that suit their needs will succeed in leading their industries in contextual targeting and personalized customer experiences.
Tracking, measuring, and targeting your customers across sites, screens, and channels aren’t going away. Partnering with an experienced media agency, like DEG, can help you tackle prioritizing first-party data collection and evaluate an identity solution that expands your abilities as third-party cookie support dwindles.
Searching for the right people to talk data identity to? Let’s chat.