Why first-party data is the key to survival in a cookie-less world
Cookies are everywhere, and not just the kind with chocolate chips.
In digital speak, a “cookie” is a small piece of data stored by your browser when you visit a website. And not unlike Pepperidge Farm, who really wants to know how many people are consuming their soft-baked milk chocolate macadamias, most companies want to know what actions you are taking online, especially those that can lead to a sale. Third-party cookies are stored by a service, such as a digital agency or ad platform, that operates across multiple sites and marketers rely on them to track consumer actions so they can target them with ads.
To get the information they need quickly, many consumers click “Accept cookies” without fully realizing the repercussions of doing so. Brands have their data. And they’re more than willing to use it. But all of this is about to change with the demise of third-party cookies, also known as the cookie-less world, or the cookie apocalypse.
Browsers such as Firefox, Safari, and Microsoft Edge have already taken steps to block third-party cookies due to increasing privacy regulations, but the impact of a cookie-less world won’t really be felt until Google removes them from its Chrome browser, which is now set to happen by the end of 2024. (Google had previously announced a two-stage approach for phasing out third-party cookies to occur starting in late 2022 and finishing in late 2023.)
Here, we offer some background on the cookie apocalypse and how the shift to first-party data will be essential for targeting consumers through email and other communications.
Preparing for a cookie-less future
With the rise of mobile phones came a new way to market to consumers, contacting them with personalized offers and information through their smartphones. “Cookies” came about as a way to essentially flag the consumer’s data so that their preferences and patterns could be traced for the purpose of marketing specific offers that are relevant to their needs. However, a little question of privacy came up. If it sounds creepy to have advertisers track your every move on the internet through cookies, it is. That’s why the movement to get rid of “third-party cookies” has advertisers concerned about how they will survive when this valuable consumer lifeline goes dark.
According to Google’s latest “Privacy Sandbox” update:
This is good news for marketers because it gives them more time to prepare for a cookie-less future. Research indicates that 86% of marketing decision-makers rely on third-party cookies to some extent.
One of the most impactful strategies will be the shift to first-party cookies, or data that they collect from their own customers with permission, rather than from a third-party source.
It’s become endemic to the online searching experience to accept, deny, or ignore cookies messages when visiting a website for the first time, but that doesn’t mean users necessarily understand what they are agreeing to.
This is Infobip’s cookie disclosure message. Not all companies are as clear about how customer information is being used or about the permission-based nature of cookies.
Cookie messages take many different forms, but soon websites won’t be able to collect these little personal nuggets unless consumers give them the information directly. Welcome to the era of first-party data.
Cookies do have their benefits for users and brands alike. Every time a consumer puts something in their online shopping cart and returns to the cart weeks later, the item they were browsing is still there, thanks to cookies. Good for the consumer (they don’t have to search for the item again), and very good for the brand, which can then send emails to the consumer saying, “Hey Brianna, do you still want your navy-blue Birkenstocks?”
Regardless of the moral dilemma cookies present, the third-party kind is going away and advertisers will have no choice but to figure out how to obtain and use first-party data to continue the targeted, personalized promotions that consumers have come to expect.
Getting and using first-party data
The key to preparing for the cookie apocalypse is to start improving measures for first-party data collection now. Use all the resources at your disposal, including websites, apps, contact center, CRMs, ERPs, loyalty cards, payment systems, and more, to collect information from your existing consumers or prospects. This information is considered “first-party” data because you personally collect it through your brand’s own touchpoints.
Here are some examples of first-party data that will prove to be every marketer’s safe room during the cookie apocalypse.
Use data such as consumer visits, app engagements, payments, shopping history, and more to create profiles of your consumers that can result in better targeting. Retailers, for example, typically get first-party data, such as an email address or mobile phone number, from customers by simply asking at checkout. Other means include signing up for a newsletter, offering a discount or promo code, or any other incentive provided to the consumer through their website.
Consumers have come to expect some type of ongoing interaction with brands they do business with. The businesses that provide actual value to consumers through their direct communications are the ones more likely to create satisfied, repeat customers.
Solutions for the cookie apocalypse
According to a report by Deloitte, there is no need for marketers to panic about the cookie apocalypse.
Consumer data platforms provide a 360-degree view into your customers’ interactions in one place. Data from disparate sources serve to create a comprehensive customer profile that lets you target campaigns based on behavior. Data is automatically gathered from mobile devices, laptops, websites, events, apps – anywhere your consumers go is tracked and managed through the CDP, and stored in a single place, opening new opportunities to drive relationships.
Once you’ve created the treasure chest to store this valuable customer data, the next step is to create streamlined, thoughtful campaigns that target them based on their behavior and patterns. That’s where omnichannel messaging flows play a key role in keeping consumers engaged with your brand. With omnichannel flows, messages are sent throughout the journey so that brands can create personalized, targeted communications throughout the customer lifecycle.
Rather than having multiple sources of communication (i.e., email, voice, chat apps, messaging platforms) exist in siloes, automated omnichannel flows create cohesive, targeted messages that reach the consumer at the right time, over the right channel, to nurture the relationship. This is how companies create trust with consumers as well, as the consumer feels that the brand understands their needs and preferences.
One effective tactic that marketers are using to leverage their first-party data is automated push notifications that are triggered based on behavior or events. These quick, direct messages to customers via their mobile phones, laptops, or tablets are used to entice them through geo-targeting, flash sales, in-store sales, and more. Electronics retailer Citrus used a successful geo-targeted push notification strategy to entice customers into their store and saw a 35% conversion rate with increased store traffic.
Is your first-party cookie strategy fully baked?
Fortunately, there are solutions to help advertisers navigate the demise of third-party cookies. Consumer data platforms help you understand how your consumers are interacting with your product through various touchpoints. Personalization tactics based on customer behavior and demographics can be used to fuel mobile app messaging\ campaigns (including in-app and push notifications). These campaigns can be delivered through an omnichannel strategy that allows you to create effective consumer communications that are likely to resonate because they are more targeted.
The bottom line is, going cookieless is actually good for the consumer, albeit a bit disconcerting for advertisers until they fully embrace first-party data. It’s quite possible that as consumers come to understand that their privacy is being protected, they will come to trust the messages they receive in a cookie-less world more than what they’ve perceived as random at best, or stalking at worst, with third-party interventions.
Once we get past the transition, the opportunities for marketers who work on consolidating, tracking, and creating thoughtful strategies with their first-party data may even be better off in a cookie-less world, especially if they have the right systems in place to manage it.