With the announcement last year that major tech firms Google and Apple will be phasing out third-party cookies by the end of 2023, a seismic shift is set to take place in the way the marketing and advertising industries gather and re-purpose customer data.
For the better part of the last two decades, industry professionals have to a large extent relied on cookies to gather user data, track visitors, target advertising to specific audiences but also to improve overall user experience.
Here, Marketing Beat takes a closer look at what these changes will mean for the industry, and how it can adapt to them.
We also ask if there are ways in which the sector can turn this situation to its advantage, and what it can do differently in a post-cookie world.
What does the end of third-party cookies mean for the marketing and advertising industries?
One key reason for the demise of the third-party cookie is the general lack of transparency around how they collect data and the subsequent potential for that data to be abused by unscrupulous actors.
For Jamie Toulze, director of security – trust, privacy and compliance at marketing services firm Iterable, the upcoming changes will signal a shift in the existing status quo, putting the power firmly back into the hands of the user: “Consumers have grown more aware of privacy issues — and are beginning to respond. Now it’s incumbent on marketers to seek other routes to consumer satisfaction, go back to the basics, and work on building strong relationships based on trust.
“The marketers that will have the most success in a post-cookie world will be those who prioritise transparency and honesty, both when it comes to how data is collected and how it is used by a brand.”
Marketing growth expert Danny Denhard concurs, adding that he believes the changes could force the industry to improve user experiences: “I can see advertising improving and marketing becoming less about chasing the customer around the internet with poor and outdated retargeting, and instead being smarter about how it targets effectively.
“Companies will now have the opportunity to build out more personal data, selected by the customer, with more personalised identifiers.
He adds: “Some companies will feel pain with their over-reliance on third-party tools, but others will be in a good place to be more creative and build out their own offerings.”
How can the industry adapt to the upcoming changes?
Inevitably, the impending changes will mean that companies will need to collect their data in different ways – with a much greater emphasis on first or zero-party data – a point made by Toulze, who also indicates a need for greater personalisation of the user experience: “Brands should make an immediate shift towards data provided by users themselves — first or zero-party data. The time is now for brands to make a concerted effort to connect with their customers, by building experiences that are memorable and personal.
“Brands should have an “all channels on deck” mentality when it comes to marketing; if they can leverage the customer data currently at their disposal to develop journeys tailored to individual customer needs and preferences, they will build trust and loyalty with their users.”
Agreeing with the need for a general shift towards first-party data, Denhard also believes that more diverse strategies will be needed: “There are many advertising tools offering their own solutions, that combine large data sets and enable you to identify customers and show targeted ads.
“An experiment some are already considering is to leverage more traditional marketing, through sponsoring newsletters, working with creators like YouTubers and podcasters, looking at specific TV shows and radio options and where applicable, targeting in local campaigns with OOH and ATL.”
Are there ways in which the industry can benefit from the changes?
It would seem then that astute brands should prioritise personalisation, and whilst this means collecting less data, the data that they will have will be more detailed and valuable – essentially less can very much become more, as Denhard highlights, switched on businesses “can create superior targeting options, with better qualified CRM databases that offer more ownership over existing customer data and can be seamlessly updated.”
Touching on previous indications of a shift of power and the growing prevalence of zero-party data, he hints at a potential future where customers exchange data for tangible benefits: “many customers will expect a value exchange for offering their data and could provide updates to gain better discounts, better product offerings and potentially be part of limited drops.
“Zero party could be a game-changer however it is going to be difficult and not an option that will be a quick or easy turnaround.”
Echoing Denhard’s sentiments on the increasing value of highly specific first-party data, Toulze feels that the end of third-party cookies as whole might even benefit brands as “the data they will have on customers will be more accurate, and more effective when utilised.
She continues: “Marketers now have a real opportunity to forge connections with consumers. Using zero and first-party data transparently, marketers can go beyond mass sending discounts and poorly timed abandoned cart campaigns to create personalised experiences for consumers that bring customers joy, and drive value through increased loyalty.”
What other strategies can marketers use instead of third-party cookies?
Many in the industry have identified a greater investment in tech solutions alongside diversification and the creation of new platforms and strategies as key to moving from the over-reliance on third-party cookies.
For Denhard, the future will entail endless diversification as brands and businesses find tailored solutions that fit their needs and commercial strategies: “There are a number of ways in which tech can help marketers, such as using universal identifiers and digital fingerprinting to target their customers.
“Concentrating on other forms of marketing is always an option and many are moving back from over-personalised advertising that often has proved ineffectual.
“There will not be a one size fits all solution, many of the platforms will be creating numerous options and potentially collaborating in bundling advertising options.”
Toulze anticipates that brands will look to focus on improving user experiences by offering customers bespoke personalised journeys in exchange for freely given, valuable personal data: “A brand needs to do more than advertise based on their search history and profile analysis. Winning the business of the modern consumer is the result of relationships built from a track record of excellent quality, reliable service, and exceeded expectations.
“The key to brand success in this environment is investing in the data consumers want brands to have, the data that consumers give knowingly and willingly, and using that data to create timely and relevant messaging.”
Marketers now face an ongoing rush to adapt before the rules fully come into effect by the end of next year, for many this will prove a constant headache until then but in the long run may open up new and dynamic ways in which the industry can operate.
In any case, the average consumer’s online user experience is about to change significantly for the first time in decades, with the power placed firmly back in their hands.