Marketers have been friends with third-party cookies since they came onto the scene in 1994.
What are cookies?
Cookies are text files with small pieces of data (like a username and password) that uniquely identify you to servers so the sites you visit know who you are and which information to serve you.
A Bittersweet Goodbye
Marketers have long had to hold the growing tension between personal privacy and the ability to gather data and glean insights that are essential to doing their jobs well in competitive, crowded spaces with new audiences.
They need to be able to track behavior and target their paid campaigns based upon external databases (i.e. targeting by the “interests” or demographic options Facebook provides).
Most marketers are as annoyed as anyone else when they’re served spam or find themselves targeted by a company’s advertising they didn’t directly opt-in to.
While the end of cookies is a personal relief because they know their data will be safer, there exists a real, understandable fear that they’ll lose efficacy in results.
How do marketers use third-party cookies?
Marketers use third-party cookies to access data that gives them insights into how to reach prospects.
It helps them supplement existing data, build new audiences, and segment those audiences for better targeting. Plus, it helps them craft campaigns and demonstrate ROI.
So, what’s changing?
Due to changing user expectations about privacy and emerging regulations, this vexing guest is picking up stakes and moving on.
The EU’s General Data Protection Regulation – GDPR – is aggressive and has active cases against all the big names – Amazon, Google, and most recently, Facebook.
The U.S. has historically been less concerned about privacy, with only three states (California, Colorado, and Virginia) having comprehensive data privacy protection laws.
But that’s changing.
Big Shifts in Tech Giant Privacy Policies
In response to these pressures and a morphing, sophisticated advertising tech landscape, Google is doing away with cookies by the end of 2023.
And Apple’s well-publicized privacy crusade made big gains in 2021 with the iOS 14.5 app tracking changes.
But don’t believe everything you read…
It’s good to be leary of these seemingly privacy advocacy moves and to pay attention to who benefits. After all, Apple can still track iPhone users’ activity, just not at the browser level.
And Google’s “privacy sandbox”, an initiative that has open standards for tracking users while protecting their privacy, may not offer the safeguards privacy advocates long for.
What should marketers do?
We understand the dilemma marketers face. While it may be a bittersweet ending, you can keep calm and prepare today with these three simple steps to make the transition seamless:
1. Understand the value of third-party cookie data in your campaigns.
2. Implement tools to acquire first-party data tastefully.
3. Establish a plan to use first-party data.
Not All Data Is Created Equal
There is data, and then there is DATA.
What is first-party data?
If we held the data Olympics, first-party data would always medal in gold.
It’s most prized because it’s information you’ve collected yourself about your customers through lead gen systems (say, at trade shows, through online forms, email subscriptions, etc.) and own.
You can then use this data (such as purchase history, social media, and web interactions) freely to develop highly targeted content, ads, and interactions.
What is second-party data?
Second-party data is a silver medalist. Essentially, it’s someone else’s first-party data you can purchase. It’s qualified, and it may help you reach more prospects. But still, it’s not yours.
What is third-party data?
Coming in last place is third-party data. Anyone can aggregate, sell, or buy it, and it’s hard to validate because the seller doesn’t have a direct relationship with the customer.
Third-Party Cookie Data Isn’t Evil – It’s Just Incomplete
When third-party cookies disappear – which isn’t happening overnight – marketers will still have access to third-party data; we’re just losing our ability to leverage it from the most popular platforms.
And it still has value.
It paints the start of a picture of your prospects and customers – demographic information and products that interest them.
It helps you fill in some missing pieces of your customer profile, build new audiences, or create new segments.
That said, cookies can lead to blending on data and traffic from multiple sources and touchpoints, so they’re not the best way to track conversions.
P.S. Want help tracking conversions from third-party data?
Many agencies overlook the attribution model, but it’s the first thing we look at when we take on a new client (i.e. the consumer isn’t purchasing the first time they see the ad).
Know which of your campaigns are using third-party data, and pinpoint the attribution model they’re using to track conversions.
Say Hello to My Little Friend: First-Party Data
Source: 20th Century Fox Home Entertainment
If data sources were at a cocktail party, everyone would want to hang out with first-party data. They’re intelligent, well-read, and super interesting to talk to.
Third-party data talks too much and doesn’t offer a whole lot of substance. And they love to gossip.
They’re not evil, but you’re never sure that you can trust them. It may be tempting to listen to what they dish, but that doesn’t make them reliable.
A Third-Party Data Dependecy
Third-party data has become a crutch for marketers. And we all know how quantity can be the enemy of quality.
Remarketing has become so competitive that its effectiveness has dwindled massively, and the cost has risen so much that remarketing now costs as much as TOF leads.
Let’s face it – throwing ad money around doesn’t guarantee results or conversions. Prioritize first-party data, and you’ll find your ad spend more impactful.
So, how do you gather first-party data tastefully?
What do we mean by tasteful, and why is it important anyway?
We mean we should gather data in ways that don’t give customers the illusion that we’re respecting their privacy, only to subvert protections to obtain their data another way.
It’s a trust thing.
1. Use tools and integrations that are on the forefront of these changes, such as Shopify. Shopify, you say? Yes. In terms of sales in the U.S., Shopify is on the trajectory to compete with Amazon. As of now, they’re not letting anyone bid on third-party data. And, it’s easy to add streamlined customer data collection to your website. As recently as three years ago, you needed a developer for this. Now, the Shopify app development environment allows users to implement tools that combat or enhance initiatives like the Privacy Sandbox (i.e. “Text me when the product I want is back in stock”).
2. Consider bidding on contextual targeting, which doesn’t require information from users and allows you to target groups that take similar actions on a website. This is powerful for e-commerce advertisers, because if you can bid on click-on-cart traffic, you can target visitors at the bottom of the funnel.
3. If you haven’t already, incorporate SMS push notifications into your strategy. People may be out of the habit of providing their phone numbers, but as third-party cookies wind down, they’ll be more willing to, especially if your product or service is compelling.
So You Have Phone Numbers. Now What?
Now that you’re beginning to shift your thinking to first-party data, what should your first steps be?
1. Create compelling content. It may seem like Marketing 101, but it’s easy to lose sight of. You don’t want to churn customers by beating them down with content that isn’t purposeful. Otherwise, you wasted a lot of time and money to acquire that lead, only for them to bounce because you alienated them with your content.
2. Create intentional campaign flows that are based on said compelling content. Then, implement a promotional plan, and set up multiple touch points on the conversion path. Your customers’ attention has never been more precious. Don’t toy with it by being willy-nilly with your nurture streams.
3. As you develop your campaigns and strategies, make a commitment to adopt a privacy-first mindset. Treat your customers’ data as if it were your own. Ask yourself, would I do this to my son’s data? And how would I explain this to a judge? If your strategies can pass through these filters, you’re making good choices.
The Dawn of a New Era
The end of third-party cookies will force marketers to deliver higher quality insights.
It will force them to become more creative about acquiring first-party data, and to build authentic communities rather than relying on Facebook pixels to do it.
For the data traffickers, this is a sad shift. But for those of us who value transparency and personal privacy and want to make tangible gains for our clients, this evolution is welcome.
P.S. As people who hunger for a challenge, we’re excited for this change. To align with a partner who’s obsessed with solving problems, contact us today.