Updated: Aug 31, 2021
Saying goodbye to cookies and the third-party data they provided does not mean goodbye to our beloved data-driven strategies. So how can we continue to deliver "data-driven" solutions without compromise?
“Users are demanding greater privacy—including transparency, choice, and control over how their data is used — and it’s clear the web ecosystem needs to evolve to meet these increasing demands.” ‒ Justin Schuh, Director of Chrome Engineering at Google
As we've covered before, losing access to third-party cookie data and cookie-based audience targeting isn't much of a loss at all, really. Here are a few big reasons why:
Inaccurate data: Third-party cookie data tends to break at different points across the open web and between browsers and devices. According to an analysis on cookie match rates, cookies were only able to find an appropriate data match about 50% of the time. This results in massive amounts of broken data being delivered at scale, leading to misinformed marketing decisions. Poor targeting caused by crumbled cookies isn't only a huge waste of money, it's also super annoying for the people getting served irrelevant ads, which makes brands look bad.
Can't track across different devices: Cookies cannot track a user across different browsers and devices. Basically, cookies can't follow someone who starts a session on desktop then switches to a mobile device, or starts a session on Chrome then goes to Safari. This diminishes our understanding of the customer journey even further, misguiding marketers into more ineffective marketing decisions.
Browsers reject over 50% of cookies: The majority of cookies are already rejected by browsers to begin with. An ad-serving firm found that 64% of their advertisers cookies were either blocked or deleted by desktop web browsers. Mobile devices were even worse, with a cookie rejection rate of 75%.
Considering the trends and expectations of today's consumers for increased personalization, greater privacy protection, and less getting "followed around" by unsolicited ads - it's actually better for marketing efficiency to abandon third-party data anyway.
Leaning Into Your First-Party Data
Now that marketers are really starting to see the decline of third-party cookie data, brands are shifting their focus onto first-party data to fuel data-driven marketing. What does this mean for you?
For starters, you need to start collecting data about your audience directly from the source, like yesterday. If you're not sure how to, put these tried and true methods to work:
Install a website tracking tool
On and offline surveys
Social media channels
Contact forms on your website
Next, determine how you plan to leverage first-party data in your marketing strategy. It's worth taking the time to figure out what your goals are and how the data can be used to help you achieve them. Based on how you plan to use the data, you'll get a clearer sense on the type of audience data you want and the best way to acquire it.
For example, first-party data can be leveraged to:
Deliver timely and hyper-relevant retargeting ads.
Increase AOV, up-sell and cross-sell opportunities with personalized product recommendations.
Boost email and SMS marketing revenue with properly segmented, timed, and personalized campaigns and automations.
Advantages of First-Party Data
First-party data is more accurate
Unlike third-party data, which is aggregated from a variety of unknown sources, first-party data is given willingly by the individual directly to the brand. This makes it more accurate because you know who the person is and exactly where the information is coming from.
Receive more unified data
Because of the innate tracking limitations cookies have, it has always been difficult to get the whole picture from the data they provide. For example, about 50% of third-party cookie data is already broken before it reaches an ad platform. And before that, search browsers have likely rejected over 50% of cookies anyway. Generally speaking, trying to connect the dots with data received from third-party cookies is like trying to finish a puzzle that's missing half of its pieces.
With first-party data, you provide the only access point to your audiences information. This means you can gather complete data points on your customer and connect them to form a rich customer profile, making it possible to truly personalize customer journey.
Improve marketing efficiency and performance
Because first-party data is more accurate, marketers are better able to personalize their website experience and marketing campaigns to drive consumers to take action.
Boston Consulting Group even did a study on this, finding that marketers who use first-party data show higher efficiency in their marketing. Not only that, they also generate 2X the revenue from a single ad compared to campaigns driven by third-party data.
You're not competing with anyone else for this data
Your competitors don't have access to the same data you collect directly from your customers and prospects. This means you can connect with your audience in a way that no one else can, allowing your efforts to take on a more unique, personal, and meaningful approach.
Utilizing First-Party Data To Power Data-Driven Marketing
Personalization and audience targeting can and will be adapted to a world without cookies. Even though Google says they won't be blocking cookies until late 2023, it's crucial for brands and marketers to start expanding into alternatives now to stay ahead of the curve when it hits.
Build up first-party data
More often than not, brands have access to more user data than they think. Between emails, phone numbers, gender, age, purchase history and on-site behavior - brands can capture a plethora of first-party data from their own website, chat bot, or call center.
Plus, owned data has the added benefit of reliability. Leveraging data received directly from a website visitor or customer, brands are able to target users who have already interacted with their business more accurately, and serve ads that are actually relevant to them.
“We will continue to support first-party relationships on our ad platforms for partners, in which they have direct connections with their own customers. And we'll deepen our support for solutions that build on these direct relationships between consumers and the brands they engage with." ‒ David Temkin, Director of Product Management for Ads Privacy and Trust at Google
Now is the time to begin collecting data on your audience, if you haven't started doing so already. Luckily, there are dozens of ways to go about gathering first-party data.
For example, some methods to collecting first-party data are:
Website visitor tracking tools
On and offline surveys
Contact forms on your website
Keep in mind, building sufficient volumes of data can take time, so starting early is key.
Leverage search trends for location-based targeting
Though user data and behavior will no longer be tracked across the web, brands can still utilize search intelligence to see search queries trends worldwide. For a more granular view, couple this information with data from your customers and past campaigns.
Based on the timing and locations your past campaigns generated sales from, you can zone in on where your potential customers are most likely to be, geographically, and when they're most likely to buy.
In a nutshell, contextual targeting (or contextual advertising) focuses on serving ads on websites containing content relevant to the ad and vice versa. Like ads about dog food in a veterinary clinic, for example - go where your customers are.
“We don’t expect a decline in ad dollars or a decline in ad traffic, we expect a reallocation and shift of budgets. The next best option to cookies based behavioral targeting is anything keyword or keyword contextual-based advertising.” ‒ Jon Kagan, VP of Search at Cogniscient Media
Because the ads seen on the page are related to the content someone is already looking at, context-targeted ads feel far more relevant and far less creepy than cookie-based retargeted ads.