Updated: Aug 31, 2021
The end of third-party user data, as know it, is closing in. What does that mean for search engine marketing? What can we do now to fortify search and targeting strategies in the face of this new normal?
Google announced its plans to gradually phase out third-party cookies from their Chrome browser by late 2023 [July 2021 update] as a response to growing demand for stricter protections on our online privacy. If you're fuzzy on the concept of cookies; it's the tool used to collect and share data on user behavior as they move across the open web.
To put things into perspective, since the dawn of paid search advertising's existence, cookies have been the foundation of the ad-tech ecosystem, providing the data that has powered the majority of all behavior and audience targeting across search campaigns.
“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
Following Google's cookie killing announcement in January 2020, marketers have been preparing for the transition by finding ways to reinvent their paid search strategies and targeting efforts. Here, we discuss the impacts we can expect to see on the digital marketing landscape and the proven strategies expert marketers are employing to maintain personalization, relevance and effectiveness in a world without cookies.
How Will Banning Cookies Impact Digital Marketing?
Soon after the cookie ban is implemented, the immediate and most felt effect across PPC advertisers will be in personalization and audience targeting. In our opinion, however, the cookie ban doesn't pose a colossal threat to digital advertisers. The reason? Cookie-based tracking has always been pretty messy.
Limitations in unifying data
Think of unified data as a finished puzzle, with every piece in place, showing the whole picture. Unifying data is critical to providing the personalized experiences today's consumers demand and expect. For cookie-based targeting, where massive amounts of data are collected and distributed at scale across the open web and synced to ad-tech platforms, it tends to break at different points throughout the tracking process, ultimately delivering only bits and pieces of the whole picture.
“For years, marketers have been addicted to using third-party data, but it wasn’t because third-party data was the most effective way to reach their target customers.” ‒ Gregg Johnson, CEO at Invoca
This happens fairly often. According to stats on cookie match rates, we're talking about 50% inaccuracy. Bad targeting caused by fragmented cookies isn't only a huge waste of money, it's also super annoying for the people getting served irrelevant ads.
Most cookies are rejected by browsers
On top of all of the limitations tracking cookies already have, a majority of them are already rejected by browsers to begin with. In 2017, an ad-serving firm found that 64% of their advertisers cookies were either blocked or deleted by web browsers, with a 75% rejection rate on mobile devices.
Cross-device tracking is weak
Cookies are browser and device-based, meaning it's extremely difficult, if not impossible for cookies to track a user across different browsers and multiple 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 fractures the marketers understanding of the customer journey even further, leading to more bad marketing decisions.
Proven Strategies to Thrive in a Cookie-less Future
Smart marketers honed-in on first-party data are especially skilled at a couple things: They know how to get their audience to want to hand over information, and they know which channels are best to capitalize on the data they have.
Here are some ways savvy marketers are able to gain more data from their audience, and how they use that data to score big results.
Exchange value for consent
Since the marketing world has to say goodbye to using third-party cookies, brands now have to maximize the data their audience hands over willingly, otherwise known as first-party data. There are many ways brands encourage people to give more, including:
Having them create an account to complete an action, such as accessing software on a free-trial, or being able to "like" or save things they see on a brands website or mobile app.
Providing content they can download or offering a discount in exchange for basic contact information.
Offering a short quiz people can take to determine which type of product or service is right for them.
These are just a few examples of real strategies brands are employing to gain more information about their audience, but approaches in collecting first-party data vary from business to business.
No matter your business or buyer, the most important factor in maximizing first-party data is to give customers value first, like an offer or content. Ultimately, when people feel that you are giving them something of value, they are more willing to meet your requests for data so you can continue doing so.
Expand email segmentation
Arguably the most effective way to leverage your first-party data is through email marketing. Especially when it comes to driving sales, the 2021 Digital Consumer Trends Report shows that email blows other channels out of the water by up to 92%. This is great news for brands, considering email is one of the easiest channels for personalization.
Brands use available first-party data, like order history and product preferences, to segment contact lists and tailor the emails' content and messaging to relate to the specific interests of the customer.
Instead of targeting users, contextual advertising targets webpages based on the theme or topic of the pages content. Displaying ads for Vans shoes on a skateboarding blog, for example, or ads for weight-loss supplements on a fitness website.
By using keywords, you are able to match your ad to content across the web that contains related keywords, or covers topics relevant to the keywords you use. Contextual advertising allows you to get your ad to appear in the content your target audience is already reading or actively searching for.
Boost customer retention and loyalty
When it comes to long-term success, it pays most to invest in the customers that buy from you again and again vs. those that visit your website once or twice. The Digital Consumer Trends Report found that 79% of consumers would rather brands invest in loyalty programs than social advertising.
Building trust through loyalty is mutually beneficial. To join your loyalty program, consumers provide information about themselves and what products they’re interested in, in exchange for perks like discounts, special offers, free shipping, and early access. In fact, a new McKinsey survey shows that consumers in paid loyalty programs are 62% more likely to spend more with a brand and 59% more likely to choose the brand over competitors.
Don’t stop there—build a loyalty business, not just a loyalty program. Continuously look at your product and service offering, and marketing or sales approach, to identify ways to create more meaningful and genuine interactions with your customers.
Invest in earning loyalty, and you’ll gain customers’ trust. In turn, customers will be more willing to provide you necessary first-person data to power more effective experiences.
The people have spoken, and they feel uncomfortable with brands tracking their actions around the web without consent. They prefer personalized experiences that come from information willingly provided.
That may require a shift in your current digital marketing strategy, but it’s not a step down. You’ll earn more trust and loyalty by focusing on building a customer-first foundation for marketing and sales success (regardless of the whims of tech giants).
Third-party cookies will soon be a thing of the past. On one hand, cookies provided marketers easy access to oodles of user data that could be used for ad personalization and retargeting. On the other hand, third-party cookie data was never very reliable to begin with, likely burning through budgets distributing ads to people who have nothing in common with the audience you targeted.
Considering this, is losing cookies really that big of a loss? We think not.
Now that marketers won't be able to use third-party data in the near future, it's time for marketers to start building and leveraging first-party data for more accurate personalization and retargeting at a much lower cost.
Beyond collecting first-party data, there are alternative targeting methods marketers can employ to serve up hyper-relevant ads to the right audiences, at the right time. If you need help getting your marketing set up for a post-cookie world, we can help.