It’s that time of year again when we reflect on the year gone by and gear up for what lies ahead, and potentially over-indulge in cookies. For marketers, the future holds the long-awaited farewell of a different sort of cookie – third-party. We examine the implications of this move and explore the steps marketers should be taking in the lead-up.
While many forward-thinking businesses will have been preparing for this significant change for a while now, for others the final demise of third-party cookies will serve as a wake-up call.
Third-party cookies are small text files used to identify a user’s computer and monitoring their online activity across websites. These cookies are not set by the website the user is currently visiting, but by external websites. Their usefulness lies in cross-site tracking, retargeting, and delivering personalised advertisements to users based on their past online interactions and browsing history.
In the not-too-distant future, the effectiveness of online marketers will depend on their ability to adapt to this cookie-less environment. Instead of relying on third-party cookies, they will need to explore alternative techniques like device IDs or IP addresses for cross-site tracking and targeted advertising.
Craig Whitaker, Head of Platforms at Google New Zealand, emphasises the importance of digital advertising for maintaining an open and free internet.
“We know that digital advertising is essential to keeping the web open and free, but at the same time people’s expectations of how digital advertising works – in particular when it comes to privacy – have changed. Google has believed from the start that there is a way to meet people’s expectations about protecting their identity while allowing for ads supported content.
“Through our work under the Privacy Sandbox and the intended deprecation of third-party cookies, our commitment is to ensure the long-term health of the ads ecosystem. We believe that there is a path for our industry where privacy and advertising effectiveness can co-exist.”
Amid this changing landscape, first-party data is king. John Madden, Director and Founder of marketing automation agency Marketa, stresses the importance of cultivating and executing a strong first-party data strategy.
A first-party data strategic approach is now not just an advantage, but it also allows businesses to build and create deeper connections with their prospective and existing customers, harnessing the rich and revealing insights uncovered from user behaviour analysis.
This departure from relying on mass-aggregated data, which may often prove inaccurate, irrelevant, or outdated, paves the way for a more precise and effective engagement with the target audience.
In essence, the era of personalised, data-driven interactions has arrived, and businesses must seize this opportunity to remain competitive in an ever-evolving market landscape.
“First-party data is data you collect directly from your users and customers through interactions with your website, app, or services,” says John. “You own and control this data, reducing dependence on third-party providers and giving you more control over its use.
“By collecting this data, you can analyse how users interact with your brand and provide personalised experiences to create new customer relationships, retain existing ones and drive business growth and revenue. Understanding your users’ behaviour and preferences directly enables your marketing and sales teams to tailor content, offers, and experiences to your customers’ needs, increasing engagement and conversions.”
While the best time to start preparing was months ago, the second best time is now. The first consideration John recommends is investing in a Customer Data Platform (CDP).
A CDP is a piece of software that brings together information from many different tools and puts it all in one big database. This database holds details about every time people interact with your product or service.
Companies can then use this database to divide the information into smaller groups in many different ways, to help build marketing campaigns that are more personal and specific for individual groups of people.
Having a CDP allows businesses to gain a 360-degree view of how users interact with your brand.
“This will enable you to easily collect and view real-time data and make informed marketing decisions to improve customer experience. A fit-for-purpose platform will provide the entire lifetime interaction of a user across multiple touchpoints,” John says.
Having data stored in one central and accessible place means a business can respond quickly to individual needs, and it has been proven to increase conversion rates and repeat business substantially.
Connecting your teams is another key way to prepare your business for the demise of cookies, John says.
“Customer insights can empower marketing, sales, and customer service teams with a single and consistent view of the customer to increase conversions. Sharing these insights across departments is commonly overlooked, yet it is a powerful way to significantly improve company performance.
“With first-party data, you can automate your business to deliver the right message at the perfect time. Be it a notification, an email or a sales call.”
Another tip he offers is segmenting your customer data. This allows businesses to see and find their users’ and customers’ patterns and behaviours before building their marketing and sales strategies around what is most likely to influence behaviour.
“We often see organisations that may make decisions based on past successes, competitor behaviour, or gut feelings. However, there are so many insights available to help shape pinpoint accuracy in marketing, there is very little need for guesswork in today’s marketing mix.”
Automation is another key element that businesses should be considering, if they haven’t already. Using Machine Learning to automate your business can free up marketing and sales teams by removing the need for time-consuming, hands-on, repetitive tasks.
“Adding marketing automation will allow you to streamline your efforts, reduce budget wastage and deliver great customer experiences,” adds John.
By harnessing first-party data, companies will have a competitive advantage, meaning they can deliver personalised experiences, optimise marketing efforts and adapt to changing consumer demands more effectively.
This article was first published in our December/January 2024 issue.
