The sunsetting of third-party cookies signals a major shift in the way businesses gather and analyze customer data. In a recent study, Adobe found 75% of marketing and CX leaders still rely heavily on third-party cookies, with 45% of those leaders spending at least half of their marketing budgets on cookie-based activations. In addition, fewer than 2 in 5 brands are ready for a cookieless future, showing that the majority of businesses are currently not prepared to reach customers after third-party cookies sunset.
The way digital marketers engage with consumers will change, shifting the digital landscape to a privately personalized experience. Businesses will no longer be able to capture personalized data about one single consumer, rather a large group of similarly interested consumers. The shift represents a new focus on consumer privacy, but poses a new set of challenges for marketers who may not have the capacity to completely revamp their strategy. Let’s dive into the sunsetting of third-party cookies and what it means for planning your new business marketing strategy.
What are cookies?
Cookies, more like digital crumbs, are traces of activity internet users leave behind as they interact with websites. Cookies were first introduced in 1994 for Netscape, and they became an essential tool to create seamless online experiences. As the internet grew and became more complex, so did cookies and tracking capabilities.
It’s important to note that first-party cookies are essential and will not go away, as they provide tools to improve user experiences. They track your activity on a single website and gather data to make experiences smoother – for example, by keeping you logged into your social media profile or remembering your language preferences for a particular site.
Third-party cookies are similar to first-party cookies in that they trace your interactions on websites. The major difference is that third party cookies continue to track your data after you leave a website. This is why you notice certain ads follow you around the internet, despite having no relation to the website that you are currently browsing.
Platforms such as Google Ads and Facebook use third-party cookies to collect data on your browsing interests, analyze them, then target you with personalized ads for things you have shown interest in, like shoes sitting in your shopping cart or concert tickets that you never finished buying.
Why are third-party cookies being retired?
Do you ever get the feeling that you are being watched on the internet? Like how it feels like a weird coincidence that Facebook knows you have been craving pizza. Or maybe you’ve wondered if your phone is listening in to serve up ads related to your conversations.
Don’t worry – no one is listening through the microphone or watching through your webcam. This sort of tracking comes from third-party cookies.
Concerns around privacy, security and lack of transparency have been on the rise due to the significant amount of information that can be collected about a user even when they are not aware their behavior is being tracked.
Before, it was easy for businesses to use third-party data to launch short-term marketing campaigns. With only first-party cookies being available, marketers will need to focus on personalized marketing strategies that leverage first-party data to create rich relationships with their customers. As noted in our annual 2022 B2C Report, customers want these unique, personalized experiences, not experiences that generically attempt to connect. The quality of the experience keeps them coming back.
Google is expected to complete phasing out third-party cookies in Chrome by 2024. In addition, Apple released its Safari Intelligent Tracking Prevention, allowing the web browser to block cookies and preserve the privacy of your personal data.
Although this is huge progress in data privacy, it is not the first action taken by a major organization. In 2018 the state of California passed the California Consumer Privacy Act, giving consumers more control over the way businesses collect personal information. Big Tech and Big Government listened because people became increasingly concerned with the continual growth in using mobile technology.
With the phasing out of third-party cookies, 83% of advertisers believe this will have an overall impact on their marketing efforts, where 69% believe it will have a greater impact than the California Consumer Privacy Act as stated above.
How will marketers have to adapt to retiring third-party cookies?
The transition to life without third-party cookies begins with the content you are pushing to consumers. Is it accurate, entertaining, personalized or interactive? Your customers pay attention to the quality of your content and make purchases based on the listed advertisement qualities.
With less than two years to transition into a world without third-party cookies, companies need to integrate viable alternatives into their marketing strategies. Since Google pushed the sunset date back, now is the best time to consider tools like artificial intelligence, value exchange, and the overall web ecosystem.
Yet, it’s important to note that cookies are not necessary for online advertising. Analyze what you have always had easy access to: first-party cookies and continue to optimize. This means looking at zero-party data, data that is voluntarily shared by users with businesses. First-party data is actually more valuable to businesses due to increased accuracy, reliability, and privacy.
Contextual advertising is a great option, which puts relevant ads in front of the consumer. For example, the pizza that you were browsing for will prompt ads for pizza recipes, similar restaurants, and other suggestions related to your search. These ads are much more relevant, without giving consumers the feeling that they are being watched.
Contextual advertising has the potential to open consumers to new brands and puts content in front of them that will effectively capture their attention. This is considered “future-proof” against the end of third-party cookies because it doesn’t require information from users directly. With contextual advertising comes contextual analytics, which increases marketing efficiency by providing more targeted ads to consumers. Having access to these metrics can boost ad performance because of their AI and natural language processing capabilities.
Email marketing is another powerful tool that should not be overlooked. Personalized email messages, with exclusive deals for products, can drive long-term loyalty and engagement from consumers. With the right time and investment in your campaign, customers will receive the value and appreciation that they expect from their favorite brands. Consumers who may have drifted away from a brand can be retargeted through email nurture, and new customers have the potential to be reached through forwarded emails.
Results from email marketing are simple to track and measure through a CRM solution and costs are minimal. With email making delivering an ROI of $36:1, it is considered one of the highest-performing marketing channels in your strategic toolbox. Here are a few things to consider as you build out your strategy:
- Utilize incentives to gather the most first-party data you can
- Segment and personalize your email marketing messages
- Test different email messages based on your audience segments
Search Engine Marketing
Search engine marketing is another way to get potential customers’ attention. With the right keywords and page position, you will attract new visitors and increase return rate to your site. It takes time and practice to research the right keywords to optimize your content.
Some companies may opt for Google AdWords, which allows businesses to bid to place their content at the top of the search results list. The content generated through search engine marketing (SEM) drives results because it is highly relevant and engaging to consumers who were already in the process of looking at similar brands. SEM can lead to a handful of benefits such as: brand recognition, increased traffic, customer attention, quick results, and easy management. Due to the benefits and the accessibility, SEM is a great tool to drive traffic to your business.
The retirement of third-party cookies is a major milestone, with 28 years of momentum behind it. Marketers will need to find new ways to adapt by creating robust ways of targeting customers. Contextual advertising, email marketing, and search engine optimization are just a few ways that businesses can get the most out of first-party cookies.
Tapping into your customer service call database also provides businesses with strategies to improve the customer’s experience, provided by direct customer feedback. Being creative and giving customers a better experience than before is the best way to ensure that the end of third party cookies is not the end of your digital marketing success.