Roses are red, violets are blue, third-party cookies are deprecating, so what should brands do?
According to the National Retail Federation, Valentine’s Day spending is expected to hit a record $14.2 billion this year. But with Google’s rollout of tracking protection – a feature that deprecates third-party cookies by default – brands will need new tactics to grab a share of next year’s spend.
Some marketers failed to heed the warning signs that their relationship with third-party cookies was coming to an end. But the time to move on is now. Fortunately for brands on the rebound, there are plenty of other addressability solutions in the sea.
Commit to a stable relationship
Committing to first-party data can help brands build trust while consumer expectations for transparency and control over their data are at an all-time high.
Google’s Privacy Sandbox is currently vying for the affection of marketers. But testing is still in its infancy – most publishers say test results won’t be available until later in 2024 – and buy-side adoption has been slow. WPP-owned GroupM only announced toward the latter part of last year that it was experimenting with Privacy Sandbox.
Meanwhile, Axel Springer is among hundreds of publishers, advertisers and media groups demanding the EU intervene in what Google is proposing.
But even though Google controls a substantial part of the digital ad ecosystem, its cookie alternatives won’t address every area of signal loss. Instead, marketers need to embrace a new customer engagement model that puts identity and first-party data at the forefront.
“Customers want those contextualized right-timed experiences,” said Milin Shah, director of digital experience mar tech and data enablement at UPS. “If you don’t use the first-party data you have, you’re not going to be able to create these kinds of experiences.”
Every engagement activity – from individual email recommendations to customer service chats with website visitors – should incorporate customer identity.
But let’s not forget how we got into this data privacy mess. Consumers demand and deserve more transparency and control over their data, so any data collection and utilization should be grounded in consent.
Get to know each other
In any relationship, we want to know our partner listens to us and understands our needs – even if we don’t always communicate them!
That’s why marketers need to proactively use data to better understand and personalize the customer experience.
Most customers on a website aren’t ready to make an immediate purchase. So what first-party data could be collected to differentiate the experience as they consider their options? Are they willing to share an email address in return for personalized communications? Have their browsing behaviors been tracked to optimize their website experience?
This data collection must be rooted in a clear value exchange, ensuring customers get tangible benefits for sharing their data.
Beyond that, machine learning and AI can analyze first-party data to enhance the understanding of user behavior and preferences without relying on third-party cookies. By using AI on top of first-party data, marketers can calculate customer lifetime value (CLV), recency-frequency-monetary (RFM) metrics, propensity, next best action and more. They can then use these insights to anticipate customer needs, strategically tailor their messaging and offers and optimize their engagement efforts.
A perfect partnership
Marketing and first-party data are a match made in heaven, but scaling customer data can be challenging.
Universal identifiers (UIDs) serve as a stellar complement. When used alongside first-party data, companies can tap into the broader data ecosystem to reach a wider audience, gain deeper insights and deliver more targeted campaigns while still respecting privacy and consent.
For example, The Trade Desk’s UID2 offers brands a way to set up marketing campaigns without using PII data or third-party cookies. Disney, a client of The Trade Desk, has found UIDs to be 12 times more effective than third-party cookies at reaching its audience across Disney’s ad marketplace. It is seeing match rates upwards of 80%.
UIDs can also help marketers see a user’s behavior across multiple devices and better understand the full user journey.
A clean start
Once you find a data partner, the two of you might want to get a room. Data clean rooms are neutral, privacy-safe environments where brands and publishers can share customer data with a trusted partner (or partners) without exposing users’ PII.
While every brand can benefit from clean room technology, they are most impactful for consumer packaged goods (CPG) companies that are traditionally customer data poor. Most CPG brands primarily sell their products through retailers or restaurants, which means they don’t see the data behind their customer’s purchase behavior. By combining data with a retail partner in a clean room, they can uncover valuable insights about their consumers to better align marketing messages and tactics.
However, not all clean rooms are the same. Brands should look for agnostic solutions that can work with any partner and provide full transparency into their operation and attribution methodology. And remember: Without proper consent, a clean room is no better than third-party cookies.
Against the backdrop of cookie deprecation, data privacy regulations and consumer demand for more data protection, respecting user privacy will give brands an edge over other would-be suitors.
If you put trust and transparency at the center of your consumer relationships, they will blossom into a profitable future.
“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
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