The issue of consumer data privacy has been at the center of recent developments. Top technology companies are also responding to consumer demand for privacy, as Apple has tightened privacy regulations, and both Firefox and Safari do not support third-party cookies. Important legislation, such as the GDPR in Europe or the California Consumer Privacy Act (CCPA), focuses on ensuring consumer privacy, particularly the digital footprint of consumers in the United States. Additionally, Chrome will no longer support cookies from third parties, as announced by Google by the end of 2023.
Although the end of third-party cookies will have a significant impact on all direct-to-consumer (DTC) businesses, the retail sector will be hardest hit. They will be less able to:
- Customers can be retargeted on third-party websites.
- Create enhanced customer profiles so that direct marketing campaigns can target customers.
- Organize customer journeys with enriched profiles.
- Drive digital marketing because of the growing reliance on advertising networks like Amazon, Facebook, and Google.
- Collect customer insights within the confines of walled gardens due to reliance on advertising networks.
Businesses, on the other hand, see this historic move as an opportunity to connect with customers in new ways and forge new beginnings, based on a bedrock of mutual trust, which is what customer lifetime value is all about, even as marketing leaders and their teams revisit their personalization and marketing playbooks. Even retailers that are not leaders in customer experience or personalization can catch up or take the lead with key strategies because the entire landscape is changing. With a strategic shift from third-party data to first-party data for personalization and marketing, how can brands turn what seems like a challenge into a game-changing advantage?
Adversity Creates Opportunity
The digital world can be divided into two broad categories based on whether they generate or consume first-party data. The first group includes platforms like Meta, Instagram, and other social media sites that generate first-party data from user-generated content. The second group includes content-driven platforms like Lotame and news portals like the New York Times, Times of India, and Buzzfeed that target particular interest groups. Based on the content that they provide to customers, these platforms generate first-party data.
The second category includes digital advertisers and e-commerce platforms that lead their marketing and segmentation efforts to deanonymize customers and personalize advertisements and experiences by relying heavily on first-party data generated by others. In this relationship, it is evident that the organizations that own and collect first-party consumer data have the upper hand. These organizations now provide data privacy clean rooms, which are enclosed gardens that grant retailers access to deanonymized data to gather customer insights; however, none of the data can be taken outside the environment. Additionally, these third parties utilize the data for their own targeting.
Businesses can use the first-party data they own and circumvent some of the major concerns regarding the efficacy of third-party cookies with the end of third-party cookies.
- Cookies are unsuitable for omnichannel customers who use multiple devices due to device dependence.
- Expiration after a certain amount of time, resulting in the loss of data and necessitating the deployment of a new cookie
- Cookies can track users across websites, raising privacy concerns.
- The data collected by cookies must be processed and cleaned before it can be used for retargeting, making it suitable for in-session targeting over retargeting.
5 Strategies to Navigate a Cookie-Less World
Prioritize first-party data collection:
First-party data is clearly crucial. To increase customer engagement, retailers must concentrate on enhancing first-party data collection through content-driven personalization. The first-party data gathered by brands on their digital platforms remains their property. They will be able to use context-aware personalization to encourage customers to share data. Users will be more likely to share information if, for instance, their mobile apps include stories or videos.
Leverage Universal IDs to track shoppers across their omnichannel journey:
Widespread IDs are picked in computerized personalities for purchasers that are tireless across the web and are viewed as a feasible option in contrast to outsider treats that empower a mutual perspective of customers across versatile and web. Both Apple and Google use persistent advertising identities on their mobile devices to monitor consumer behavior. These identities extend that identity. The leading solution is TradeDesk’s Unified ID 2.0, which is compatible with the majority of other platforms. Third-party identity solutions from Merkle, Liveramp, and Neilsen can be used with first-party data to create user identity graphs and deanonymize customers.
Enable intent-driven and contextual customer experiences:
On digital platforms, consumers leave strong but subtle indicators of their intent and context. Clicks, mouseovers, page scrolls, pages viewed, and clicks on products are examples. Businesses can segment customers in real-time and generate attributes for contextual targeting like keywords and product attributes by utilizing runtime session-based personalization models on behavioral data. They can combine contextual targeting and segmented targeting with this enhanced data for improved accuracy and efficiency. Additionally, they can target customers through digital channels on the website or mobile app by utilizing situational and location-based data. Anonymous users, who make up a large portion of online traffic, also benefit from this kind of personalization and targeting.
Explore new ways to secure consumer data with blockchain-based identity solutions:
Digital identity management is getting a lot of attention for handling sensitive data in healthcare and financial services, as well as for governance needs like taxes and cross-border travel. Digital advertising is also incorporating blockchain, with pioneering efforts to construct digital identities for ad targeting.
Monetize first-party data:
This change offers retailers a chance to reduce their reliance on the internet giants, who have always been the driving force behind their digital marketing. In 2021, there will be 2.14 billion online shoppers, a significant number of who naturally visit e-commerce websites. This is an opportunity for retailers to establish their own advertising networks. Third-party advertisers from industries such as consumer packaged goods, hospitality, and others are looking for newer avenues of digital marketing. For instance, Walmart, Amazon, Macy’s, and BJ’s have commercialized their e-commerce platforms by building their own advertising networks.
Customers don’t want advertisements based on their previous choices; they want retailers to respond to them right now with contextual messaging. A cookie-free future represents a significant step for retailers to examine their core strengths, such as a treasure trove of first-party customer data, and presents an opportunity for them to emerge from the shadows of large ad networks and reorient their customer experience and overall marketing strategy based on trust and transparency.
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