Business' Readiness in the Changing Landscape of 1st and 3rd Party Data
How ready is your organisation with the pending changes in 3rd party cookies?
Google announced in January 2020 that it intended to disable third-party cookies in its Chrome browser by 2022, a step that other browsers, such as Safari and Firefox, had already undertaken years before. Google intends to replace third-party cookies with an alternate approach called FLoC (Federated Learning of Cohorts).
This is the first step of changes that consumers and privacy advocates have been calling for over the past few years.
Recently, Google announced that it had postponed its long-promised plan to remove third-party tracking cookies in Google Chrome citing the need for additional time for companies to comply. The internet titan has set a 2023 date for the transition, a year later than its initial target of 2022.
How will it affect brands?
Brands have long used third-party cookies to track website visitors, improve user experience, and collect data to target ads to the right audience. With the ban on third party cookies, brands need to rethink their approach for customer acquisition and engagement. They should expect a shift in the prioritization from certain marketing activities that rely on cookie data to a more privacy compliant marketing based on opted-in customer data.
What is 1st & 3rd party data?
First-party cookies are stored by the domain (website) you are visiting directly. They let website owners collect analytics data, remember language preferences, and do other useful functions that aid in the delivery of a positive user experience. Example of data collected:
Third-party cookies are created by domains other than the one you are visiting directly, hence the name third-party. They are used for cross-site tracking, retargeting and ad-serving. Example of data collected:
Why are third-party cookies going away?
Consumers and privacy advocates have been increasingly concerned by the forms in which some companies, without oversight or explicit permission, use third party cookies for user monitoring. In particular, the introduction of retargeting that allows advertisers to deliver tailored advertising based on content you previously looked at on the website of the advertiser is perceived to be too intrusive.. This type of tracking has become more visible, which has annoyed many users.
All this leads to more users using ad blockers, which inevitably undermines both the popularity of online advertising and the business model of publishers that rely on ad sales to support their content. Browser creators are also terminating support for third-party cookies to bring the market closer to technologies that provide consumers with better accountability and consent management.
"Brands that have been too reliant on third-party cookies are looking at hedging their bets and have started evaluating alternative strategies. The loss of 3P cookies is a blessing in disguise as businesses are forced to reckon with the fact that quality, consent-based data is a strategic asset and game-changer"
Waheed Bidiwale, Global VP of Strategy & Consulting, Verticurl.
What can businesses do to be prepared?
Technology: Marketers are thinking of switching over from a DMP (Data Management Platform) to a CDP (Customer Data Platform). Traditionally, a DMP has been dependent on cookies and used just for advertising. CDP provides a cloud-based platform for businesses to collect, unify, analyse and activate all data across the organisation and connect to a single profile of a consumer, which is based on an unique identifier. CDP also allows combining multiple ID’s to identify a single customer.
"The parameters in which advertisers operate today are constantly evolving, but good customer experience remains the primary factor in winning customer loyalty. This is why Salesforce constantly evaluates our offerings to ensure brands are making smarter marketing decisions with more intelligent, actionable and trusted data about their customers."
Rob Newell, VP of Solution Engineering and Specialist Sales, ASEAN, Salesforce.
Customer data platforms (CDPs) like Salesforce’s Interaction Studio have been launched in recent times, and they talk about developing identity-centric solutions that use first-party cookies and PII. Marketers can use CDP’s to power up their marketing strategy & operations:
What should businesses focus on?
Prioritise first party data: First party data is the information that companies can collect from their own sources. In other words, first party data includes any information on customers obtained from both online and offline sources, such as the company's website, app, CRM, social media, or surveys.
According to eMarketer, increasing the utilization of first-party data is a top priority for 85 percent of US marketers and 75 percent of respondents in Western Europe. It is a very valuable source of user data for marketers.
Brands should always rely on their own data. They may add to it by stacking partner data on top of it to make it more complete. Because partner data (e.g., Google, Facebook, Amazon, big publishers) is persistent and consented, it may be used by businesses with little to no first-party data.
A comprehensive data management strategy and data infrastructure are essential steps in this direction.
Consent management: Develop strategies, processes and technologies to manage opt-in and preferences through a preference centre. Not only is this a requirement under data privacy regulations, it also gives confidence to customers that the brand cares about their data.
Contextual Targeting: The next best option to cookies based behavioural targeting is anything keyword or keyword contextual-based advertising. With contextual targeting, the ads you see are based on the content you are looking at instead of your overall behaviour profile. The move to contextual targeting will also mean a move back to focusing on producing and distributing relevant content.