Resources

Blog

The death of the cookie is delayed – but the writing’s on the wall

 

Author:

Carolyn Corda
CMO and CCO
ADARA

 

After a year and a half of COVID restrictions, economic turmoil and cuts to marketing budgets, there is finally light at the end of the tunnel and a chance for marketers to return to something like ‘normal’. Vaccination programs in many parts of the world are entering their final stages and restrictions across Europe and North America are easing. With countries now unshackled from the economic burden of lockdown, marketing budgets are growing and optimism within marketing has soared past pre-pandemic levels.

However, while the pandemic is (hopefully) coming towards an end, there is an upcoming landscape shift marketers need to prepare for – the end of third-party customer tracking. Although Google has delayed the ‘death of the cookie’ until 2023, along with the rollout of FloC, the writing is on the wall for behavioral tracking. And not least because consumers are suspicious of it. The industry may not yet be ready for an imminent end to the third-party cookie, hence the breathing room from Google, but that is only the more reason to prepare now with new technologies and privacy-centric marketing strategies.

Meanwhile, Apple has launched an iOS update that upends data tracking on iPhones. The new update changes the state of digital advertising as users have to opt-in to allow apps they’ve downloaded to track their activity. And with some research finding that as little as 4% of iPhone users are likely to opt-in, marketers are set to access even less information on consumer habits and interests via tracking. In fact, the Apple iOS update represents one of the biggest developments in digital advertising since the advent of the first banner ad in 1994.

Together, this represents a hugely important and fundamental moment of change in digital marketing.

The e-commerce uplift

Consumer habits are in a state of flux. The pandemic and the subsequent ‘stay at home’ orders have radically reshaped behaviors, with reports finding that customer loyalty and shopping habits have changed forever. For example, while brick and mortar retailers used to be at the forefront of shopper’s minds, now e-commerce has eclipsed the high street as people look to purchase products safely online.

For brands, understanding these changes will be key to post-pandemic recovery. Those that target consumers based on outdated pre-COVID behaviors will find that they are failing to get through to consumers and are losing out to competitors. Marketers, therefore, need to update how they understand their audiences if they’re going to get the insights they need in order to take advantage of the uplift in demand during the post-pandemic landscape. Doing this without the third-party cookie presents a new challenge, but if approached in the right way, could actually lead to more meaningful consumer engagement and better performance.

First-party data isn’t enough

Marketers can replace insights from these tracking technologies by reevaluating the data that they already have. Brands sit on top of a wealth of first-party data such as age, location and purchase history that they can use to great effect. For example, first-party data around a person’s product history can be used to inform and personalize marketing strategies. If someone were to buy a jacket or a pair of jeans from a given brand on a retailer’s website, then a marketer can be confident in believing that the customer likes that brand and that they might be interested in buying more products from their range.

However, first-party data isn’t enough to replace tracking technologies on its own. First-party data can’t show how consumers react to other brands. For example, retail brands may benefit from knowing that a certain customer enjoys luxury hotels as this suggests they may well be open to hearing about luxury products. Knowing about how a person interacts with other brands is a crucial part of understanding, and better yet predicting, how they might interact with another.

Secure and safe partnerships

Marketers, therefore, need to look beyond first-party data and find external data sources in order to complement theirs and create engaging consumer experiences. Data partnerships give marketers a more full image of their consumers, allowing them to send highly-relevant messages to consumers. In other words, partnerships give marketers data into a wider set of behaviors and patterns that can be used for marketing campaigns. However, not every partnership presents a privacy-centric, compliant offering for brands.

Data privacy is at the heart of the ongoing changes to our industry. As such, external partnerships need to be secure and safe. Brands and advertisers must keep in mind that the best data partners will not only store and share data to the highest standards of privacy and security, but will ask their partners to adhere to those standards, too. This means true anonymization of any data outside of a business’ ecosystem, such as through tokenization, so that the data never leaves the brand, but can still be used for insights by others. This way, brands can share data insights while critical personal data stays within their firewalls.

Privacy-protection without sacrifice

Once data sharing has transformed to become privacy first and totally anonymous, marketing teams are able to turn insights into action. So even as ecosystem policies and privacy regulations constantly change, performance marketers can ensure a privacy-protected digital business without sacrificing effectiveness.

While the pandemic opens up economies and restores optimism to marketers, the recovery won’t be felt unless brands respond to changes in the advertising ecosystem. Those that prepare early will reap the benefits and ensure that they’re able to react appropriately to the changes in consumer habits caused by the pandemic. If not, brands and marketers will find that they lose out to competitors and may fail to bounce back.

Subscribe to our newsletter!

Get the latest posts delivered right to your inbox