The Phase Out of Third Party Cookies and What it Means for Marketers

Introduction

Last year, we helped you navigate changes in the transition to Google Analytics 4. In this article we will highlight the implications of the upcoming deprecation of third-party cookies at the end of 2024, and how companies will have to rethink their data gathering strategy and practices in order to continue measuring and quantifying digital marketing efforts effectively.

According to a recent survey by GetApp and presented by Hubspot, it discovered that:

• 41% of marketers believe their biggest challenge will be their inability to track the right data
• 44% of marketers predict a need to increase their spending by 5% to 25% in order to reach the same goals as 2021
• 23% of marketing experts plan on investing in email marketing software due to Google’s new policy to phase out third-party cookies

In the 2021 Gartner® Cross-Functional Customer Data Survey, just 14% of organizations achieve a 360-degree view of their customer. Among those who have achieved it, 44% of respondents say their 360-degree view is located in a customer data platform.

Despite deadlines to phase out third-party cookies being postponed yet again, marketers are pivoting to zero and first-party data. Still, 75% of marketers say they rely at least in part on third-party data. While not all third-party data is cookie-related, marketers will need to reconcile this strategy with looming changes in privacy regulations.

First-Party Cookies vs Third-Party Cookies

First-party cookies are typically used to enhance the user experience when visiting a website. They remember login details, language preferences, and other settings specific to the website. These cookies are considered essential for website functionality and user experience, and there is no widespread movement to deprecate them. In fact, with the decline of third-party cookies, the role of first-party cookies is becoming more important. A 2021 Harris Poll survey commissioned by Redpoint Global found that 61% of respondents viewed a personalized experience as “a standard expectation for doing business with a brand.”

On the other hand, third-party cookies, are set by domains other than the one the user is currently visiting. They are mainly used for cross-site tracking, retargeting, and ad-serving. If you’ve ever looked up a specific brand of clothing and then seen ads for that clothing follow you around the internet, you’ve been on the receiving end of third-party cookies.

It’s these third-party cookies that are being phased out due to privacy concerns. Browsers like Apple’s Safari and Mozilla’s Firefox, already block third-party cookies by default, and Google Chrome has announced plans to phase them out. It’s this announcement that has spurred much of the discussion and action around the topic as Google’s Chrome browser accounts for 62% of global market share in browsing. “Users are demanding greater privacy – including transparency, choice, and control over how their data is used – and it’s clear the web ecosystem needs to evolve to meet these increasing demands,” wrote Google in its initial announcement of the phaseout.

While third-party cookies are being deprecated due to privacy issues, first-party cookies remain essential and will continue to be used. The key difference is that first-party cookies are generally seen as less invasive, as they are limited to the domain the user is actively engaging with, and they play a crucial role in basic website functionality.

The benefits of first-party data are clear:

• It’s derived directly from users, with their explicit consent
• Delivers contact information and opens up the possibilities of direct communication
• Creates a clear understanding that your users are interested in your company’s product or services

The bottom line: You get more reliable data, and you actually own it. This means you don’t have to rely on third-party ad tech companies to learn about your most loyal customers.

“The whole infrastructure behind third-party cookies has become unwieldy,” said Salesforce Senior Vice President, Marty Kihn. “It’s time for a rethink and a reset. I’m optimistic about what comes next, but the transition period is very uncomfortable.”

How to prepare for a Third-party Cookie-less Future

As Jackie Yeaney, Chief Marketing Officer of Tableau quoted “There is no magic bullet or secret ingredient to building meaningful customer relationships and developing community around a brand. You have to do it the hard way: Respect and level with your customers. Offer them something that will improve their experience with your product. The best data is the first-party data that our customers share with us willingly.”

The first step into this new digital landscape is focusing on collecting first-party data directly from your customers through your existing websites, apps, and other digital interactions. This data is gathered with the user’s consent and includes information like purchase history, site interactions, and preferences. It’s more privacy-compliant and can be highly valuable for personalized marketing and customer relationship management.

As Jessica Bennett of Salesforce describes “An opt-in ecosystem is only challenging when marketers have nothing of value to offer their users. Instead of seeing this situation as a negative, turn it into an opportunity to develop quality content and experiences users will be excited to sign up for.” Strategies can include offering tiered content, VIP memberships or advanced access to users who are willing to give you their information in exchange.

In our 3 part series “Going, Going, Gone to Market”, we share strategies on how to engage with your customer and get the details (that you would from cookies) without spamming them:

Part 1: The side effects of mass marketing

Part 2: Don’t be the spammer that goes to market

Part 3: 3 ways to activate your account intelligence data

Investing in Customer Relationship Management (CRM) Systems

A first-party data strategy demands a strong data management system. Advanced CRMs can help in segmenting customers, personalizing communications, and driving engagement without relying on third-party data.

Data management is important because it enables companies to understand their current and potential customers while making informed decisions on how to engage them. Moreover, with the proliferation of AI and machine learning technology, organizations who effectively manage their data will be in a better position to recognize and target customers while making behavioral predictions in more sophisticated ways – without infringing on privacy.

Re-define your Customer Engagement

Relationships have always been at the heart of authentic marketing. Creating communities and converting community members to customers is one of the best ways to offset the loss of third-party data. Understanding and activating your audience demographics and cohort audiences will put the focus on a more personalized and engaging customer experience.

Surveys can be a great way to collect first-party data from your customers and website visitors. By asking questions about their demographics, interests, and preferences, you can gain a deeper understanding of your audience and what they want from your business.

Make sure your surveys are relevant, engaging, short and strategic. Ask questions that are important to your business and that your audience will be interested in answering. Offering incentives for people to complete your survey is a great way to motivate users to participate. Provide them with something valuable, such as a digital good or a one-pager. With the data, you can send personalized nurture campaigns to those who have shown interest in your product.

Customer feedback and reviews are another valuable tool in helping to form meaningful relationships and identifying common themes and trends across your different targets. They offer customers an opportunity to share their honest opinions and experiences, leading to innovations around new products and services.

Authenticity and Service in Marketing

The shift towards a more privacy-centric model that respects user consent and data protection is rehumanizing the courtship between customers and the brands. It requires purposeful action and diligent processes that will inevitably lead to higher quality relationships.

“The best marketing happens at the intersection of data analytics and creativity, neither of which require third-party tracking. You don’t need cookies to know if an idea is worth trying. You don’t need cookies to gather data on your own campaigns and make smart decisions about how they can scale. You don’t need cookies to meet your customers directly and honestly.” – Jackie Yeaney, Chief Marketing Officer of Tableau

The future of marketing is alive and well, and ripe for meaningful engagement. Thanks to changes in cookie policies, more work is being asked of marketing. In the coming months, brands will be forced to be increasingly intentional and innovating processes for meaningful customer engagement.

If you have questions or need assistance navigating cookie policy changes, or building intentional and innovative processes within your marketing teams, contact us here.