The end of the third-party cookie is fast approaching. Marketers have relied on cookies for years – so what exactly does this change mean and how will solutions evolve?
First, what exactly is a cookie?
Not to ignore the sweet, chocolate chip cookie varieties, however, we’ll focus this post on the digital cookie definition:
“a small piece of data stored on the user’s computer by the web browser while browsing a website. Cookies were designed to be a reliable mechanism for websites to remember stateful information (such as items added in the shopping cart in an online store) or to record the user’s browsing activity (including clicking particular buttons, logging in, or recording which pages were visited in the past).”
What Data Do Cookies Collect?
First, it is important to note the difference between first and third-party cookies.
First-party cookies are directly stored by the website (or domain) you visit. These cookies allow website owners to collect analytics data, remember language settings, and perform other useful functions that provide a good user experience.
Third-party cookies primarily collect marketing-relevant information such as age, origin, gender, and user behavior data, and through this collection are powerful online marketing tools, especially for personalized advertising.
A third-party cookie can trace different pages a consumer visits on the internet in order to collect numerous preference data such as:
- Personal data such as age, gender, and location (if readable)
- Visited website via which the cookie was generated
- Subpages visited on the visited website
- Time spent on the page and its subpages
Google & Third-Party Cookies
In January 2020, Google Chrome announced their intention to phase out all third-party cookies within two years. This was following previous announcements by browsers such as Safari and Firefox who had already outlined plans for cookie restrictions and new privacy regulations. These moves are an attempt to respect consumer privacy in an increasingly regulated environment.
Marketers have been expecting this for some time and alternative ways of targeting consumers are emerging. According to Todd Dziedzic, SVP of Digital and Analytics at Porch Group Media, “In general, one theme is how to use first party cookies and first party identification to convert to some sort of unique consumer ID. The thought is that there will probably be less scale but higher quality with this option because matches are being made on richer data elements than a cookie.
Then there’s the browser-only approach. So, for example, using Google’s Privacy Sandbox, if a user has search history in the browser, the consumer who launches that browser can decide to use this history to allow brands to decide whether or not they want to put an impression in front of them. That has really powerful privacy-sensitive attributes, but it ignores a lot of the benefits that many of the marketers like about digital advertising, which is being very specific on the types of customers that they want to promote to and to control that decision of whether the impression should be there or not. This idea does get some traction because people really love the consumer being in charge of their data, which is a theme that we’ve seen grow since GDPR.
Then there’s this third way that I’ve seen get a lot of steam which is creating an aggregate digital identity, if you will. For example, if you think of zip plus four in the physical world, it would be doing something similar, in aggregate, in the digital world.
So you’re not actually using any one particular consumer’s individual data, but you’re specifying that in this group of 100 or a thousand or whatever it is, 20 or 30 of the customers that you specifically want to talk to will be reached. This can also get around the privacy issues because you’re not using anyone’s individual data directly although you’re not as targeted as 1 to 1.
If we’ve overstated the accuracy of the cookie in the past, some think this aggregated option might actually get you the same accuracy you were getting before but in a privacy-sensitive way. I think that may be a bit of a leap. We can’t as an industry be talking about cookies as a way to get to 1 to 1 and personalization and then suddenly, when it’s convenient, start to throw it under the bus and say, I always sort of exaggerated the functionality. The truth is somewhere in the middle.”
What Does This Mean for Marketers?
Marketers must put plans in place to be ready for the phase-out of the third-party cookie.
- Focus on First-Party Data
One option is to get super-focused on collecting first-party data from your customers and prospects. As consumers interact with you across channels, ensure you have methods in place to collect data from these interactions.
Consumers are also willing to provide data in exchange for personalized offers. For example, in one research study by Smarter HQ, 90% of consumers stated they are willing to share their behavioral data if additional benefits are provided that make shopping cheaper or easier.
- Integrate Third-Party Data
First-party data is a marketer’s most valuable asset, but third-party data is close behind. Using a third-party data source, marketers can discover a wealth of previously unknown information as well as correct wrong profile data. For example, data can be corrected such as wrong or missing emails, phone numbers or addresses. Demographics and behavioral insights can also be appended such as age, birthday, income, occupation, hobbies, interests, and so on.
When this is combined with first-party data, marketers can develop rich customer views for more personalized marketing outreach.
- Add Purchase Intent data
Brands may be spending big now on ads that rely on third-party cookies but at Porch Group Media, we have seen many brands switch spend to target actual consumers who are known to be shopping and in market for products and services they sell. Rather than targeting the cookied device and an anonymous user, Porch Group Media has developed proprietary technology that identifies the actual consumer tied to that device.
For example, a cookie can tell if a mobile phone is browsing for furniture online. Porch Group Media’s Signals technology on the other hand can identify an actual consumer by name who is browsing online for furniture, visiting your store website or visiting brick-and-mortar furniture stores, either yours or a competitor’s location. Imagine the personalized marketing brands can then put in place when they know this information and details such as a consumer’s name, income, marital status and more.
With the demise of third-party cookies, marketers will need to rely on data-driven consumer insights in order to understand consumers, anticipate their needs and provide personalized messaging.
Learn how Porch Group Media can help you get to know your customers better and reach them across channels to boost your marketing success. Contact us to get started!