Third-party cookies are now on the verge of obsolescence due to the growing number of privacy-conscious consumers, writes Nicholas Kontopoulos. Marketers need to switch strategy.
For years, third-party cookies have been a crucial component of digital marketing strategies in Australian organisations. However, they are now on the verge of obsolescence due to the growing number of privacy-conscious consumers. Over the past decade, these cookies have mainly monitored users’ online activities across diverse websites, provided valuable insights into consumer behaviour and preferences, and enabled targeted advertising.
With the impending phase-out of third-party cookies by Google Chrome in 2024, following similar actions by Safari and Firefox, a significant transformation is unfolding in the Australian data environment. Moreover, the emergence of regulations like GDPR in the EU, along with proposed comprehensive reforms to Australian privacy laws, is placing increased responsibility on organisations regarding the collection and use of consumer data. Nonetheless, this is the current landscape, and today’s marketers must adapt to these evolving circumstances.
Based on Twilio’s recent survey of marketers, it’s encouraging to note that 83% of organisations in Australia are championing consumer data privacy and embracing the transition, despite initial scepticism about phasing out third-party cookies. However, with these cookies no longer in the jar, how should brands enhance their customer engagement strategy?
The good news is that the demise of third-party cookies offers brands an opportunity to cultivate greater trust through alternative data sources, particularly zero- and first-party data, enabling marketers to shift from generic personalisation to more tailored customer engagement.
How zero and first-party data can help
The extent to which brands can customise experiences largely hinges on their familiarity with individual customers. Insights voluntarily shared by customers through direct feedback channels and surveys — also known as zero-party data — can significantly enhance this aspect.
For instance, e-commerce stores can gather information about customers’ favourite activities, product interests, and budget preferences. Armed with zero-party data, brands can craft profiles of each customer’s inclinations and send personalised emails featuring tailored product recommendations aligned with each customer’s unique needs. Such an approach fosters trust, strengthens customer relationships, and cultivates heightened customer loyalty.
Some Australian brands are already leveraging zero-party data to great effect. For example, beauty retailer Mecca used its Mother’s Day gift finder quiz to ask customers what type of shopper they are, ranging from a beauty novice to a beauty lover. The responses help Mecca marketing teams segment customers and adjust email frequency accordingly, only sending emails relevant to customers’ interest in the products.
While third-party cookies may have exited the scene, first-party cookies remain relevant. This implies that, in addition to zero-party data, brands can tap into behavioural data gathered passively from their websites and other owned platforms. Marketers can leverage the fact that consumers are generally amenable to sharing personal information for the sake of enhanced experiences — nearly two-thirds of Australian consumers (62%) are comfortable engaging with brands that directly obtain data from them, rather than through third parties.
Moreover, third-party data sources may not always be dependable: numerous marketers, including myself, have witnessed a decline in the quality and depth of data collected via third-party cookies, due to stricter regulations, browser limitations, and the rise of ad-blocking software. It is no longer practical to depend on the same third-party attribution models we’ve been using for years. Brands that have already integrated zero- and first-party data into their marketing strategies — well before the third-party cookie phase-out — are ahead of the curve.
Innovate to deliver individualised experiences
As consumers seek improved experiences, their concerns about how organisations collect and use their data come to the forefront. With consumers more open to brands directly collecting data from them, marketers can leverage server-side tracking for enhanced data control, more effective monitoring of customer behaviour and assured data capture. Server-side tracking can illuminate aspects like consumer use of product features and usage frequency — allowing brands to glean profound insights into each user’s preferences and needs.
Individualisation revolves around tailoring experiences to the individual customer, rather than treating them as part of a larger demographic. Possessing the capability to amass and organise first-party data — comprising website analytics, purchase history and CRM data — is already a substantial step forward.
Customer data platforms (CDPs) provide marketers with an edge in collecting data from diverse sources and connecting it to individual customer profiles, even when customers are not logged in or use varying email addresses in their interactions with a brand. Given customers’ tendency to switch between devices and platforms, CDPs facilitate the identification process by streamlining clean data within a complex, multi-channel environment. However, beyond customer identification, syncing customer profiles is crucial to achieving a comprehensive perspective that serves as the bedrock for delivering consistent, individualised customer experiences.
In the emerging data era, successful brands will be those capable of showcasing clear and honest communication, ethical handling of consumer data, and the unwavering delivery of value. Embracing novel technologies without hesitation and daring to experiment with fresh strategies empowers brands to maximise the potential of data as they progress toward individualisation, especially amid the decline of cookies.
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