First-party Data Is The Key To Remaining Agile In A Cookieless World

In the MarTech space, signal loss is a hot topic right now. About 30% of all browser traffic is third-party cookie-challenged and that number is expected to increase to around 80% by 2024 when Google phases out third-party cookies in its Chrome browser . significantly affecting how brands can reach consumers NOW. Solutions do exist, but marketing professionals must be savvy and knowledgeable on the steps they need to take to mitigate signal loss.

 Here, Tealium discusses the topic and next steps for companies implementing first-party data solutions amid third-party cookie deprecation.

_________

Digital marketing and analytics teams face new challenges in collecting customer data today. Currently, about 30% of all browser traffic is third-party cookie-challenged and that number is expected to increase to around 80% by 2024 when Google phases out third-party cookies. Changing consumer behaviors and an increased focus on privacy contribute to businesses having less insight to advertise to potential customers and measure the impact of those efforts meaningfully.

Companies have recently begun investing in their first-party data strategies instead of relying solely on third-party cookies. According to a recent Tealium report, first-party data is the primary data source for all companies, with third-party data considered more of a “middle-of-the-road” source.

To stay relevant, brands must better respect privacy preferences, which initially triggered the cookie deprecation wave, and adopt alternative data strategies that do not rely on a single data source. First-party data strategies can play a critical role in balancing sales and meeting customers’ needs.

First-party data comprises events and consented information collected directly from customers based on their interactions with a brand across all channels, including apps, web browsers, rewards programs, and more. However, for those unprepared, the loss of third-party cookies will have significant business implications. For marketing practitioners, it is expected that 70% of ad spend attribution will decrease, and return on ad spend (ROAS) is anticipated to drop by 20%, making overall marketing and advertising measurement more challenging. Many of these issues can be attributed to increased tracking restrictions on third-party data, resulting in signal loss.

Marketing Technology News: MarTech Interview with Tobyn Sowden, CEO at Redbrick

But, there is no need to panic; instead, pivot. To better prepare for the deprecation of third-party cookies, brands can take several steps to future-proof their business:

1. Establish a strategy with first-party data as the foundation. Building a strong foundation with a focus on data collection, identification, and consent will not only help businesses obtain more accurate data and build better customer relationships but will also enhance trust. Using data obtained directly from customers will enable more accurate, strategic, and personalized marketing efforts. Fortunately, many businesses likely already possess a robust repository of first-party data, including rewards programs, email opt-ins, and taking advantage of perks and specials, where customers have given their consent.
2. Embrace a flexible data supply chain that incorporates both client- and server-side collection. Third-party cookie deprecation has shifted the reliance from client-side data collection to server-side collection. To maximize the potential of your data, it is crucial to integrate both sources. Client-side tracking, typically achieved through tags, offers access to contextual data and ease of implementation but heavily relies on cookies. Research by Zion & Zion suggests that relying solely on client-side pixels leads to missing between 32% and 37% of conversion events. Harmonizing client-side with server-side tracking provides greater flexibility. Server-side tracking offers more control, accuracy, reliability, and leverages the cloud to enhance the customer experience.
3. Reduce signal loss and optimize marketing initiatives through Conversions APIs (CAPIs). CAPIs restore signals that would otherwise be lost due to third-party cookie deprecation. This is achieved by improving the connection between data and the various channels through which consumers engage with a brand. Implementing a conversion data strategy strengthens the data supply chain and offers numerous advantages, including enhanced ROAS and conversion visibility, improved data security and governance, streamlined data collection and optimization, and enhanced measurement and insights. Partnering with customer data platforms (CDPs) that integrate with media platforms using CAPIs can be a critical and successful approach to enhancing a first-party data strategy.

With reduced marketing budgets, signal loss, data deprecation, and increasingly stringent privacy regulations, it is undoubtedly a challenging time for marketers. However, by remaining agile and adopting a data-first approach, businesses are more likely to not only survive but thrive in this challenging environment.

Marketing Technology News: Top 10 Digital Marketing Tools for Busy CMOs