Cookiepocalypse is Coming: Enterprises Must Work Together If They Want To Stay Ahead Of The Competiton
Cookiepocalypse is coming. Google parent Alphabet is phasing out third-party cookies on its Chrome browser to “fundamentally enhance privacy.”
This seismic shift will change marketing and customer data strategies landscape.
Businesses depend on the data gathered by tracking browsing habits through third-party cookies to shape digital marketing and advertising campaigns, product development and consumer experience programs. However, the reliance on cookies gives businesses only a partial view of a person’s online behavior; the lack of authenticity and completeness results in significant errors when determining their customers’ true habits.
Marketers and product managers may feel they have a stay of execution since Google has delayed its plan until next year. However, rather than breathing a sigh of relief, they should be using this time to change their data strategy fundamentally. Enterprises looking to stay ahead of the competition should start making changes immediately. They need to be a first mover. It will be too late it if they wait for Cookiepocalypse.
An obvious place to start is first-party data. This information, byte for byte, is more valuable than third-party data since it comes directly from the brand’s customers. It is far more authentic and, therefore, far more likely to provide more meaningful and actionable insights to act upon for improving CX goals.
Users also tend to be more comfortable in sharing their data with enterprises, such as their banks, telecom service providers and go-to retailers in exchange for enjoying highly personalized experiences and services.
While research from Experian confirms that 85% of businesses currently see data as their primary asset, the pending Cookiepocalypse is accelerating the urgency for companies to gather and harness first- party data.
Companies need to remember that their customers are also customers of many other enterprises, often purchasing the same or similar goods and services from multiple businesses. Consumers’ behavior, needs and wants are revealed through a combination of their interactions with multiple enterprises, not just one.
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If enterprises could consider their customers’ interactions with all other enterprises as well as their own, they would generate a much deeper and accurate understanding of their customers’ behavior and needs. This would, in turn, enable them to optimize their CX decisions and actions to maximize Customer Lifetime Value.
There are obviously challenges. The phasing out of anonymized, third-party cookies, as well as Apple altering the rules for its identifiers for advertisers (IDFAs), is focused on protecting consumer privacy. Their actions also come against a backdrop of tightening privacy regulations and regulatory enforcement, such as Europe’s GDPR, and CCPA and CPRA in California.
Given this context, any solution must have the preservation of data privacy at its core, otherwise firms are likely to face the wrath of not just regulators but customers, who have an increasingly deeper understanding of the value of their data and a fundamental desire to protect it. If firms get this wrong then they risk eroding trust, which could be even more damaging than the loss of data from cookies.
Privacy-preserving artificial intelligence (AI) can solve these challenges. AI and techniques like encrypted data processing and federated learning can be integrated to enable firms to collaborate in ways that weren’t feasible just a few years ago.
This technology allows two or more B2C companies to collaborate and share intelligence on common customers’ usage behavior while upholding consumer privacy. None of the companies have access to the other’s raw data, however they can still derive accurate behavior insights of their common customers, empowering them to take the appropriate actions to mitigate churn and inactivity.
As we inch closer to the launch date of Cookiepocalypse, more of the first movers will embrace this shift to a privacy-preserving AI approach, not as a challenge, but as an opportunity to accelerate away from the rest of the pack and maximize Customer Lifetime Value.
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