Marketing Beyond the Cookie with Zero- and First-Party Data

The recent news that Google is restricting cookies for 1% of the people who use its Chrome browser, with plans to fully phase out cookies by the end of the year, ranks among the most significant in the online advertising industry. Cookies, which are a third-party data source, are gathered without having any relationship with the customer whose data is being collected and can be purchased or licensed from a data provider. Until recently, brands have relied on cookies to track website visitors, improve user experience, and collect data for personalization techniques in their marketing efforts to learn what consumers are shopping for.

But stringent legislation encouraged by privacy concerns has left major browsers to phase out cookies, leaving brands to face potential losses of over $10 billion, as reported by the Interactive Advertising Bureau (IAB), as they have become so reliant on this type of data. To navigate this change and avoid losses, marketers are going to have to find new data sources to personalize offers, advertisements, and so much more.

Exploring Alternatives

Google’s demise of third-party cookies poses a challenge for marketers, reducing access to crucial data, which leads to the potential for less precise targeted ads. As a response, marketers must adjust their advertising and personalization strategies while keeping consumer privacy top of mind. The good news is that some data alternatives already exist that abide by ever-present privacy regulations while allowing for more retention, personalization, and relationship-building.

Google has introduced software tools designed to help replace cookies, but many still feel ill-prepared for this drastic change. Other emerging alternatives that have been gaining attention are:

• First-Party Cookies: Established and reliable, these are set by the website and store user preferences and browsing history for a personalized experience that reduces privacy risks, improves browsing, and provides valuable insights for brands.
• Device Fingerprints: While accurate, the concern is the need for responsible handling. This method utilizes device-specific information to create a unique identifier, providing insights into consumer behavior without relying on cookies.
• Contextual Targeting: Effective for reaching target audiences interested in specific topics or products, ads are displayed based on webpages, eliminating the need to track user behavior.
• Mobile Advertising IDs: Here, unique identifiers are assigned to mobile devices, enabling precise targeting. Although effective for highly targeted marketing campaigns, this raises privacy concerns, necessitating transparency and opt-out options.
• Universal IDs: Unique user IDs, digitally created on user information, allow for cross-platform tracking, enable personalized ads, and facilitate cross-platform information exchange with careful consideration for user privacy.

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Zeroing in on Zero- and First-Party Data

Arguably, the best alternative to third-party data is zero- and first-party data, which is shared or collected through direct interactions with customers – such as through polls, surveys, and chats. This ownership of zero- and first-party data gives brands access to an individual customer’s interests and preferences for a more personalized and intimate relationship with customers for a competitive edge in the market.

But turning to this data source not only helps brands, it protects consumers. It’s no surprise that consumers want more privacy and control over how their data is used when browsing and shopping online. Eighty-six percent of consumers care about data privacy and demand transparency and control over how businesses use their data, and 47% have switched companies due to poor data policies and practices, according to a study by Cisco. Zero- and first-party data is given voluntarily from the consumer to the brand – meaning it is consented to and transparent.

These data sources are a goldmine for brands seeking to enhance customer experience and drive loyalty in a privacy-conscious era. Third-party data, like cookies, only allows for so much personalization because it is often focused on segments of the population within a specific geography. On the contrary, zero- and first-party data follows the individual, meaning every interaction is used to develop a personalized offer unique to that person.

When it comes to collecting this data, owned channels will be critical. As an extension of a ​brand’s​ e-commerce site, owned channels, like a brand network or community, bring dedicated customers together, where they can share honest reviews, recommendations, and insights. With this information, brands possess all the necessary elements to tailor personalized offers, exclusive content, and special promotions based on engagements and purchase history to stay top of mind. As they collect and use this data, brands are delivering a more captivating and tailored journey for customers while encouraging brand loyalty and increasing the bottom line.

While many see the disappearance of cookies as detrimental, brands must realize that there are new and untapped opportunities for every change in the status quo. Brands that embrace innovative solutions to this problem will be better positioned to build loyalty, get more shoppers into their pipeline, and increase customer retention for years to come.