Jonathan Airey, Director, Customer Success APJ, Tealium, tells Intelligent CIO how a new approach to data collection will encourage consumers to provide information with real value and build trust.
COVID may be the acronym of 2020, but the truth is that the last few years have been littered with a slew of these, each signalling doom for digital marketing in its own way: GDPR, ITP, ETP, CCPA, IDFA.
After all this, we’ve finally reached the ultimate acronym: RIP. And it’s got nothing to do with the pandemic.
The third-party cookie apocalypse is upon us. Though it’s not until 2022 that its long-foretold death will happen, marketers need to start preparing for its loss today. It is the canary in the coal mine for the challenge CMOs will face in the future: A loss of data coupled with the need to increase digital advertising to remain competitive through a period of rapid Digital Transformation.
The way the cookie crumbled
Third-party cookies have come under more scrutiny lately as consumers are increasingly concerned about privacy and with personalization being a crucial part of the customer experience.
According to the Australian Community Attitudes to Privacy Survey 2020, seven in 10 respondents nominated privacy as a major concern for them. 87% also wanted more control and choice over the collection and use of their personal information. Additionally, more than half of us (52%) state that companies are generally impersonal and feel a wide gap between expectations and delivery.
Unlike their first-party counterparts, third-party cookies enable cross-site data tracking for a technology solution that may have originated from one domain but collects data from many. They follow us around for the purpose of cross-site tracking and are critical for providing a smooth web experience, on a specific domain, for a specific brand or technology.
Such capabilities have made it easier to display more relevant advertisements to more relevant audiences. But for all their uses, third-party cookies have been an imperfect tool for marketers and have led to several recurring problems, such as wasted ad spend and wasted time in incremental frequency capping and suppression activities.
Third-party cookies are time-bound and domain-specific, so advertisers have to constantly dial-down KPIs and adjust their expectations for the best targeting. The cookie also wasn’t designed to serve as the legacy foundation of the modern digital ecosystem by allowing brands to buy publisher inventory yet is used to do so. Correlating to devices, rather than the consumer, does not allow for a personalized experience.
Upwards of one-third of the data companies used to collect is already gone because other browsers like Apple’s Safari and Mozilla’s Firefox have already closed off access. For many, it’s a welcome change. The demise of the cookie is a huge opportunity to establishing more direct and meaningful relationships with consumers.
Preparing for a first-party data future
So how do brands futureproof themselves for a post-third-party world?
By way of first-party data.
First-party data is a collection of events and information collected directly from customers, by your brand, based on what they’re doing and how they engage with your product, app and website.
It’s data that’s given with consent and is more accurate than third-party data sources. It’s the data your audience is giving directly to you. This gives you the power to analyze how consumers interact with your brand so you can improve the experience you’re providing, both holistically and individually.
2020 was a watershed year for the transformation of the importance of first-party data because brands came to realize that with this information, they can govern data use according to customer consent and not have personalization of the customer experience suffer as a result.
The move towards first-party data means brands will have to reimagine parts of the customer experience. If businesses can collect and activate first-party data, the brand then creates its own unique data pipeline which becomes the lifeblood of effective advertising and great customer experiences, even after the loss of the third-party cookie.
Shifting to a first-party data strategy will likely be driven by a Customer Data Platform (CDP) which makes it easier to aggregate a single view of the customer and action insights. There is no single replacement for third-party cookies, so CDPs and the like need to be supplemented with the right technologies. You need to invest in a solution that handles customer information, meets privacy compliance and promotes cross-channel personalization the best way for your brand.
Once you have an understanding of the first-party data you are using and how you’re going to do it, the next step is to change the reality of the work environment by educating and preparing employees for a first-party data future. Arguably, this is the make or break of your first-party data strategy. What’s the use of having a car if you can’t drive it?
Building trust in your brand with consumers
First-party data is worth its weight in gold, but the customer doesn’t just willingly hand this over without getting something in return. First-party data is a direct value exchange, so customers need to understand why they’re giving marketers their data and that convincing will take a unified group within organizations to achieve.
The brands that will be most successful in building trust with customers are the ones that present the choice of data profiling and usage genuinely and articulately. If brands can show that they are responsible with customer data and are using it to improve their experience, rather than just the bottom line, customers will be more likely to trust and remain loyal to them.
For example, ask-and-answer formats are great ways to facilitate clear and direct value exchanges (consumer information for exclusive content or discounts). Social experiences based on user-generated content can provide valuable insight on audience behavior, likes and dislikes. Gamification is a tried and tested method for getting personal data as well. Overall, interactivity is key. If businesses are able to get first-party data in a compliant and effective manner, they’re on the path to getting the first-party data strategy right too.
If 2020 was any indication, now is the time to establish new ways of working. CMOs need to address the evolution of digital advertising now and need to be thinking about maintaining performance over the next 12 months as we see third-party cookies come to an end.
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Start by implementing new data collection approaches to encourage consumers to provide their information with a value exchange that can be maintained and ensure the whole business can do this well. While 2022 may seem far away, now is the time to build trust in your brand with consumers.