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03/14/2022

Why the Death of the Third-Party Cookie Is Good for Brands and Consumers

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First-party data

Google made major waves when it announced it would be eliminating cookies, which track users across the web and devices, producing third-party data used to target consumers.

Although the company put a short “stay” on the death of the third-party cookie, pushing out the timeline to withdraw support for third-party cookie data as part of its Privacy Sandbox Initiative to 2023, time is running out for brands that still depend on this data to power their marketing campaigns. 

However, it’s not just Google that’s embracing the consumer privacy revolution. Apple’s Intelligent Tracking Platform (ITP), which first launched in 2017, also blocks third-party cookies in its Safari browser or deletes them in a short timeframe.

This accelerating movement to protect consumer’s personal data initially took shape with regulations and privacy acts such as GDPR in the EU, followed by the California Consumer Privacy Act (CCPA), which was subsequently expanded by the California Privacy Rights Act (CPRA), which goes into effect in January 2023. 

On a federal level, the U.S. now requires websites to explicitly ask the first-time visitor to agree to being tracked. The current state of the global regulatory landscape raises serious challenges for cross-site tracking and the use of third-party data.

After years of companies profiting from mining, then selling consumer data, individuals now hold more power over their personal data than ever before. They still want their shopping experiences to be highly personalized — they just don’t want their personal data to be misused and corporations to profit from it. Welcome to the complex world of e-commerce and digital marketing in 2022!

Retail brands must revamp their personalization strategies and with a compelling alternative to third-party cookies so they can meet the needs of their customers who have come to expect individualized shopping experiences without compromising their data privacy. 

The good news for marketers is that delivering a great experience can be accomplished without the use of browsing data from various web pages and without resorting to basic segmentation tactics. Marketers must embrace and make the pivot to first-and zero-party data, and sooner rather than later. Let’s examine how marketers can leverage both types of data to supercharge their personalization and customer experience initiatives for better ecommerce outcomes.

Using First-Party Data to Capture Shopper Intent

First-party data comes from a variety of systems, including CRM, website analytics, product usage and the company’s knowledge database. One attribute these data sources have in common is they enable brands to get to know their customers better. By utilizing the insight from all data points combined, brands can build a comprehensive 360-degree view of the customer.

As the primary source to build and deliver personalized experiences to consumers, first-party data is a powerful tool that can drive contextual personalization by capturing the context of the shopper’s current intent, which can be based on referral data, local weather, and even geo-location. The on-site shopper journey, from what they clicked on and added to their basket, to how long their mouse stayed on certain products, can be insightful and provides a glimpse into a customer’s psyche.

Effective Zero-Party Data Strategies

As useful as first-party data is, zero-party data — a category created by Forrester which they define as explicit data that customers intentionally and proactively share with companies is critical to powering ecommerce and digital marketing initiatives. Zero-party data comes directly from customers, with their permission, which makes it a powerful data source. Visitors share their personal information with the knowledge that it will be used for their benefit (and not for the brand’s profit). 

This primary data source also enables retailers to get to know their customers better and has the following attributes, including:

  • Compliance-friendly: Zero-party data is provided with permission by the customer and presents little to no risk because of permissions and the way it was collected.
  • Totally transparent: The data disclosed is based on an agreement between the customer and the brand. Consumers are aware of the information they are providing and how it will be used. This gives the customer the power to decide what they’re willing to share.
  • Accurate and high-quality: One key drawback to third-party data is its lack of accuracy because it’s outdated or incomplete. Zero-party data is provided directly from consumer-to-brand so the accuracy is almost assured. However, retailers are responsible for asking the right questions, in the right way. 

One risk to zero-party data collection is overwhelming the customer by asking too many questions at once — this could introduce some friction in the shopper’s journey. To avoid the potential for friction, spread out your requests for information. That brings us to two best practices for capturing zero-party data:

  • Self-segmentation: This technique involves asking customers to tell you which audience segment they belong to. Brands will gather the most accurate information by tailoring the questions and suggested segments, avoiding ambiguous language, unclear categories, or subjective assessments.
  • Consumer Surveys: Surveys are a powerful way to gather customer information about a visitor’s preferences, including their wants, needs, and likes. For example, as depicted in the graphic below, shoppers can share their preferences about the types of products and product categories they’re most interested in. 

The bottom line is this: Marketers who depend on third-party data, from cookies and other sources, will need to consider and prepare for the inevitable “death of the cookie” in 2023. The retailers that prioritize first-party data sources from customer journey data, or zero-party data, which customers intentionally and proactively share with companies, will be well-positioned to weather the change. Brands that rely heavily upon third-party data will face a myriad of challenges as they lose access to cookie data and will soon realize just how important it is to “own” their customers.

—Tracey Ryan O'Connor, group vice president, Commerce, Coveo, has been in the world of digital marketing, e-commerce and personalization for 20-plus years at companies such as Reflektion, Neustar, and Oracle. Most recently she was chief revenue officer at personalization platform, Qubit, where she was responsible for sales, solutions, marketing, customer success, and strategy. In October 2021, Qubit was acquired by Coveo, a Relevance Platform and applied AI leader that transforms digital experiences with AI-powered search, recommendations, and personalization. 

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