The end of cookies has been looming on the horizon for digital marketing for some time now.
We have enjoyed the benefits of pixel tracking to gather user behaviour data such as how they browse, what type of ads they click on, and what type of websites they visit. This data is used to create retargeting ads to warm up cold leads and guide them along the path to purchase. But with the recent iOS privacy changes and Google phasing out 3rd Party tracking soon, remarketing based on user behaviour is becoming increasingly difficult.
In this post, we’ll expand more on how to future-proof your business against fewer cookies, and more first-party data. But first, let’s look at a brief history and dive into the why…
Increased consumers’ concern about privacy
According to a Ponemon Institute study, 86% of adults said they’re “very concerned” about how Facebook and Google use their personal information”. Two-thirds said they’re “very concerned” when shopping online or using online services.
Now that we spend more of our lives online, many people are becoming concerned about where their data ends up, how their information is used and the potential for data security breaches. Tracking used to be the default, and privacy was optional, but we’re moving towards a world where privacy is the default and tracking is optional.
Strict regulations are being put in place to protect customers and increase businesses’ transparency using customer data. In other words, the advertising platforms that we enjoyed and made money from will be more challenging to manage and potentially more expensive to use.
What does stricter regulation mean for you?
Businesses rely on ad targeting to deliver relevant ads to consumers across the web. This has led to sharing of individual user data across thousands of businesses, typically gathered through third-party cookies.
As a result, internet users have begun to lose trust and are reluctant to share their information. They feel that advertisers are tracking everything they do online, and the potential risks they face due to data collection outweigh the benefits.
Tech giants like Google, Facebook, and Amazon are addressing consumer privacy concerns by removing 3rd party tracking and encouraging businesses to switch to 1st party data.
Apple responded in April 2021 to consumer privacy concerns with its iOS14.5 privacy changes, which allow users to opt-out of Identifier for Advertisers (IDFA) based tracking. The new requirements in the latest update require developers to get express consent from device owners to allow their IDFA to be shared and collected across apps. And although users can opt out of letting apps track them, app developers can still use other information a user provides for targeted advertising. However, that information can’t be shared with another company for ad tracking, highlighting the importance of first-party data.
Google has announced that Chrome will remove support for third-party cookies and that they will come up with solutions to protect anonymity while still delivering results for advertisers and publishers. Google realises that brands need to focus on developing strong, direct connections with their customers in a privacy-first world, which means first-party relationships will be vital.
First-party cookies are here to stay. These are cookies generated by the vendor that owns the website and provide a better user experience. In the phase-out of third-party cookies, you’ll still have access to all of your first-party cookies and data. This will become critical data for you to feed into the ad platform algorithms.
Most web browsers like Mozilla Firefox and Safari have already made a move.
However, the dominant Google Chrome keeps pushing back the deadline for phasing out third-party cookies (it was March 2022, and now it’s in 2023). We don’t know when it will happen, but we’ve got a feeling it will come soon.
Check out our free webinar, Cookie-less Future; Half-Baked Marketing Won’t Do.
The future of programmatic advertising
Display ads ensure businesses send target audiences personalised brand messages based on their web activity and help marketers gain a higher ROI on their ad spend. Programmatic advertising reduces the time it takes to find, engage, and convert the right customers using third-party data.
The ACAC estimates the size of the programmatic ads channel in Australia to be $1.7 billion.
Ad-tech platforms have confirmed the demise of third-party cookies will result in the loss of granular targeting of ads to the level of an individual. They say that it impairs their ability to make revenue by selling services like audience segments, behavioural targeting, etc.
How to prepare your e-commerce business
To ease the transition to cookieless eCommerce, you should consider how tracking, targeting, and retargeting will be affected.
The maxemus team are assisting clients in shifting all marketing decisions based on aggregated data. And it’s all due to the third-party cookie phase-out.
Retargeting is going to be more complex and sometimes impossible. The approach to ad serving will change – simple as that! Ad platforms are working on alternatives for targeting cohorts, but those solutions seem far from ready (like Google’s FLoC).
If a user doesn’t allow you to track them in an app and block third-party cookies, then there’s no way to serve a targeted ad to that person. So sadly, there isn’t much you can do but depend on each ad platform and their black box to sell your products and services.
Some of our recommendations include:
- Look at a higher level rather than at a user level.
- Do more baseline modelling and tracking. Ask, “What would happen if I didn’t do this campaign?”
- Do more brand campaigns and try being more local.
- Implement Google Analytics 4
Develop a first-party data strategy
As third-party data phases out, focus on gathering first-party data to guide your marketing campaigns. Because eCommerce brands directly interact with their customers, they have a head start for first-party data collection. While you’ll need consent to gather customer data, you can give them value in exchange for their information. For example, you can offer exclusive pricing or offers, early access to new product launches, in-store discounts, or competition entries.
Focus on contextual targeting
But what if first-party data isn’t enough? How do you reach people who haven’t permitted you to gather their data? To reach new audiences on a greater scale, you must turn to contextual advertising, which involves placing ads on web pages based on the content of those pages. This allows you to reach the right people at the right time in the right place.
Some examples of contextual advertising include:
- Google AdSense
- Keyword targeting
- Native advertising
- In-video contextual advertising
Use other forms of personalisation
Cookies aren’t the only way to gain insights into online user behaviour or create targeted personalised campaigns. You can leverage other forms of personalised marketing like geotargeting and moment marketing, geotargeting and location-based messaging. Moment marketing allows your ads to appear at the right moment. You can show your ads to shoppers who are engaged and actively looking for products and services like yours.
Explore data clean rooms
With the loss of third-party cookies, user data will be trapped within “walled gardens” like Google and Facebook. You can still use this data, but only on the platform’s terms. You can analyse data within these clean data rooms and use it to segment audiences, analyse reach and frequency, and analyse different attribution models.
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