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The Cookieless Future of Marketing is Coming

It's time for marketers to say goodbye to third-party cookies. 

In response to consumer privacy concerns, major browsers are introducing new rules. Google originally announced that third-party cookies would be eliminated two years from 2020. That deadline was later extended to 2023. 

However, companies have no time to waste. A cookieless marketing strategy is essential now! 

The cookieless future of marketing is coming.

A cookie is a small snippet of code that contains data. 

First-party cookies come directly from the domain the user is visiting. These are extremely useful because they can keep track of information like items added to a shopping cart and login information. First-party cookies aren't in danger of being discontinued anytime soon. 

Third-party cookies, however, will be phased out entirely. Third-party cookies get their name because they come from third-party websites. 

Let's say a customer visits a shoe website. Next, they visit a site like Amazon. Third-party cookies mean the customer might see shoe advertisements while browsing Amazon. This data sharing makes it much more difficult for customers to figure out who has their data and what they're doing with it. 

Without third-party cookies, marketers will need to learn new ways to amass data on their old customers and target new ones. They'll also need to make sure they're using closed-loop attribution to gauge the success of their new methods. Are your ads effective when you show them to customers based on geographic data? What if you sort customers by age instead? Once you know this information, you'll know if your advertising budget needs tweaking. 

There are a couple of different ways to adapt to a cookieless future, from figuring out how to collect and parse more first-party data yourself to utilizing zero-party data aggregated by an outside company. 

"To keep up with people's expectations around privacy and relevancy, businesses must innovate their data practices, including being transparent about how and why they use customer information, providing better value across the consumer journey and treating data respectfully once it's received," explains Jan Hofmann-Cassiani, a product marketer for Facebook (APAC). 

The problem with cookies

The internet is shifting away from third-party cookies for many reasons. Companies don't need to fear this change because, ultimately, cookieless advertising benefits brands and consumers. 

One of the biggest problems with third-party cookies is inaccuracy. You can receive information about particular customer segments, like 18 to 34-year-old males or people who live in California, but there's no way to tell if the information is still accurate.

For instance, someone on the list of California residents may have moved to a new state. Information often isn't updated as it becomes outdated. 

Or, the data may never have been correct. Third-party cookies are a blunt tool, meaning there's a lot of room for inaccuracies. The information that you receive may not be properly vetted. 

Third-party cookies are also being curbed by regulations. Europe's General Data Protection Regulation and California's Consumer Privacy Act are two major pieces of legislation designed to give consumers more control of their data. 

You may have noticed a banner asking your permission to track cookies on certain websites. Companies do this to make their sites compliant with GDPR rules. According to the GDPR website: "Companies do have a right to process their users' data as long as they receive consent or if they have a legitimate interest."

A 2018 survey by BDO found that eight in 10 companies had taken steps to become GDPR-compliant. Nearly a third of those companies had increased their data privacy budgets. 

What does a cookieless future really mean?

Whether you want it to happen or not, third-party cookies are becoming obsolete. For many companies, this means that a complete change of their data-driven marketing strategy is necessary. The old methods just aren't reliable anymore. 

Without third-party cookies, companies will need to figure out new ways to track the success of their marketing campaigns. Multi-touch attribution, for instance, tracks customer engagement across the internet to see what drives sales. Do customers make their first sale after signing up for an account on your site? After they see an ad on another site? 

This kind of attribution is no longer possible in a cookieless world.

Third-party cookies also affect campaign personalization. If consumers have control of their data, you can't gather information about them without their consent. Yet, personalization is critical if you want your brand to succeed. Customers respond better to personalized marketing campaigns. 

Your audience reach may be affected by a cookieless world as well. Third-party cookies allow your brand to advertise on sites beyond your own without having to contact the third-party site directly. This can significantly expand your brand's reach. 

If your company doesn't solve these problems, your future advertising efforts might be wasted. 

Brands might be apprehensive about a cookieless future because it will necessitate changes to their current way of doing things. However, you may find that you develop stronger relationships with your customers when you stop using third-party data and instead switch to ethically sourced first-party or zero-party data. 

Cookieless solutions

You don't have to rely on third-party data. 

You can collect better data yourself or use quality data harvested by another company. Many companies use both. 

When you stop using third-party data, you can focus instead on first-party and zero-party data. These are similar concepts that hinge on consent. 

First-party data is provided directly to your company by the consumer. This might be personal information they enter on their customer registration page or on a survey found on your website. Or it could be information related to their page clicks, shopping cart, etc. Any data that your customers willingly provide to you is first-party data. 

First-party data is beneficial, but it has limits. There's a lot of information that you simply can't access because there's no way to ask. It isn't easy to figure out a customer's income and buying history, but it's valuable information if you sell high-ticket items like planes or boats. 

Zero-party data is also data that your customers provide willingly. However, the process is even more explicit. Nothing is inferred. For example, first-party data might tell you that a customer is interested in red shoes because they clicked on that product page. 

Zero-party data, however, would tell you that a customer's interested in red shoes after asking about their most recent shoe purchase. The customer freely gives the information in exchange for something of value. You might tell your favorite brand your birthday if you knew you would receive a birthday discount. 

The most significant advantage to using zero-party data is its reliability. You know that you can trust the information 100% because it's coming directly from the customers, and you don't have to make any guesses. Your customers are happy because there's complete transparency. They know who they provided the information to and why. 

Future-proofing your business

Protect your business from future privacy challenges and start using zero-party data. There are so many advantages to this style of data collection that it would be helpful even if third-party cookies weren't being eliminated. 

Although customers agree to give up their information during zero-party data exchanges, they don't have to give up identifying personal information. You can use unique identifiers that are compliant with data privacy laws. 

Zero-party data is also prized by marketers because it's possible to collect a lot of it. If you offer consumers something sufficiently valuable, they're willing to tell you everything that you need to know. A birthdate might be worth a coupon, while access to banking data is likely worth a larger incentive. 

All of this data allows for greater personalization. You can segment your customers into runners, swimmers, pet owners, etc., depending on your business needs. This targeting will actually work because it's precise. You know that this group is made up of pet owners because they told you, and you know that they're interested in buying pet costumes because they indicated that they love dressing their pets up for the holidays. 

Using this data leads to closed-loop attribution. Now that you know who wants a dog costume, you can send them ads for your latest puppy superhero cape. You'll know if these ads increase sales and by how much. 

Klover can help

You don't need to collect zero-party data yourself to run a successful marketing campaign. 

Klover can help you access troves of quality, deterministic customer data. Consumers share their banking data with us in exchange for access to financial services. This gives us valuable information about where they work, what they spend money on, their income level, etc. 

Interested marketers can access Klover's zero-party data through our Curated PMP offering. 

Start preparing for a cookieless future now. Contact Klover today at info@joinklover.com

Josh Lamb
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