We don’t want to alarm you, but marketers that rely solely on third-party cookies are in trouble.
Google is officially phasing out third-party cookies. Originally slated for 2023, Google recently announced it’s pushing back the deprecation of third-party cookies for a second time to 2024. Without cookies, brands won’t be able to track customer activity or offer personalized marketing.
While marketers now have more time to prepare for this inevitable change, for those brands that aren’t prepared, this change will severely impact their business. . Companies without first-party data will have to spend around 10-20% more on marketing and sales for the same results that they currently achieve with third-party cookies.
By losing third-party data we also lose the ability to target our marketing to the most promising leads. With current market trends, budgets are being pushed to the limit. 2022 has brought inflation to a 40-year high, and many brands are worried about a looming recession.
Gartner writes that CMOs are shifting their spending back to a more bare-bones approach. This is no surprise considering consumer attitudes are getting worse. Now that 40% of consumers believe companies are not absorbing enough costs, acquiring and retaining customers has become even more challenging.
So how can you adapt to this new cookieless world and make the best of your limited marketing budget?
Third Party Cookies are Going Away
As third-party cookies disappear from our toolkits, ubiquitous digital marketing approaches are rapidly becoming obsolete.
Our research shows that companies and customers disagree about the utility of cookies. Even though 78-85% of brands in the US rely on cookies to maintain sales, most consumers no longer use them. 90% of iPhone users have opted out of third-party tracking and other services are following suit. This is a big deal!
What are Cookies?
As a refresher: what exactly are cookies and why do I even need them?
Websites can gather data with two different types of cookies:
- Single-session cookies remember your information as you interact with a website, but disappear once you close that tab or your browser.
- Multi-session cookies stay active even after you exit a website. They are stored on your computer indefinitely or expire after some time.
How Going Cookieless Will Affect Consumers
But most customers don’t want brands in their personal business. .
We’ve found that 81% of consumers feel that the risks of third-party data collection outweigh any benefits.
In theory, cookies benefit consumers by providing them with better product recommendations and targeted content suggestions. However, privacy concerns often outweigh these benefits. 59% of consumers don’t know what companies actually do with their data and 72% believe that all of their online activity is being tracked.
Google’s decision to move away from third-party cookies is one of many initiatives to address those privacy concerns. In 2018, the European Union enacted General Data Protection Regulation (GDPR) and California introduced its Consumer Privacy Act (CCPA). Consumers want to limit which data companies are collecting from them and know how that information is being used.
How can you address these privacy concerns while still learning what your customers want in a cookieless world?
How can marketers prepare for a cookieless future?
Third-party cookies are not the only way to get insights about your audience.
At Wunderkind we have helped over 650 retailers transition away from cookies. Even without third-party data, our clients have:
- Increased revenues by 6-10%
- Improved conversion rates by 2-5%
- Captured 3-5x more emails
How could we possibly do this without cookies?
The answer—first-party data.
Your brand can also achieve these results by following these 3 steps to prep for a cookieless world:
- Shift to Owned Channels
- Reimagine Customer Targeting
- Grow Revenue through Omnichannel Approaches
Shift to Owned Channels
The demise of cookies is just one aspect of a larger problem: reliance on rented channels for company growth.
When you invest marketing efforts into third-party platforms, you lose control. Rented channels like search engines and social media will never fully protect your brand’s interests.
When a platform changes its algorithm, you could lose most of your sales. And even if you are still reaching a large audience, the platform you’re using wants users to stay on its own sites, not click away to yours. Even search results are biased, as in 2020, over 60% of Google searches didn’t result in a single click.
So as third-party cookies are going away, what is going to take their place?
Some marketers are worried that Google may have hidden motivations behind their phase-out of third-party cookies. HubSpot’s Director of Acquisition worries that Google may be “forcing” marketers to depend on their new products such as Chrome’s first-party cookie.
To regain control, shift to owned marketing channels.
Reimagine Customer Targeting with First Party Data
With the rise of first-party data, you can decide what information your brand collects about your customers and how to use it.
The way you collect information could change, but some common types of first-party data include:
- Mandatory Registrations and Sign Up Forms
- Contextual Targeting
- Audience Modeling
When you control where your audience interacts with your brand, you can also determine the best way to collect information about them. You can provide potential customers with context around every bit of data that you gather and ease their privacy concerns as a result.
For example, Clarks, an international shoe retailer, use first-party data to connect with customers via email campaigns. They capture customer information in an internal database through a transparent opt-in process. Then, together with our personalization solution, Clarks provide leads with personalized email funnels based on their past interactions with the brand.
By re-engaging customers who abandoned their carts, Clarks have increased website traffic by 13x and are now generating 11% of their total digital revenue from Wunderkind’s first-party data solution.
Grow through Omnichannel Approaches
In a cookieless future, drive growth with an omnichannel approach.
According to McKinsey, 3 out of 4 US consumers use multiple channels, both online and physical, before they buy. So to gather insights about potential leads on owned channels, you have to get their attention first. Meet your consumers where they are, whether on third-party platforms like Google search or inside of your brick-and-mortar stores.
As you craft new customer journeys and explore alternative avenues to capturing customer data, remember that the best strategy will be unique to your brand. Your omnichannel marketing campaigns should match your business outcomes and the platforms that might work best for you.
From our research, an ideal identity solution can:
- Identify customers
- Establish audience preferences
- Send one-to-one messages
- Work with a variety of channels like email and text
As third-party cookies are going away, a first party data strategy can bring new revenue generating opportunities for your brand.
In this time of turbulent economic conditions, you need to spend limited marketing resources wisely. In a cookieless world, that means truly understanding your consumers. First party data is key to shift away from legacy cookies and capture relevant customer information benefiting both your brand and your consumers.
Download our guide to a Cookieless Future and take advantage of this shift and get ahead of your competition who are probably still unprepared for the upcoming demise of third-party cookies. Activate your first party-data strategy now, and you will be more than ready once cookies go away for good. Learn more from the guide by clicking here.