Life after third-party cookies for brands

Over the past few decades, much of the customer online experience has been crafted using third-party cookies. The tiny snippet of code helped customers receive more relevant campaigns, advertisers see a measurable return on investment, publishers earn more money, and brands better retarget their audience. However, in the past few years, there is a growing concern that digital marketers were too aggressive and stalk customers on every device and browser, sometimes at the cost of their privacy. In response, major tech players have phased out or announced to end support to third-party cookies. Privacy regulations have also given customers a choice to opt out of optional cookies.

Bidding goodbye to third-party cookies

First, let us be clear that first-party and second-party cookies are here to stay. Third-party cookies are being phased out. As the digital advertising world is built on third-party cookies, the move represents nothing less than a structural transformation. A range of digital marketing tactics (retargeting, lead generation, and lookalike modeling) perfected over time will be at risk. 

What will happen now? The implications of the change

Let us see how this change will affect four key stakeholders in the value chain.

Customers  

They will have more control over the data they share with different companies. They will also be able to choose which brands use their behavioural data. Customers who have visited a specific brand’s website will continue to receive personalised messaging. However, the downside is, outside the specific brand, one might end up with more generic and irrelevant campaigns.

Advertisers 

The immediate impact is that the cookies will start expiring, leading to a diminished size of third-party audiences that is not scalable for media buying activities. Advertisers will have to develop new strategies for prospecting, collecting, and aggregating audience data without third-party cookies. The adoption of Cleanrooms will increase as they can be used to understand data and acquire customers after third-party technologies are put to an end.

Publishers 

Digital publishers generate a significant proportion of their revenue by partnering with third-party data providers. With the ban on the use of third-party cookies, digital publishers will be affected in the short term. They will require to develop new strategies from the large audience data they produce.

Tech companies 

Most tech giants have announced sunsetting browser support of third-party cookies. Martech companies are building advanced customer data platforms that can create a holistic view of customers and prospects without compromising privacy norms.

Mapping the path forward

The promised land of digital marketing is customers understood and treated at a personal level by brands, who also respect their privacy concerns. Forward-thinking marketers are re-evaluating their Martech stack, methodologies, processes, and skills required to acquire and retain customers as they reduce their reliance on third-party data. The market will continue to evolve and just like in the past, will be adapted to avoid disruption. 

Given that the maximum impact will be for brands, for marketers surviving and thriving will call for a combination of control, capability, and connection.

Control

Focusing on creating and owning first-party data can help generate unique insights. For this, brands need to invest in generating and analysing first-party customer data in-house. To start with, implement data capturing mechanisms that generate data at a level that can be used for personalised marketing communication to people who have already engaged with the brand.

Capability

Successfully surviving the change depends on three capabilities − right people, right processes, and right technologies. Organisations must build their infrastructure and Martech stack, as well as rethink their operating models. In this new era, the important technologies are customer data platforms, consent management software, and secure platforms that connect anonymised ad/marketing data from multiple sources. These technologies can be used to manage customers’ consent while developing a contextualised and holistic understanding of customers and prospects.

Connection

Brands need to strengthen relationships with ecosystem partners, such as tech players and media publishers, to get access to their data insights. One of the many ways to benefit from the ecosystem is to explore second-party data from tech leaders and publishers.

Where to next?

The next few years will be a challenging journey for many marketers as they work to figure out the best path forward in a more private digital world. The silver lining is that every brand is affected by this change. Data privacy regulations will impact brands in our connected universe and third-party cookies are going away.

Thriving in a privacy-centric world will require a fundamental shift in mindset, Martech stack, data strategy, operating model, and commercial arrangement. Trust and transparency would be the deciding factors. One can predict that consumers will be more than willing to give consent to brands they love, to generate first-party data. These brands will thus have multiple opportunities to provide human experience to customers through intuitive, and timed engagement, and provide respectful brand experiences across touchpoints.