Emptying out the cookie jar: Challenges and opportunities for marketers

This is the era of privacy. The modern consumer expects truly personalised experiences on whatever touchpoint they engage with your brand. Challenge accepted. Billy Loizou looks at how to do this with heightened privacy, tighter data controls and the right to have the information erased with the click of a button. 

During the recent representatives from Cheetah Digital Signals21 event, dissected ways to break the personalisation and privacy paradox. 

They discussed the timeline of disruption around these marketing roadblocks, how consumers and marketers are responding to these roadblocks, and how marketers can thrive from the death of cookies. 

Timeline of Data Disruption 

 

During the past three years, major technology companies have been announcing their removal of third-party cookie plans. Their decisions have been influenced heavily by the Facebook and Cambridge Analytical scandal which emerged in early 2018. 

Since March 2018, when Chris Wiley blew the whistle on the Cambridge Analytica and Facebook scandal, governments have been investing in regulations. The European Union was the first to tighten the General Data Protection Regulations GDPR in May 2018. Less than two years later in January 2020, the state of California passed the California Consumer Privacy Act

In January of 2020, Google announced plans to phase out support for third-party cookies within a year. Since then browsers such as Mozilla Firefox and Apple’s Safari have announced they will be stepping away from cookies too. 

However, the timelines changed in June 2021, when Google explained that third-party cookies will not be eradicated until 2023

Richard Jones, chief marketing officer of Cheetah Digital explains, “They moved out the timeline for phasing out cookies, giving a new period of grace for advertisers and publishers that we’ll see in late 2022. With stage two, which is the phasing out of cookies, it will start in mid-2023, and then end in late 2023.”

A consumer’s perspective

 

In the past, consumers surrendered their data in exchange for convenience, however with all these changes coming in the next couple of years, the consumer has never been more aware of how they are being tracked online. 

Jones says, “We can certainly see more consumer awareness around what marketing tactics are considered creepy versus cool.”

From the 2021 Consumer Trends Index Report, 73 percent of respondents said they were okay to receive recommendations from brands based on past purchases. The report showed 54 percent of consumers were also okay to receive an email reminder about an abandoned cart. However, 66 percent said they do not like adverts that follow them across devices. 

Furthermore, 69 percent of respondents said adverts relating to something they talked about near a smart device is creepy. Seventy-two percent said they do not want advertisements from companies they don’t know based on their location data. 

“There’s a big difference between targeting a golden audience segment with a silver bullet of an offer versus going through a consumer’s proverbial trash by analysing their browsing history,” Tim Glomb, vice president of content at Cheetah Digital, explains. 

A marketer’s perspective 

 

Cheetah Digital recently engaged with Ad Age to release a report, An Optimal Path to Personalisation, to understand how marketers are thinking when it comes to cookies.  

In the report, only 13.4 percent of marketing professionals said they plan on continuing to use cookies and third-party data. Thirty-six percent of respondents said they will greatly reduce reliance on cookies and third-party data. The majority said they are investigating how to reduce their reliance on cookies.

Jones reveals how this research is not surprising. Marketers are still in a “fairly embryonic stage” of evaluating what the path forward is when it comes to a cookie-less future. 

Consumers want more personalisation and more privacy, this is the paradox marketers are grappling with right now. 

Glomb adds, “We can see marketers are primarily using segments or cohort-based personalisation, versus true one-to-one personalisation.

“As we get closer to the cliff edge of the deprecation of third-party cookies, we’re going to see marketers ramp up and hopefully get more people into using advanced personalisation at a one-to-one level using known data.”

How to thrive from the death of the cookie

 

As brands and marketers start to address what they’re going to do in this cookie-less future, many are starting to build first-party relationships and incentivise direct engagement. 

The IAB is promoting the idea of a consumer value exchange. In their recent IAB 2021 Outlook report, IAB questioned “Are we operating in a way that provides a clear value exchange to consumers, in the long term?”

Founder of IAB Tech Lab Scott Cunningham explains when marketers are moving away from cookies aka third-party data they have to move somewhere. That somewhere is first-party data. 

“When we think about first-party data, we think about who are the entities in the advertising and marketing supply chain that have first-party relationships; it is the brand marketers and publishers. 

“Everybody else in the middle of that is an intermediary, from the big agency holding companies to supply-side tech platforms to data management platforms. These are all intermediaries without a relationship to an end consumer. 

“Those entities, brand marketers and publishers that have first-party relationships, over the next two years, need to be able to leverage any element of advertising transaction. This is whether it’s through programmatic channels, automated channels, private marketplaces or direct type deals,” Cunningham explains. 

Car manufacturer Renault is also moving away from third party data. The company is looking at what consumer data they have internally and also exploring second-party data relationships.

 Jones says, “Many other marketers, including the analysts, are promoting zero party data as a sensible strategy, given the need to balance privacy and personalisation. This is data that a consumer willingly gives a brand in return for getting better, personalised products, content or services.”

While marketers can take advantage of free services and personalised discounts to get the best direct engagement. Jones explains, the best way for organisations to engage with customers directly without the need for cookies is through loyalty programs. 

And as the cookie begins to “crumble” marketers need to reduce their reliance on third-party tracking and look towards the future of first-party data sources such as loyalty brands to ensure they can build a harmonious relationship between the brand and the consumer. 

Jones says, “Loyalty programs that when done well govern the value exchange between brands and consumers, not just for a single interaction, but for direct engagement over the customer lifetime. With contextually differentiated, personalised experiences, they can be the conduit for the one-to-one relationships that build customer lifetime value.”

Billy Loizou is the vice president of Go To Market APAC, Cheetah Digital.