Technology Alternatives to the Third-Party Cookie
Google announced early last year that it would be sunsetting the third-party cookie in 2022, following the lead of Mozilla’s Firefox and Apple’s Safari web browsers and driving marketers to look for effective alternatives.
The challenges are twofold: Marketers have long relied on cookies to track consumers’ movements across the internet to help them personalize digital outreach, and now that is gone. Additionally, privacy concerns are at the forefront because they can no longer rely on prospect and customer data from third-party providers; instead, they are collecting it themselves.
Luckily, there are several alternatives to the third-party cookie, though they require a more proactive approach to marketing and more attention to privacy concerns, according to marketing and privacy experts.
The value of third-party cookies was already coming into question before Google made its announcement, says David Finkelstein, CEO and cofounder of BDEX, a provider of data and identity resolution technologies. “Companies selling the [third-party] data couldn’t authenticate it.”
Additionally, third-party cookies also resulted in prospects being targeted more by adware and spyware, meaning that marketing efforts from companies with which they might legitimately want to do business were ignored, blocked, or sent to spam folders, Finkelstein says.
Third-party cookies also generated fake clicks and didn’t provide important conversion information. With first-party data, companies have a better handle on the information and can better track the effectiveness of online ad spending, Finkelstein says.
“Companies that have the best data quality will see a much better return on their ad spending if they can find the right customers to reach,” he adds.
Customers were already tiring of marketers using third-party cookies long before Google made its announcement, according to Esther Poulsen, founder and CEO of Raare Solutions, a provider of business advisory services in CRM and customer data analysis. Some marketers already realized this. The use of third-party cookies was already in decline since the passage of the European Union’s General Data Protection Regulation (GDPR), meaning that many marketers were already relying on other sources of customer data.
“The No. 1 change has been an increasing reliance on a first-party data strategy,” says Josh Daghir, associate director of strategy and portfolio at R/GA Ventures, the innovation platform and investment arm of global marketing and advertising firm R/GA. “Publishers have been on the front line of this with digital advertising.”
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Though to many it might seem like third-party cookies have been around forever, they are a relatively new phenomenon, with a little more than a decade of use. For veteran marketers, the loss of third-party cookies means going back to older strategies while remaining cognizant of new technologies and privacy concerns that have emerged since the birth of third-party cookies.
“If you look back 10 to 15 years ago, people had their own log-ins for different websites and RSS feeds,” recalls Sav Khetan, vice president of product at Tealium, a provider of data, tag management, and marketing software. “Now companies [that haven’t already done so] will need to go back to creating relationships with customers. There will be a lot more requesting emails when someone accesses a site and strategies like that.”
First-party data provides better, more reliable prospect and customer information than third-party cookies and, as a result, is more effective at targeting customers and prospects and successfully progressing them through the sales funnel, Khetan asserts.
“You need to provide very clear value in exchange for the customer providing you their data,” he adds. “People have no problem giving you the data if they know that you are going to use it for what they think are the right reasons. Third-party cookies didn’t provide as much relative data, so there were gaps in the targeting chain. Cross-channel personalization took a hit. When you use first-party data, it’s not a shock to the consumer when you market to them.”
Yet there was still a large proportion of marketers who had yet to change their strategies. In to a recent BCG study, nine out of 10 marketers said third-party cookies were very important to their digital marketing efforts. Yet less than 30 percent were collecting first-party data and integrating it across channels.
Marketers who have entered the industry since the advent of the third-party cookie will see the biggest change to their strategies when cookies disappear, Khetan adds.
David Campbell, vice president of product marketing at SugarCRM, says companies should instead focus on the data people share with them willingly, tracking customer data over time and augmenting that information with information from public sources to gain a more comprehensive perspective about the customer.
This data, combined with artificial intelligence, will help marketers make predictions about future customer behavior, including the performance of new market segments, which leads marketers to prioritize based on propensity to close and which customers are likely to churn, Campbell says. “This is particularly relevant in an economy affected by the global pandemic, because one of the things [such data collection] enables is retention and additional revenue from existing customers, which is key when growth is not a viable option due to market conditions.”