Privacy and data security have never been more important due to consumers demanding control of their data. In part, this is driven by the EU’s Digital Service Act which is due to come into force by 2024, tightening the restrictions initially introduced by the GDPR policy on how online data is collected and used. Additionally, the tech giant Google is ending its support of third-party cookies in Chrome within a similar timeframe.
These demands, driven both by consumers and by the laws that regulate this area, have obligated brands to find an alternative to third-party cookies in order to continue collecting user data and develop personalized marketing strategies. So, if back in 2021 86% of US marketers relied on third-party cookies, most companies will now have to adapt their marketing strategies if they still rely on digital advertising since by the end of 2023 third-party cookies will disappear. This measure particularly affects retailers who rely on this data for targeting tactics like remarketing, which depend on cookies placed in a visitor's browser when they visit a website. Therefore, the lack of this data will significantly affect their reach. The end of third-party cookies will also affect the ability of advertisers to exclude audiences from their target group. This means they will have to resort to first-party cookies and develop new and innovative ways to collect consumer data.
For innovative and agile companies, this is an opportunity to restructure their digital campaigns and incorporate consent-based technologies that inform consumers about the end use of the collected data.
So, why are third-party cookies being phased out?
What triggered the change?
In essence, third-party cookies gather data about a user that is not obtained directly by the owner of the website, but is created by the different websites that the user visits. In other words, it is the data recorded in our browsing history that is later used to create user profiles which are then fed with personalized ads in other websites and browsers. It’s no surprise that they are causing concerns about privacy and the commodification of personal data beyond the control of individuals. Third-party cookies, in particular, are of concern because more often than not, consumers accept having their data collected without understanding what it’s being used for or that it will be shared with a system of brands that all target the user with ads. Consequently, users are overwhelmed with advertisements for products they haven’t indicated an interest in by brands they never agreed to share their information with.
The new regulations allow users to decide what data is being collected about them, how it is being used, and they are also given the opportunity to opt out at any time. The change protects privacy and advocates for consent-based marketing as well as improving the browsing experience. The use of third-party cookies hasn’t been an optimized experience for brands either as the data collected was focused on breadth, not targeting users with real buyer intent. In this case, change is accelerating improvement.
From third-party cookies to Zero-Party Data
Once the new regulations are set in place, brands and retailers in particular, will have to collect all their data themselves using different tactics that track the digital trail of visitors on their own sites and offer the user in a transparent manner, different options of choosing how they prefer to be reached out to. That is where Zero-Party Data comes in, which is the data that users provide voluntarily and consciously, an innovative solution to gather valuable client data and an excellent alternative to the currently available third-party cookies.
Zero Party Data is the optional information that the users agree to share with retailers and it ranges from interests, how often they would like to be contacted, personal context, to purchase intention and more. Once collected, this data is then fed into a PMP (Preference Management Platform), processed, shared and synchronized with the rest of the client data that’s stored in the company’s technological stack (CRM, Data Lake, CDP, Marketing Tool, etc.) reconciling in a single platform all the information that would normally be received through silos or systems (CRM, Data Warehouse, MK Automation, CDP, Data Lake, etc.). As a result of having these valuable real-time insights, brands will be able to have a global and unique vision of their customers, segment the database more deeply, and optimize and personalize all contacts with their customers regardless of the channel.
How to update your online data collection technology
Advanced technological solutions such as Didomi, NTT DATA Partner, build technology that allows organizations to place customer choice at the core of their strategy. By making consent and preference selection easily accessible, brands benefit from gaining customer data while building trust with their customers. Consumers, on their side, are free to choose what data to share and how they want to have contact with the brands and at what time.
Didomi's products include a Consent Management Platform (CMP), which collects billions of user consents each month, a Preference Management Platform (PMP), and a powerful suite of tailored solutions that brands can benefit from. Such solutions ensure GDPR compliance, manage consent, provide detailed statistics, personalization and testing, and adapt to different legal and geopolitical needs, among other capabilities.
A PMP in particular is essential in cookie management once third-party cookies will disappear. It gives customers control over their data with a customer-facing Preference Center which is where leads and customers can decide what to opt in for, what products they’re shown, the frequency of contact and the marketing channels they prefer. In addition to prioritizing consent, this way of collecting and managing user data ensures that the company's database is up-to-date and that targeted campaigns are highly personalized.
As a result, companies can continue to collect data about potential customers’ online behaviors beyond the extinction of third-party cookies and within the guidelines of new privacy-prioritizing and consent-advocating regulations. Transparency can be hailed as a core value of the company, improving customer satisfaction, loyalty and experience. With a detailed and up-to-date database, targeted marketing campaigns are more personalized and accurate than ever, increasing CTRs and conversion rates. It opens up the potential for developing machine learning to be applied to zero-party data to improve efficiency for both businesses and customers.
While the end of third-party cookies is a disruptive change in the well-established process of running targeted marketing, it is paving the way for improvements in the collection and use of online data in marketing which is better for customers and businesses alike. Customers, on the one hand, will be able to maintain control over their personal information, and brands, on the other, will generate relationships of trust with users through transparency and much more personalized marketing actions, adding value to the end customer by providing what you want, when you want it.
Prepare the business for the end of third-party cookies by upgrading to a comprehensive Consent and Permissions Management platform with the guidance of NTT DATA.