Will retailers be ready when the third-party cookies crumble?
Eighty-one percent of companies are reliant on third-party cookies while 85 percent of consumers want brands to use only first-party data, according to Twilio’s “State of Customer Engagement Report.”
The global survey of 3,450 business leaders and 4,500 consumers further found that more than half (55 percent) of companies are not fully prepared for a cookieless world. Forty-two percent predict the impending changes will lead to lower return on investment on their marketing spend.
Google plans to start blocking cookies in Chrome, the dominant browser, by the end of 2023. Firefox and Safari are already doing so.
In a new study, McKinsey identified three strategies that can help companies prepare for the impending demise of third-party cookies as well as new opt-in requirements that restrict mobile-device identifiers for ad targeting.
- Use their own consumer touchpoints to collect first-party data;
- Create partnerships to leverage second-party data;
- Experiment with contextual advertising, which displays ads based on the content a user is viewing, and explore the evolution of interest-based advertising, which targets consumers based on their recent top categories of interest.
McKinsey added, “Advertisers will also need to rethink how they approach measurement and attribution — the process of assessing the contribution of the advertising channels that lead customers to their website or app — given that Google’s cookie ban, Apple’s app-tracking-transparency policy, and evolving privacy-protection regulation will render some existing measurement and attribution methods obsolete.”
Capgemini wrote in a recent blog entry, “Solutions that help marketers to strengthen first party data, match and analyze first party data from any source, and expand overlaps for greater accuracy and scale while being agnostic of cloud and identity provider will empower data enrichment and identity resolution.”
Deloitte said in a study last fall that post-cookies success will most likely take a multichannel measurement approach that blends insights from a CDP (consumer data platform), cohort analytics and deeper relationships with ecosystem partners. The consultancy wrote, “There will likely be more speed bumps in the road, but, ultimately, a shift to first-party data can lead companies toward a better understanding of their customer journey.”
- Investment in Digital Customer Engagement Generated 70 percent Revenue Growth for Companies Last Year, Twilio Data Shows – Twilio
- As the cookie crumbles, three strategies for advertisers to thrive – McKinsey
- Are you addicted to your cookie jar? – Capgemini
- The future of a cookieless world – Deloitte
- Study by Lytics Finds 47% of Marketers Say End of Third-party Cookies will Have “Large” Impact on Marketing ROI – Lytics/PRWeb
DISCUSSION QUESTIONS: What advice would you give marketers about shifting from reliance on third-party data to first-party data for ad targeting? What promising alternatives to third-party data do you see?