With Google following in the footsteps of Mozilla and Apple and phasing out support for third-party cookies in its Chrome browser by 2022, now would be the perfect time to reimagine how businesses collect and utilize their first-party customer data.
Right now, the industry is witnessing the right conditions for a revolution in digital identity and customer targeting. Since Google announced its plan to phase out support for third-party cookies in its Chrome browser by 2022, now would be the ideal time to reimagine how businesses collect and using their first-party customer data. Many marketers have adopted the wait-and-see approach to see how this all pans out while simultaneously attempting to set themselves up for success once the replacement presents itself.
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There are multiple similarities between the phase-out of third-party cookies and the digital evolution of mobile coupons. Many retailers may face significant hurdles in the near term from the death of third-party cookies, especially in the area of marketing attribution and customer acquisition marketing. However, the evolution of consumer identity and tracking could prove to be a big win for the industry.
Moving Away from Digital Customer Acquisition
There are multiple reasons why brands may want to back off from digital customer acquisition marketing in the near term. Strategies such as affiliate marketing and ad retargeting depend heavily on third-party cookies to reach potential customers with ads and track customer purchase conversion.
But, with the demise of cookies, both strategies are likely to fail since brands won’t be able to identify the individual customer who made a purchase or abandoned a site visit. Even though there are replacement solutions at present, they are imperfect and leave a majority of the vendor community exposed to significant revenue loss.
According to a report from Forrester, businesses and retailers will increase their spending on customer loyalty and retention rather than acquisition in 2021. Retailers will depend heavily on existing customers to drive their revenue. With marketing budgets getting tighter due to pandemic sales slowdowns, more brands are now shifting their priorities to customers they know they can rely on.
With a push towards brand loyalty and retention, businesses are more knowledgeable about who they are targeting. They can leverage their own first-party data to better target their consumers, with effective personalization in their advertising and promotions, leading to a better conversion rate. Without third-party cookies, retailers will face many hurdles, but hedging towards their own customer data can be an excellent strategy as they move towards a post-cookie world.
Protecting Consumer Identity
Right now, there isn’t a solid, universal identifier that can replace third-party cookies. However, the solutions that are currently being developed represent a step forward across all industries. It is a push towards agnostic identity, and for the first time, this can prove to be beneficial for all the parties involved – brands and marketers, and consumers.
Two of the main cookie replacements – Trade Desk’s Unified ID 2.0 and Google’s Federated Learning of Cohorts (FLoC) – have many abilities that cookies do not possess. The biggest advantage is that the identity data they leverage isn’t drawn from demographic information.
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Given the disruption in 2020, businesses have seen what the dependence on demographic data means for targeting. Quite often, by the time the data is actionable, it’s not usable anymore. The data used in targeting may actually be doing more harm than good, especially in the case of brand equity. Therefore, shifting towards something anonymized safeguards customer privacy and gives brands actionable data that can be predictive.
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