March 9, 2022
Five actionable insights to adapt to the crumbling third-party cookie with first-party data
The third-party cookie is crumbling, leaving digital marketers to pick up the pieces and find different ways to reach their prospective customers—fortunately, first-party data and CDPs stand to be the new powerful solution.
Up until recently, third-party cookies were a critical factor for digital advertising. They were once the bread and butter of internet money and the most reliable technique for gathering user data. For marketers, third-party cookies helped in delivering a more customized browsing and shopping experience.
Unfortunately, times have changed.
Between privacy concerns and the depreciating accuracy, the third-party cookie is on the way out. These changes come as new laws like the EU's General Data Protection Regulation (GDPR) and ePrivacy, put pressure on marketers and technology providers to shift away from the third-party cookie. At the same time, Google recently announced they are planning to phase out support for third-party cookies by 2023 to enhance web privacy for their users.
It’s clear that the advertising industry is changing, and marketers need to adapt to continue engaging their potential customers. In this post, we’ll discuss five actionable insights advertisers can use to brace themselves and prepare for the oncoming phase-out.
Why do third-party cookies matter for marketing?
Third-party cookies allow advertisers to track their online users, and have been at the core of most internet marketing strategies. With this information, marketers create customer personas to better personalize their experiences.
However, getting tracked by third parties is a huge privacy concern for most customers. This privacy concern is so significant that it has triggered technology companies like Apple, Google, and Meta to phase them out entirely. At the same time, the third-party cookie is gradually losing more and more relevance. Your modern customer accesses the internet from a wide variety of platforms via numerous channels. As a result, third-party data risks leaving out crucial details about a customer, and to some technology providers, no longer fits into the modern martech architecture.
That said, without third-party tracking, some marketers who fail to adapt may struggle to glean valuable insights about their customers. One way to solve this is by putting more accurate and valuable first-party data at the center of your marketing strategies.
For marketers, the death of third-party cookies shouldn't be the end of the world, rather it should be seen as an opportunity to adapt.
What Is the next step for marketers?
Most marketing trends are steadily moving towards first-party data. First-party data is customer data that is collected directly from businesses typically through purchases, email engagement, or website traffic. As such, first-party data has far higher accuracy than its third-party counterpart, and since this information is volunteered it is free from being seen as ethically dubious.
Leaning on first-party data is becoming more and more necessary to make a meaningful impact with potential customers. While potentially less plentiful, the insights from first-party data can be far more valuable. Now the pressure is on marketers to track the correct data without using third-party cookies.
1. Use relationships to build trust
Savvy marketers understand that building relationships with customers depends not only on products but also on earning their trust. When you can manage your data honestly and openly, your consumers will feel more inclined to share their data with you.
A major issue with third-party cookies is the fact that they track traffic without the consumer being fully aware that it’s happening. You can counteract this problem by asking your customers’ permission to track and store their data. Be up-front about the reason why you’re tracking their data, and showcase the value they will receive in doing so. If executed effectively, your customers will not only share their information with you but continue to engage with your brand well after the first purchase.
2. Use your first-party data effectively
Data collection and analysis have become more of a necessity over the past few years. As a result, most retailers are left with an abundance of customer data. The problem facing many retailers is that they have a wealth of data, but don’t have the means to use it all effectively.
When the third-party cookie finally crumbles, it is essential for retailers to adopt new tech stacks to fill the gap and help manage their first-party data. Invest and work with reliable martech partners to collect, automatically tag, and analyze your data. These technologies can give you more time and resources to improve consumer experiences and drive customer lifetime value.
3. Unify first-party data across the brand and break down data silos
In order to optimize your customer journey, you must unify your first-party data and enhance how you use it. The process starts by collecting and tagging your first-party data collection. Regardless of how much data you have, it will be challenging to get a holistic view of your customers or their digital experience when it's not unified on a single platform.
Without organized data, you can miss out on critical insights that can help you improve your customer experience and drive overall satisfaction.
4. Invest in personalized customer experiences
Not only do your customers desire personalized experiences, but at this point, they expect them. In fact, according to a study by McKinsey, 76% of consumers get frustrated when their shopping experience isn’t personalized—this is a stat that’s tough to ignore.
To put it simply, every customer touchpoint should be tailored to their behaviors and needs. Personalization means that email outreach, marketing, and even product listings are based on who your customers are, how they operate, and the attributes that drive their purchases.
Personalized customer experiences don’t come from guesswork either—they rely on accurate and unified first-party data. You can create highly-personalized customer experiences by focusing on real-time data and looking at consumers' context, then using the information to create relevant and timely interactions.
5. Master your first-party data maturity
First-party data is taking over, and sometime in the near future will be at the core of all marketing initiatives. It’s clear that the demand for privacy keeps growing, and at the same time, the need for relevant brand interactions and tailored experiences has never been higher.
The good news is customers are willing to share information with brands they trust. Studies show that about 60% of consumers share their personal information in exchange for extra value. Brands are taking notice and planning for discounts or other services to gain data for future interactions. Marketers can also invest in customer data and experience platforms to gather, analyze, and activate customer data.
How Lexer CDXP can help
At Lexer, we deliver a Customer Data Platform (CDP) designed to help you collect and unify your customer data with limited dependence on third-party cookies. Our platform natively supports various customer touchpoints to make your data available for all team members across departments and inform your customer insights to drive engagement and improve revenue.
Our simple integration tool effortlessly combines, standardizes, cleanses, and enriches your first-part data, into a unified single customer view. Lexer is built specifically for retail and is a core tool for brands like Rip Curl, Sur La Table, Supergoop, Quicksilver, and more.
If you’d like to learn more about how Lexer CDXP can help you adapt to the crumbling third-party cookie, download our Playbook: How a CDXP can solve your missing cookie problem. In the playbook we’ll take a deep dive into the depreciating third-party cookie and why a CDXP can help you pivot your strategies and glean deeper insight into your customers.
Use the calendar below to book a demo and discover how Lexer’s CDP can grow your business.