Post-Third-Party Cookie Advertising and Experiences

Cookies have been around since 1994 and were created as a way to provide early e-commerce sites insights into the customer buying journey that they were missing out on. This gap in knowledge left them at a big disadvantage to the brick-and-mortar stores most people preferred at the time.

Third-party cookies, like their first-party counterparts, are simply text files that store data about your web activity on different websites. Cookies also allow data to persist between web pages, like whether you’re currently logged in and what privacy setting you’ve selected. Cookies allow brands to provide more seamless and customized experiences. For example, an e-commerce site can use a cookie to track what items a visitor has added to their shopping cart so they do not need to re-add those items on their next visit.

Additionally, the third-party cookie provides important information for brands around the “unknown” visitor, or new visitors to a site where a cookie-contact association has yet to be made. Once this contact is made, the third-party cookie allows companies to collect information about what matters to you elsewhere, creating a digital breadcrumb trail that leads to your interests. Ultimately, this digital trail helps companies provide more personalized experiences despite having little interaction with a company’s web properties.

Despite the significant boost they provide to the user experience, third-party cookies have come under scrutiny lately as consumers become more concerned about privacy, questioning how their data is being used and seeking more control over who has access to it. This concern has led both Apple and Google to enforce a ban against third-party cookies in their respective browsers (Google’s to become effective in 2022), which will render the vast majority of today’s digital marketing useless.

This shift in the industry has forced marketers to rethink their data strategies and reconsider the tech tools they’ll need to provide rich, personalized, omni-channel experiences to customers while prioritizing their privacy and trust. 

Identity decides the future

As a Customer Data Platform provider, we’re reading the tea leaves on what the deprecation of third-party cookies will mean as the ability to bridge unknown and known visitor data disappears.

What does this new frontier mean for marketers?

Understanding the user experience across devices, domains, and sessions will be a lot more difficult. That option is gone. Without the third-party cookie, almost everything that happens outside of a company’s own properties will be hazed in mystery. It’s a win for consumer privacy, as decentralizing the data associated with individual user behavior and making it inaccessible as a default will give consumers more control over what brands know.

Companies that rely on Apple device IDs to identify users are already familiar with this pain point, as Apple devices purge visitor IDs after seven days. Long-term user identification is moving beyond third-party identifiers like cookies.

As a result, companies will need to home in on a sustainable first-party data strategy that prioritizes privacy consent opt-in and authentication. When users log in and provide consent to collect their information, it will be much easier to provide the personalized customer experience people demand today.

Of course, companies will still need to provide an equivalent user experience to the unknown visitors or risk driving them away. They will need to find incentives to drive authentication and opt-ins; additionally, they will need to create a brand experience that is broadly accessible in lieu of today’s personalized approaches that rely on third-party data insights.

What has yet to be decided is how identification will work when it comes to unknown traffic.

The road to recalibration

Already, battle lines are being drawn. Popular user ecosystems like Apple and Google are shoring up their walled gardens. Identifiers for Advertisers (IDFAs), Apple’s method for allowing advertisers to track activity on devices, is now an opt-in choice for consumers. Companies will need to recognize that, as more of these device and social networking companies lock down easy access to user data, identification and attribution will become much less useful without major recalibration.

It remains to be seen exactly how ad networks will adjust post-third-party cookies. However, it is clear that advertisers will need to think more strategically about which channels they want to invest time in. Also, in the short term, they will need to ensure their content offers real benefit to the buyer to encourage authentic engagement. 

The end of third-party cookies will cloak the anonymous portion of the customer experience for companies. Without those insights, companies need to focus their efforts on creating a customer experience that rapidly converts unknown visitors into known.

Customer Data Platforms will be an invaluable tool in the post-third-party cookie world. CDPs that collect and unify data in real time can help provide a single view of the customer across channels so companies can provide great customer experiences. For example, CDPs help companies market to audiences that are most likely to convert and create special offers for at-risk audiences while upholding privacy preferences. This happens by ensuring the consumer can clearly specify their consent preferences – such as opt-in or opt-out for GDPR or “Do Not Sell My Personal Information” for CCPA – enforcing those preferences on the data and various features within the tool, and handling the right to access or right to erasure. 

The source of data in the CDP represents data generated by the various marketing and sales interactions a consumer has with a brand across their journey. It is ingested via various integrations and data sources – websites, mobile apps, and other available data such as point-of-sale, loyalty, call center, CRM, social and digital paid media and more. The sources are a combination of the various channels, marketing tools, and existing data stores for the brand. 

The Consent Management layer is one of these sources that usually sits in front of the website or mobile app to provide the CDP with user preferences across all purposes. All consent managers are required to provide a list of the various services receiving the data, the purposes for using the data, and a detailed list of every vendor or destination for that data. The consumer can provide their preferences both at the purpose and at the vendor level, and review the information when giving their consent preferences. This is now a compliance requirement of both GDPR and CCPA. However, since the customer is not required to review this list or give preferences at the vendor level, only customers that are looking for this information will find it. 

Over the next year, companies will focus on recalibrating their marketing strategies to address these growing gaps in the customer experience. With the right tools in place, they can swiftly shift their focus from third-party to first-party data to prioritize the quality of the data being collected and transform to provide better customer experiences.

Sav Khetan is VP of Product at Tealium.

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