It’s the end of an era for third-party cookies – here’s what happens next
- Friday, January 21st, 2022
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Dimitris Maniatis, CEO of Upstream, looks at how the demise of third-party data could lead to new opportunities for brands that embrace first-party data, and at the part mobile operators could play in the post-cookie future.
Google’s decision last year to delay plans to phase out third-party cookies until 2023 may have given marketers brief respite – but it doesn’t change the industry’s direction of travel. By removing the ability to place third-party cookies on its market-leading Chrome browser, following in the footsteps of the likes of Safari and Firefox, surely Google is signaling the end-times for cookie-based website user-tracking?
It’s not quite that simple.
From ‘a glass-half-empty’ perspective, the end of third-party cookies will turn entire business models upside down and lay waste to years of careful campaign planning. The days of retargeting and conveniently following users around the internet will be over. Most marketers will, of course, be of the glass-half-empty persuasion. After all, they’ve worked very hard to turn the current landscape to their advantage and now the rug is being pulled from under their feet.
But from a glass-half-full perspective, could this end of an era move toward user control and privacy turn out to be a good thing? There’s a battle on the horizon over the future of user privacy on the web, and Google is simply joining it or – given Google’s dominance of browsers and search – leading the way.
And, maybe, the whole marketing industry will be forced into better marketing, better engagement with consumers, and better results.
Ending the cookie-cutter approach to marketing
Using third-party data has always been a numbers game borne of convenience rather than a genuine willingness to engage with customers in any meaningful sense. Third-party data and cookies have a plug-and-play attraction to them, effectively allowing businesses to outsource much of the heavy lifting when it comes to raising brand awareness, getting eyes on products, and keeping interested customers engaged and more likely to part with their cash. It’s incredibly convenient, but it’s also relatively low effort.
Cross-site visitor tracking and programmatic display advertising is fine in principle, but too many businesses get lured into complacency, re-rolling the same campaigns while they steadily lose traction and genuine engagement with their customers. Perhaps this is the dystopia we should have been railing against.
In the midst of all the noise about the end of third-party cookies, it’s easy to forget that first-party cookies are alive and kicking. They allow businesses to track and target visitors to their own websites, analyzing user behavior and tailoring each individual experience to an impressive degree.
Recent data suggests that nearly 40 per cent of third-party cookies get deleted anyway, either by digitally savvy people themselves or by anti-spyware and privacy apps. So, all that time and attention that businesses spend on third-party user tracking is often for nothing. On the other hand, less than 5 per cent of first-party cookies get deleted.
So, even when third-party cookies turn to dust, marketers will still have first-party cookies in their arsenal. The problem has always been that first-party data is harder to acquire, and therefore harder to put into action.
So, what now?
This is where the story gets interesting. As marketers need to be more creative in their interactions with customers, we might see something of a renaissance in personalized marketing. Instead of marketing people and systems seeing a woman aged 25-35 who recently browsed smartphones online, maybe we could actually see that it is Jennifer Brown and she’s already bought her smartphone. The old way of marketing would see Jennifer chased around the internet with further smartphone ads that she would never engage with. The new way of marketing would not try to sell her something she had just bought and perhaps decide to offer her a warranty or insurance on her purchase.
It’s harder this way, but ultimately more fruitful. Instead of tapping into generalized consumer data, marketers should instead be looking for a relationship with prospects and customers. This is the world of first-party, not third-party data.
Climbing a new mountain
There is a mountain to climb for any advertiser that was used to abundant consumer data, but it is a mountain worth climbing. Interestingly, the “sherpas” for this journey might have been with us this whole time, completely ignored by most internet marketers – the mobile operators.
Mobile operators could become advertisers’ guides because they have incredible reach and are uniquely capable of helping to tackle the big task of building first-party data rapidly and at scale. They could become advertisers’ new best friends if it is done right. You only have to follow the money to see the truth of this. In the US, there has been a boom in funding for SMS marketing companies, as the trend for conversational commerce takes hold. As third-party data fades away, mobile operators’ reach and infrastructure will likely become the lifeline for advertisers in their switch to first-party data.
So the demise of third-party cookies next year does not need to mean the end of online marketing, perhaps all we’re doing is turning the page to a more enlightened and genuinely personalized form of marketing.
One that involves users and engages them on their own terms.