Headlines about the demise of third-party cookies and the detrimental impacts of data deprecation are everywhere these days. And it’s true that increasing concerns about data privacy are leading to new policies and features that are changing the way brands can collect and use customer data.
But there’s an opportunity waiting in this so-called cookieless world. It’s the ideal moment to move away from an over-reliance on third-party sources and invest in building direct relationships with your customers that lead to more loyalty and higher-quality engagement over time.
In this article, we’ll explore what third-party cookies are, why they’re going away, and how marketers can replace them with a better approach to maintaining customer loyalty: using first- and zero-party data.
What are Third-Party Cookies & How Have They Been Useful?
For marketers, third-party cookies are important because they’re often used by ad tech platforms that you may hire to identify website visitors who look at a product or service page on your own website, then serve them relevant ads on other sites or platforms they visit. This kind of “follow you around the Internet” programmatic advertising has grown exponentially since the early 2010s, and as of 2020, accounted for over 78% of US display and video ad dollars.
Why are Cookies Going Away?
The problem with third-party cookies and the data they provide (often referred to as third-party data) is privacy. Website users don’t always know when they’re being monitored, how that data is being used, or who’s gaining access to their information. In recent years, scandals like the Cambridge Analytica fiasco highlighted the ways tech platforms like Facebook were collecting and selling private information to third-party companies without its users’ active consent.
This means consumers and government regulators have become more concerned about data privacy. As a result, legislation like the European Union’s GDPR and California’s CCPA have restricted how companies can collect and use consumer data. And in an effort to prove they can self-regulate and get ahead of additional laws, tech giants like Apple are introducing new features and policies like its App Tracking Transparency and Mail Privacy Protection.
So, by the end of 2023, Google plans to end support for third-party cookies on its massively popular browser Chrome—joining other major browsers like Safari and Mozilla, which have already stopped allowing third-party cookies in recent years.
(One note: while marketers are worried about the impact of reaching customers in a cookieless world, not all cookies are “going away”. First-party cookies, like the ones that you use on your own website to collect your own data, aren’t impacted by any of the browser restrictions on third-party cookies. More on that in a moment.)
What Do We Mean by “Third-Party Data Deprecation”?
The experience of marketers losing access to third-party data sources that have powered digital advertising and may have been key to building out their customer data profiles is known as third-party data deprecation.
New research from Forrester Consulting credits data deprecation to several key drivers, including a rise in consumers’ own privacy-protecting behavior, new privacy laws, and browser and OS restrictions.
Recent statistics on data access paint a clear picture of what data deprecation looks like. For example, 37% of internet users worldwide now use ad blockers, and only 21% of Apple users have opted in to app tracking. These changing consumer behaviors and new tech restrictions mean that third-party data sources are drying up—and marketers need to be ready to respond.
How Will a Cookieless World Impact My Marketing?
In the Forrester study, the majority of marketers report already feeling challenged to achieve their goals in the face of cookie deprecation, including customer lifecycle marketing activities:
- Retaining existing customers (66%)
- Creating personalized experiences or messages (70%)
- Cross-selling and upselling (71%)
Ultimately, the loss of third-party data means marketers will have less data on their customers’ habits, behaviors and inferred demographics, which could impact acquisition as well as retention and loyalty.
Additionally, marketers will likely have to adjust how they measure campaign effectiveness. If third-party data is part of your multi-touch attribution model, you’ll have to rework those metrics to account for data deprecation.
What is Zero-Party Data, and How Does It Tie into Cookie Deprecation?
All of this means one thing: you need to stop relying on third-party sources and collect information directly from your customers. In other words, it’s time to invest in first- and zero-party data.
Some quick definitions: First-party data is information you passively collect from user interactions. This usually includes data like website behavior, purchase history, or product preferences—all easily collected by your own first-party cookies, which aren’t going anywhere.
Zero-party data is even better—the gold standard of customer data. This kind of information is proactively shared with you by your customers. They offer it up freely and knowingly, usually in exchange for something valuable that you’re giving in return. For example, signing up for your newsletter, sharing personal information in your loyalty program or email preferences center, completing a form, or requesting a personalized offer are all moments when customers provide zero-party data.
For marketers, zero-party data is the silver lining in the doom and gloom of a cookieless world. Zero-party data is more reliable and typically more meaningful than third-party data, which usually relies on inferences and assumptions.
At this moment, as third-party cookies are going away, there is ample opportunity to invest in collecting zero-party data to build lasting relationships directly with your customers.
The vast majority of marketing leaders agree: 84% of CMOs believe moving away from data sources with privacy concerns is highly important, and 85% of marketers say it’s important to collect consumer-supplied data to create personalized experiences. These leaders understand that first- and zero-party data are crucial for succeeding when faced with third-party cookie deprecation.
How Can We Keep a Loyal Client Base Without Cookies?
When it comes to maintaining customer loyalty, technology and methodology may be evolving, but the overarching strategy remains the same: know who your customers are, understand what they care about, and deliver content and experiences that meet their needs and make them feel valued.
By investing in zero-party and first-party data, you’re gathering information that helps you know more about who your customers are so you can better personalize their experiences.
Balancing Consumer Expectations: Privacy vs. Personalization
In this moment of third-party data deprecation, you may feel like you’re in a marketing catch-22: provide personalized experiences to your customers, but respect their privacy. Despite the fact that consumers are increasingly concerned about how companies are using and sharing their personal data, they also want highly relevant content and communication.
Balancing these two consumer expectations going forward will require both creativity and a renewed investment in first- and zero-party data.
The good news: when your customers receive something of value (like a discount or free shipping) in exchange for giving you personal data, that experience in and of itself can build trust and brand loyalty over time. This makes collecting zero-party data a win-win, as long as you’re offering a clear incentive that your customers care about.
4 Things Marketers Should Do to Prepare for Cookie Deprecation to Maintain Loyalty
Preparing for a cookieless world may sound overwhelming, but there are four concrete steps you can take to develop a strategy for replacing your third-party sources with first- and zero-party data.
01 Determine Your Reliance on Third-Party Cookies
Conduct an audit of your marketing activities and reporting to identify the campaigns, content, and metrics that rely on third-party cookies. If you use an ad tech platform or intent data provider, talk to them about their plans to deliver insights and achieve retargeting in a cookieless world, and evaluate if the relationships are going to be worthwhile moving forward.
02 Decide What First- and Zero-Party Customer Data is Most Important to Collect
Before you start shooting off customer surveys, pause and build a strategy around what kinds of first- and zero-party data is most important for your brand to collect. Start by looking at your audit results and identifying what gaps you’ll need to fill in a world without third-party cookies.
For example, if your audit revealed that you’re relying on a third-party source to provide basic demographic information like gender, age, or income level, you may want to shift your approach and ask those questions directly of your customers.
03 Build a First- and Zero-Party Data Collection Strategy
Now, decide how you’re going to collect that valuable first- and zero-party data. Here are a few specific tactics you can put to use:
Use First-Party Cookies to Track Website Behavior
Use your own first-party cookies and tracking pixels to passively collect information about the behavior of specific consumers across your own website. As long as you’re following best practices for cookie consent, this is a privacy-friendly way to gather first-party data about your customers, such as what pages they visit or what products they buy.
Collect Zero-Party Data in Your Email Preferences Center
Your email preferences center can tell you what kind of content your customers care about and want to receive from you. Conduct occasional re-engagement campaigns to ask active subscribers to update their information. Just make sure you’re prepared to meet their requests, because zero-party data only builds trust when you deliver something valuable in exchange—and in this scenario, that’s more relevant content.
Layer Meaningful Questions into Customer Loyalty Programs
When customers are signing up for your loyalty program, you have a golden opportunity to gather zero-party data. It’s a great time to ask about their location, family size, interests, values, and other attributes that wouldn’t be appropriate earlier in the lifecycle. And since loyalty programs typically provide discounts, perks, or special offers, the zero-party data exchange is clear and meaningful.
Gather Zero-Party Data Through Identity Marketing
Identity marketing involves connecting with your customers based on an important attribute like profession or life stage. By offering a discount or perk to customers because of who they are, your brand can build a meaningful connection, show appreciation, and build loyalty for the long-term.
For example, customers will gladly verify their identity as members of the military, college students, or first responders in exchange for an exclusive discount, and your brand can then use that information to connect and engage over time.
04 Build a Retargeting Plan to Re-Engage with Customers Based on Their Data
Once you have first- and zero-party data integrated into your audience segments and customer profiles, you can begin providing those personalized experiences that drive loyalty and repeat purchase behavior over time.
For example, athletic brand ASICS uses a mix of zero- and first-party data to power a personalized marketing program that drives double-digit growth and customer lifetime value. Its OneASICS loyalty program collects meaningful information from customers that the marketing team uses to tailor content across channels. The brand also provides exclusive discounts to first responders and military members through SheerID, and applies those valuable insights to deliver engagement campaigns at special occasions for their communities throughout the year.
A Cookieless World is Coming. Start Preparing Today.
The good news: marketers are pros at adapting to change. This new cookieless world is just the latest opportunity to leave old ways behind and embrace new technologies and best practices, like zero-party data.
Brands that invest in directly connecting with their customers will have more reliable, more actionable information to power campaigns and personalize content. Learn more about how collecting zero-party data through SheerID’s identity marketing platform can set you up for success in a cookieless world.