The loss of third-party cookies will completely disrupt the digital media ecosystem. While most advertisers think about third-party cookies in the context of targeting, they are used across a variety of tools that span data collection, audience segmentation, data onboarding, and, most importantly, measurement.
How Google’s deprecation of third-party cookies impacts consumer privacy online
The deprecation of third-party cookies by Google will change the way consumer data is used online. With fewer third-party tracking cookies, there’s less opportunity for widespread tracking of user behaviour across different websites. This shift means consumers have more control over their personal data by allowing users to opt-in vs opt-out of data sharing. This will force companies to explore new consent incentives and test alternative tracking methods.
For instance, there will be a significant move towards the collection and management of first-party data because of the numerous benefits it offers, such as improved data accuracy, enhanced customer relationships, greater data control and security, and more effective personalisation strategies.
The elimination of third-party cookies will also significantly alter the data compliance landscape. Companies will need to focus more on obtaining explicit consent for data collection while aligning with a mishmash of regulations across geographic regions, with GDPR and CCPA. This shift could also prompt new regulations specifically addressing alternative tracking technologies and first-party data collection practices to ensure the data company is consensually provided.
Challenges and opportunities that brands may face as they shift from third-party to first-party data collection
Brands face fundamental challenges such as the need to invest in new technologies for first-party data collection and the potential reduction in the amount of available consumer data. This new reality will present opportunities, including building more direct and meaningful relationships with customers, gaining accurate and relevant data that can inform customer interactions, and enhancing brand trust and credibility.
The key is to align on a strategic vision and select the right data management solutions to achieve it. Ones that are scalable, user-friendly with out-of-the-box analytics features, compliant, and capable of integrating seamlessly with existing martech and other systems.
Companies should revisit their data governance policies to ensure compliance with privacy regulations and ethical standards. This includes implementing robust consent management systems, ensuring compliance, and being transparent about data collection and usage practices. Investing in management and security to protect first-party data is also crucial.
Finally, it’s important to remember that while many CDPs offer tools and features that can support compliance, transparency, and security, they are not a complete solution in themselves. Companies must actively manage these aspects in line with their specific needs and regulatory requirements.
How the Privacy Sandbox and other similar initiatives balance the need for user privacy with the commercial need for targeted advertising
Initiatives like Google’s Privacy Sandbox aim to create technologies that allow for user privacy while still enabling targeted advertising. These initiatives may involve using aggregated, anonymized data or machine learning algorithms that process data on the user’s device without transmitting sensitive information.
But while Google’s Privacy Sandbox is beneficial from a privacy standpoint, it limits the depth of data brands are used to working with. They should not rely on Google to provide the data or tools they need to power personalisation capabilities compared to what first-party data used with a CDP offers.
CDPs consolidate diverse data sources to offer a comprehensive view of customer behaviour and preferences, excelling in personalisation through detailed segmentation and targeted campaigns. This contrasts with the Privacy Sandbox’s limited use of personal data.
CDPs stand out with their real-time data processing, enabling immediate responses to customer behaviours, a feature less emphasised in the Privacy Sandbox. They offer businesses direct control and ownership over customer data, allowing more flexibility in data management and use. This control is crucial, especially compared to dependence on third-party platforms like the Privacy Sandbox.
Additionally, CDPs offer customisation to meet specific business needs and integrate with other tools, creating a tailored tech stack that may not be as achievable with the Privacy Sandbox. They also support compliance with various privacy regulations, such as GDPR or CCPA, enabling responsible and ethical data management while still deriving valuable insights.
The role of artificial intelligence and machine learning in the cookieless era
The alternatives to replace third-party cookies for tracking and data analytics purposes we’re already seeing include first-party data activation tools, the return of contextual advertising, data clean rooms for measurement and collaboration, and AI. By using AI and machine learning for predictive analytics based on first-party data or using blockchain for transparent and secure data transactions.
As reliance on third-party cookies decreases, AI and machine learning will play a more significant role in marketing. As we move forward, it’s becoming increasingly clear that brands must embrace new AI-driven methodologies to effectively acquire and retain customers. This shift isn’t just about keeping up with technological advancements; it’s a response to intensifying business pressures and evolving consumer demands.
From a business perspective, the pressure is mounting for efficiency, scalability, and the effective use of data to drive greater returns. In this landscape, AI’s role is crucial. For CMOs, delivering a greater return on investment has emerged as the primary objective for 2023, underscoring the need for a more sophisticated, data-driven approach.
However, this shift isn’t solely about the numbers. Consumer demands are equally influential in shaping this new paradigm. There’s a growing concern among consumers about how AI and their personal data are used. They expect brands to be not only conscious but also responsible in their data utilization. Furthermore, as consumers become more willing to share their data, they anticipate a higher degree of personalisation and relevancy in their interactions with brands. They want experiences that are tailored to their preferences, delivered at the right time, and through the right channels.
The intersection of business efficiency and consumer-centricity is defining a new era in marketing. Brands that successfully navigate this landscape by leveraging AI in a responsible, consumer-focused manner are poised to thrive in this dynamic environment.
How brands can ensure transparency and maintain trust with their customers during this transition
Brands will maintain consumer trust during this transition by being transparent about their data collection and usage practices. Regular communication with customers about how their data is being used and providing them with greater control over their data will foster trust. Additionally, keeping pace with and adhering to growing privacy regulations and ethical standards is key.
There is no silver bullet to replace the third-party cookie, and advertisers have the opportunity to reimagine their digital media tech stack. In fact, we’re seeing that brands that leave the cookie environment now are experiencing a competitive advantage and will continue to do so since most of the industry has not shifted their reliance on 3P cookies.
This article is written by Peter Ibarra, head of adtech solutions, Amperity
The insight is published as part of MARKETECH APAC’s thought leadership series under What’s NEXT 2023-2024. What’s NEXT 2023-2024 is a multi-platform industry initiative which features marketing and industry leaders in APAC sharing their marketing insights and predictions for the upcoming year.
