Cookies have been a crucial way for marketers to help acutely target and advertise to consumers–but given the future of third-party cookies, which looks bleak, the way businesses go about data collection needs to change. For any brand that uses below-the-line marketing, the impact of the third-party cookie downfall is greatly lessened as the opportunity to collect first-party data is rife and abundant. Read on to see how brands can continue collecting consumer data in the coming cookieless climate and stay on top of promotions.
The value and scepticism surrounding cookies
For those who don’t know or need a reminder of what cookies are and how they work, think of cookies as information from a website. They’re stored inside your web browser so the website can retrieve and remember details from previous web visits. Think of it like someone noting down and finding out your likes and preferences so that they can make a good impression the next time they meet you. The general goal of cookies is to track, save, and personalise user experiences.
If we follow the metaphor of someone noting down preferences: we can compare first-party cookies to someone remembering and noting down what you’ve told them, and third-party cookies as someone sleuthing around and learning about you through other people’s records to try and sell you things that interest you.
Now, the idea of someone snooping around for your information without you being asked directly or offering said information willingly isn’t exactly an appealing scenario. So it’s no wonder that consumers are becoming more hesitant and sceptical of third-party cookies. Seeing as cookies are viewed in an ‘enemy-of-the-people’ sort of light, and rightfully so in some scenarios,–what’s the way forward, particularly for data collection, in this anti-cookie climate?
Interestingly enough, it’s (mostly) still cookies.
It seems a little counterintuitive at first, but there’s a great variety of cookies with different purposes and functions. The main type that consumers find fault with is third-party cookies. Surrendering your details to a mysterious party whose website you aren’t even visiting isn’t exactly an appealing prospect. It no doubt feels dubious, and this consumer concern has been responded to by a few web browsers like Safari and Firefox who’ve been blocking third-party cookies for years now. Chrome had promised to stop using them by the end of 2023, but since then, the deadline has moved: now Chrome Developers have said the “phase out will be gradual, starting from midway through 2024.”
If that doesn’t convince you to jump the (third-party cookie) ship, Google published a report to investigate the impact of disabling third-party cookies on the ad revenue of publishers. While some publishers saw minor losses (i.e. less than 10%), the majority of publishers experienced a loss from 60% to 70%.
Consequences of handling data poorly
As previously stated, the anti-cookie attitude is not new, users have always been a bit wary about their privacy. Yet as knowledge of how their data is being distributed grows and more scandals in the tech industry have arisen regarding invasions of privacy, consumers are more concerned about their personal information than ever before.
According to Legaljobs, 79% of global Internet users feel as though they’ve lost control over their data.
One prominent example is the likes of Facebook’s Cambridge Analytica Scandal, which had users all over the globe evaluate the way their data was being used by tech giants. People were faced with the very real scenario that their data was being weaponised to commit, what some would say, ‘psychological warfare’ in the political landscape. “Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” says Federal Trade Commission (FTC) chairman, Joe Simons.
Not only were they (Facebook and Cambridge Analytica) chewed out by the FTC, which later led to more investigations into how consumer data was being used, but they saw serious damage to their reputation. Facebook founder, chairman, and CEO, Mark Zuckerberg, faced political and public scrutiny in his examination by the Democratic lawmaker, Alexandria Ocasio-Cortez regarding Cambridge Analytica–with video clips of this examination going viral several times. One such clip uploaded by the Guardian News received close to 9 million views. Another video was uploaded by the Washington Post, comedically highlighting Zuckerberg’s responses and reactions. The video received 5.7 million views. Safe to say, Facebook is still feeling the ramifications of this scandal after their thorough legal and online humiliation. Marketers must remain vigilant to such brand reputational risks.
All this fear surrounding data tracking and technophobia as a whole means user consent has taken centre stage. Calling for serious damage to reputation and backlash for companies who may infringe on user privacy and for them to use other ways to collect data that don’t cross these boundaries.
Serious infringements, like breaching the Information Commissioner's Office (ICO’s) legislation can result in serious repercussions, as written by the ICO themselves, “a monetary penalty of up to £17.5 million, or 4% of your [the offending party’s] total worldwide annual turnover, whichever is higher.” As well as being legally prosecuted and held liable for misconduct or, in most circumstances, a more light-handed punishment of a reprimand and enforcement notice.
The other options for third-party cookies
Let’s make it clear: when we say ‘alternatives to cookies’, we only mean alternatives to third-party cookies. First-party cookies are currently still an integral tool for marketers to collect analytics data, track behaviour, and enhance general user experiences through features like autofill, saving items in a basket, auto-sign-in, and more. So what makes first-party cookies ‘OK’ whilst third-party cookies are so contentious?
For starters, first-party cookies are only shared between the user and the website owner. Any information that the user willingly provides is only seen by the website owner and is not accessible to anyone else, which is within the reasonable bounds of what users expect. The main issue for users is their privacy, or rather, lack thereof when it comes to third-party cookies. As such, there are several replacements and alternative options to facilitate data tracking and collection. Here are just a few examples:
This is Google’s industry-wide initiative to replace third-party cookies and block tracking techniques like fingerprinting and preserve privacy by restricting the amount of information that can be accessed.
Since its inception, the Privacy Sandbox has been met with a lot of scepticism and concerns. Many have questioned whether the Sandbox is an effort made in ‘good faith’ to protect user privacy and improve business data for advertisers. Some have suspected the Sandbox as a way for Google to tighten their hold and dominance on digital advertising. With Google Chrome holding 62.85% of the global market share for web browsers, any changes to their engine will have massive impacts on the industry at large. This has posed so much of a concern that the Privacy Sandbox has been consistently monitored by the UK’s Competition and Markets Authority (CMA). In fact, in February 2022 “a legally-binding framework to address our [the CMA’s] competition concerns” was accepted and put into place.
Moreover, Google has not particularly been transparent or clear about the Privacy Sandbox’s first public test results nor about the outcomes of results, which has left many advertisers worried about what’s to come, as well as how exactly the Sandbox will work and how it will benefit both consumers and businesses.
Currently, this solution is still in development and being tested by third parties, as proposed by the CMA, to monitor the impact of the Sandbox. The impact of the Privacy Sandbox is to be tested by Google around mid-2024 and they will be working closely with CMA and the Information Commissioner's Office (ICO) with tests from market participants to also be taken into account.
DIDs are a string of numbers that help identify devices individually and provide information on consumer device interactions and behaviours for marketers. Things like downloads, location, and purchases are valuable pieces of insights that marketers can access through DIDs. The value of DIDs becomes particularly impressive when we consider the huge surge in mobile usage and the added benefit that DIDs last the entire lifetime of the device.
Yet the future of DIDs is also looking bleak. Previously, DIDs were quite often automatically shared and opted-in. Yet as devices implement more and more updates, DIDs have become something users have to manually opt in for. That being said, given the choice between staying private or sharing all sorts of details, users will likely choose to keep that to themselves.
While the future of DIDs and third-party data isn't looking bright, the case for first-party data is much more promising.
First-party data includes PII, which is any sort of detail about someone like their name, email, DOB, debit card details, and address. Since the nature of this information is highly sensitive and private, it can be hard to obtain. The only way for sites to get this kind of information is if the users themselves input it into the website somewhere, like a sign-up, or promotion entry form (with correct opt-in of course), and it is limited to the website users are on. Not only is this a great way for marketers to gather highly relevant data since users are active users of their website, but it also provides the audience with lots of control over their information making this situation a win-win for both sides.
Although the data pool would be much smaller than if marketers were to utilise third-party cookies. PII gathered from your audience over time is arguably much more valuable to marketers than general preferences and details of consumers who: may not have any interest in your brand or; are completely outside your target audience. Step forward please, BTL (Below The Line) digital data capture opportunities.
Summarising benefits and issues of the proposed alternatives
Considering the alternative to using first-party cookies and the like is the possibility of your details being shared with unknown third parties. For users, these substitutes feel safer and are much more comforting, but what about for marketers and businesses who want to learn more about their audience? For years, they’ve relied on third-party cookies so do these alternatives live up to tried-and-true methods of data collection?
Using these alternative methods ultimately will not yield the same results and outcomes as using third-party cookies. Since they’re gathering data in a completely different way, we can’t expect a perfect replacement. Otherwise, the alternative will eventually and swiftly be substituted as well. The nature of being fundamentally different provides the advantage of providing a whole new set of advantages and outlooks on the way marketing teams are going about data collection.
Narrowing down the data collection scope to active users of your website, actual customers, and prospective clients will provide more specific and helpful insights. Of course, the data range isn’t as broad as it would be when using third-party cookies, but it can be argued that all the data collected with ‘cookieless’ tracking will be much more useful and informative.
In the end, whether marketers like it or not, third-party cookies are being phased out and new methods of data collection are needed. The more data there is and the more relevant it is, the better our insights are. Marketers and brands should not hesitate to use several data collection methods to enhance their understanding of consumers.
Gathering & organising data through first-party cookies in the context of promotions
With the development of the Privacy Sandbox remaining relatively ambiguous, first-party cookies seem to be the most actionable way forward. So when it comes to its biggest issue, gathering enough data; how can marketers and brands ensure they’re gathering sufficient data to a degree where it is accurate and valuable?
Firstly, there needs to be a fair value exchange for consumers’ information. As mentioned previously, details are more guarded under a ‘first-party data collection route,’ so there needs to be an incentive for customers to share that information. There are plenty of ways to incentivise customers to share their data through things such as promotions, competitions, loyalty and reward programs, and exclusive content such as newsletters or emails just to name a few.
Amassing plenty of quality data is all well and good, but without the right organisational tools or methods, marketers may as well not collect data to begin with. So how are ways marketers and brands can organise streams of data gathered through first-party cookie consent? One such way is through data layers.
A data layer is an object in Javascript which helps standardise all the data that’s collected by a website. It’s an integration in a website that contains all the data that’s generated by user engagement and enables a flexible and reliable way of collecting data. Essentially, the data layer collects the data; powering tools with the data they need and allowing consumer data platforms (CDP) to work. Having data organised in a standardised format allows brands and marketers to build a strategy and take action based on the data more effectively.
With appropriate cookie consent, detailed insights can be gained through the construction of user profiles based on visitors’ engagement and activity across brand sites, and behaviours. For example, on the promotional platform cinchpresents.co.uk, UserIDs of promotions participants are associated with user activity on the primary car-buying site cinch.co.uk, as per subject to cookies. This allows marketers to capitalise on these insights and broaden their understanding of consumer behaviours, buying intent, and shopper conversions which ultimately, is the goal of promotions.
To sum up, marketers will find that organising and collecting first-party data by using a data layer, allows for better insights into consumer behaviour which is beneficial in all kinds of marketing tactics and channels, such as, but not limited to, digital promotions.
Want to learn more about how your business can benefit? With cookie compliance built in, we can help. Speak with a PromoNow expert to learn more.
