In the famous “Jurassic Park” lunch scene, Jeff Goldblum’s character Dr. Malcolm lectures Dr. Hammond about the ethics – and lurking dangers – of bringing an extinct species back to life. His speech draws a parallel to the lifespan of third-party cookies, a technology that initially intrigued advertisers who gave little serious thought to consequences. Decades in, those consequences help explain why third-party cookies are on the way out, with Google planning to end support on Chrome by January, 2022, joining Firefox and Safari in blocking them by default.
“It didn’t require any discipline to attain it. You didn’t earn the knowledge for yourselves, so you don’t take any responsibility for it,” Dr. Malcolm says about using DNA breakthroughs to clone dinosaurs. “Your scientists were so preoccupied with whether or not they could that they never stopped to think if they should.”
Marketers in the nascent days of online advertising play the role of Dr. Hammond. Amazed that they could put a bit of code on a device and track it across the internet, they did not think beyond the immediate benefits. Yes, they found a seemingly innocuous way to advertise to prospects and customers when not on their own website, but the mistake was thinking that third-party cookies were a window into a customer journey. The proliferation of ad blockers and privacy browsers is a solid clue that marketers were too clever by half. Tracking a device’s web history, it turned out, was incongruous with personalizing a customer experience with relevant content.
Dr. Malcom’s lesson about discipline, earned knowledge and responsibility hold true here as well. The ease of tracking a device’s web history made it easy to overlook a few inconvenient truths about using the technology as a substitute for gathering first-party data to truly understand a customer’s behaviors, preferences and intent.
Third-Party Cookie Failings
First, device browsing history is a poor substitute for a contextual understanding of an individual customer for a host of reasons, including the fact that customers have multiple devices, each of which can be used by multiple people. Without advanced identity resolution, tracking a device across the internet can easily lead to misguided assumptions about a customer journey.
Second, third-party cookies cannot identify or self-correct for mistakes made by a device’s user. A website visited in error or an inconclusive search term can throw a marketer off track of the real customer journey, leading to false assumptions about customer intent and blowing up contextual understanding.
A lack of context is a death knell for a personalized customer experience, which is the glaring deficiency of third-party cookies as a tool for learning about a customer. Even stipulating that a device is used by the customer you’re marketing to, and the customer is visiting the intended web page or entered the accurate search term in a browser, dropping a third-party cookie loses context with every passing moment. This is familiar to anyone who has visited a product web page, purchased the product on a different channel, yet is still bombarded with product advertising.
Also likely is a scenario where a third-party cookie is never contextually relevant. If a device’s IP address shows a New England location, a third-party cookie on a visit to a sporting goods website may generate an ad for Patriots gear, using a segmentation rule that a New England resident interested in sporting goods is likely a Patriots fan. False assumptions and hedged bets result from the inability of third-party cookies to accurately capture basic customer attributes, much less a customer journey.
Another problem is attribution. Third-party cookies may be useful for some marketers and advertisers for buying look-alike audiences and impressions even though they don’t really know who they’re advertising to, but for marketers trying to personalize the customer experience it’s difficult to attribute spend to an ad generated by a third-party cookie. Unless clicking on the ad takes the customer directly to the website where a purchase is made, it’s difficult to develop a useful attribution model on the backs of third-party cookies.
An Advertising Alternative: Retail Media Networks
Despite its significant shortcomings, the impending demise of the third-party cookie is still causing some consternation from marketers and advertisers accustomed to using third-party cookies as a crutch, or a substitute, for earning first-party customer data that is far more reflective of a customer journey, or customer intent.
One alternative has been for several large brands, including Home Depot, Walgreens, Target and CVS, to create their own retail media networks to sell advertising space on their own channels and partner channels to address ‘known’ customers. This model seeks to capitalize on the shift toward walled garden advertising, which dwarfs advertising on the open web for its power to reach a “captive” known audience.
A Closer Look at First-Party Data
Beyond the need to fill an advertising gap, the phasing out of third-party cookies serves as a reminder that there really is no substitute for first-party data, or what Forrester refers to as “zero-party data” – data a customer volunteers in exchange for a more personalized experience – for providing a contextually relevant, personalized web experience. The undisputed value of first-party data explains the rise of retail media networks, and why marketers are better off ending the reliance on third-party cookies as an imperfect barometer of a customer journey.
Where relying on third-party cookies meant basing a decision or action on something a customer did at a previous point in time that may not have any bearing on the current situation, using first-party and zero-party data as key components of a single customer view allows marketers to instead deliver the best possible message, action or content at the most opportune time.
An example could be offering an ad for a discount on an accessory product to an item a customer just viewed during a session. You’re analyzing real-time behavior and advertising based on that contextual understanding, backed by a single customer view that will also derive that context based on every prior interaction – on any channel.
In “Jurassic Park,” Dr. Hammond learned the hard way that the profitability of a course of action does not necessarily foretell its efficacy. Third-party cookies may not have unleashed the same chaos as the park man-eaters did when used for unintended purposes, but like the dinosaurs they too had their time and place. With their rumored extinction, marketers may be pleasantly surprised by what they can accomplish when their attention is more focused on generating insights from first-party customer data.