The landscape for how marketers engage with customers is undergoing change at a pace unrivaled since the dawn of the internet. That pace is about to quicken, as third-party cookies become a relic of the past – a shortcut for marketers that has been obstructed to the point they are no longer a viable path to revenue. Marketers are now forced to gain an understanding of customers through methods outside of third-party cookies due to a combination of consumer fatigue, increasingly stringent CCPA and GDPR data regulations, and tech platforms such as Google and Apple steering clear of universal identifiers.
There is a palpable fear that sweeping change will make it more difficult to engage digitally with relevant content, which is why prospective replacements for the third-party cookie are garnering so much interest, and why we’re seeing some brands get creative with opt-in requests.
To date, the knee-jerk response to uncertainty has been brands and advertisers trying to stay a step ahead of increasing privacy demands by essentially doing the same things – only differently.
In many ways, the analogy of re-arranging the deck chairs on the Titanic holds true. The focus is misplaced. Marketers’ eyes may be on the right prize – a relevant customer experience – but the preparation is, in many cases, largely taken from the standpoint of what’s good for the brand rather than the customer. But replacement methods and back-door tracking attempts miss the key point that changes are on the horizon precisely because consumers have made it clear that many of the traditional methods of engagement are no longer acceptable. They are declaring “enough is enough.”
Customers Want Brands to Be Relevant
Rather than finding a new way to track an anonymous person across the internet, brands will be far better served focusing on delivering sustained relevance across an entire customer journey. Persistent relevance – a hyper-personalized action that delights a customer at the moment of interaction – comes from building a relationship with a customer that is built on trust.
Trust, as I’ve written before, is integral to brand promise and is manifested by the experience a customer receives that demonstrates a brand’s deep understanding of each customer. A customer who believes a brand recognizes and values them individually responds with loyalty. In a recent Dynata Research study, commissioned by Redpoint, 70 percent of customers said that they will only shop with brands that personally understand them.
Customers measure value by the relevance of the experience a brand delivers. Achieving and persisting relevance is dependent on a deep understanding of the individual. The key ingredient – perfect data. In return for a superior personalized experience, customers say they are willing to share more about their needs, preferences and behaviors. In a Harris Poll commissioned by Redpoint, 54 percent of consumer said they are willing to share personal data for a more personalized experience – with conditions. Namely, 74 percent say it’s important or essential for a brand to share how their personal data is being collected and used. The use of third-party cookies or alternate identifiers simply fail to meet this standard.
Relevance Begins with First-Party Data
The key to delivering superior customer experiences is creating, maintaining and effectively utilizing perfect data about each customer. The fundamental building block of perfect data is first-party data. Everything else is just a form of proxy for trying to identify and understand the customer.
The notion of elevating first-party customer data may seem intuitive, but it still poses a challenge to many organizations. According to Gartner, a lack of the right type of data and poor data quality are the top two data and analysis challenges that prevent organizations from making data-informed decisions, cited by 31 percent and 28 percent of respondents, respectively, as “very challenging.”
What Does It All Mean?
A lack of the right type of data is an indictment on the misguided reliance on third-party cookies. Third-party cookies never were anything more than a way to buy access to a consumer segment with little attention paid to sustaining relevance. Advertisers may continue to scramble to find new ways to track a customer’s digital footprint and make claims about privacy enhancements along the way, but replacement methods created for the benefit of an advertiser or brand miss the point – and customers take notice.
In sharp contrast, first-party data provides the foundation for having perfect data about each person, giving brands the insight to earn that customer and persist a relationship. Proper use of first-party customer data reinforces the deepening value exchange and underpins a brand’s ability to use superior experience delivery as a strategic asset and revenue-generating capability.