Key takeaways from the article:
- Third-party cookies will disappear sooner or later and consumers will continue to demand for more privacy and transparency from companies they interact with.
- Companies need to therefore shift their focus from third and second-party cookies to zero and first-party data and leverage what they have.
- Subscription businesses are in a great position as they benefit from having a continuous relationship with their customers due to the recurring nature of the business.
You are probably aware of the fact that when you visit a website and leave it with/without making a purchase you are likely to get targeted with ads on other websites, in your inbox and on you social media accounts.
This isn't coincidence. Just website owners making use of cookies (more specifically third-party cookies) to give their website visitors personalised ads on other websites and on social media platforms.
But the digital marketing landscape is soon going to change with the end of the third-party cookies.
In January 2020, Google made the announcement that it will not support third-party cookies in the Google Crome browser.
Following this, other browsers such as Safari, Firefox and Edge already stopped supporting third-party cookies.
It is evident that cookies will disappear sooner or later.
But since Google has over 60% of the market share, the move by Google to ban third-party cookies is of particular relevance to marketers.
On top of that Google said that it will not build or support "alternate identifiers to track individuals as they browse across the web, nor will we use them in our products."
In this article:
- Understanding cookies and how they are used in marketing.
- Data collection solutions in a cookie-less world: zero-party data and first-party cookies.
- Strategies to collect zero-party data and first-party cookies.
- Position of subscription businesses in a cookie less world.
Understanding Cookies and how they are used in marketing
Typically there are three types of cookies, first-party, second-party and third-party cookies. But the ones most commonly in use are first-party cookies and third-party cookies.
- First-party cookies - these are the cookies that are stored on the computer of a website visitor by the website visited by the user and allows the website owner to collect basic analytics data, store passwords and login details, save language preferences and save shopping cart details. These cookies are often used for improving user experience.
- Third-party cookies - these are cookies that are created by websites that you might have previously visited but are not visiting at the moment.
Third-party cookies are used often for re-marketing and retargeting campaigns to get the attention of a user back to their potential purchase.
How retargeting and re-marketing worked so far?
- A shopper visited your website and interacted with it. Cookies tracked the digital activities of this shopper on your website.
- The shopper left the website. A trail of cookies follow the user to other websites. Still being tracked by the cookie.
- The shopper saw your retargeting ad on other websites, on social media platform and in the inbox.
- The shopper clicked on your ad and returned to your website.
- The shopper takes the desired action.
Up until this point this was retargeting.
- You then have the email address of the user that you can use to run additional campaigns and target the user in their inbox.
This is re-marketing.
It may not always be that straightforward and the shopper may return on your website more than one time after seeing a retargetting ad before they make a purchase.
But as you can guess, this will not be the case anymore.
How are Retargeting and Re-marketing Different?
Until now we know that retargeting campaigns often need third-party cookie data to function. But are these two terms the same? Not really.
Re-marketing is a form of campaigning tactics used to reach your previous customers, often via email and SMS. Usually retargeting is purely based on the advertisers first-party cookies such as email address.
The possibility of reaching your existing customers in their inbox is based on first-party data.
Retargeting on the other hand is a campaigning tactics used to reach people who might have interacted with your website and may/may not have performed actions like browsing products, adding products to cart, proceeding to the checkout page etc. on other websites.
The possibility of reaching your prospective customers on other websites (cross-site targeting) is based on third-party cookies.
Nowadays the terms retargeting and re-maketing are used interchangeably. As mentioned above, re-marketing is used to reach previous customers via email but you might have noticed that in your inbox you get emails from companies that you are not a customer of.
Long story short, it’s good to know that there is a technical difference between the two but in practice the tactics itself are used interchangeably.
So what’s the big deal about the end of the third-party cookies?
As you can guess, the phase out of the third party cookies will mean an end of retargeting campaigns that rely on the use of third party cookies.
As it is with online shopping, “98% of website visitors leave without making a purchase.”
Also it takes somewhere between 6 to 8 touchpoints before a Marketing Qualifies Lead turns into a customer. This means that your prospective customers need to have roughly 6 to 8 interactions with your brand before they become a customer.
Here are more insights on online shopping behaviour by SEO Samba:
Conclusion: One interaction with your company/brand is not enough for a customer to make a purchase.
Therefore the benefits of re-marketing and retargeting campaigns have been obvious - they bring shoppers back to your website to make a purchase by constantly reminding them about your product.
So the benefits of retargeting are:
- More touchpoints
- Higher conversion rates
- Higher ROI
But with the end of third-party cookies sooner or later, companies that rely heavily on them need to start strategising and thinking of alternate solutions.
Going forward
The million dollar question at the moment is that will it be possible to reach prospective customers without the use of third party cookies.
The answer is yes. Google is working on multiple solution that will allow marketers to retarget website visitors without accessing any user data. Their solutions include Privacy sandbox and Privcy-preserving marketing APIs.
- Privacy Sandbox
- Privacy-preserving marketing APIs
- Zero party and first party data
1. Privacy Sandbox
Privacy sandbox is a tool by Google that will allow marketers to continue publishing ads to the right audience without having access to the user data.
According to Google, the Sandbox is a secure environment that protects user privacy. The way this works is by aggregating user information and keeping the user-information on the device only. Its core purpose is to facilitate online advertising without the use of third party cookies.
Along with the Sandbox, Google is currently developing and testing alternate technology such as the FloC, a technology that tracks groups and not individuals. Individual users are grouped together in “flocks” with other users that same similar interests. Advertisers will then be able to target groups instead of individual users that share similar interests.
2. Privacy-preserving marketing APIs
Privacy-preservering marketing APIs aim to keep the privacy of Internet users. Since first-party advertiser data will remain the same, technology vendors will create user groups with similar characteristics based on this data. Information about this user group will be stored on the users device. Each campaign will select an interest groups and during an auction, auction participants will be able to bid for users from groups which are important to the advertisers.
Even though Google is working on its own solutions, an increasing amount of importance is being placed on making use of Zero-party data and first-party cookies as they are more user friendly and better for the seller-buyer relationship in the long run.
3. What is zero-party data?
Zero-party data is data that customers intentionally and proactively share with a business. Common types of zero-party data are purchase intention, personal contexts, data on how an individual wants to be recognized, etc. Companies can use zero-party data to personalise the customer experience, improve targeted marketing, and gain insights into customer behavior. Zero-party data is also considered to be more privacy-friendly, as it is collected with the customer's consent and can be controlled and deleted by the customer.
Why collect zero-party data
- Zero party data is directly from the customer and tends to be more accurate and authentic.
- It gives you an opportunity to interact with your customers and give them something to interact with.
- You can collect zero-party data throughout the length of the customer journey.
- You can better understand your website audience without relying on guesswork.
Common ways to collect zero-party data
- Quizzes - Studies show that people tend to enjoy answering questions about themselves and building stronger relationships with businesses. Multiple ecommerce platforms make use of quizzes to engage website visitors and give personalised recommendations in order to reduce browsing time and get to targeted results. This is specially handy for companies that have huge variety of products and can actually benefit from giving personalised recommendations. For example asking your website visitors their bike preferences to give personalised suggestions.
- Discount prompts - Offer your customers a discount or a free trial in exchange for their email. Example: The company RhinoShield offers a 10% discount in exchange for the email.
- Prompting customers to complete user profiles - companies like Adidas and Nike offer their customers to create/complete their profile in exchange for points. Their customers can then use the points to get discounts on products.
- Social media polls - social media polls can be used to identify preferences. They are also very engaging and well received among the audience.
- Onboarding - If there is a possibility to create an onboarding process for your product, then doing so can help you gain valuable insights on who is using your product.
- Post purchase survey - create an interactive post-purchase survey to gather some insights. Companies like Adidas and Nike additionally offer points to their customers in exchange for taking the surves.
- Loyalty programs - By creating a referral program you can encourage your existing customers to spread the word and encourage people in their network to become your customers as well in exchange of some benefit.
For example: with circuly’s Refer a friend feature, your existing customers can get a monetary benefit for recommending your product to people in their network.
4. What is first-party data?
First-party data refers to information that a company collects directly from its customers through their interactions with the company. This includes information such as website usage data, purchase history, and customer service interactions. This data is collected and owned by the company and can be used to personalise the customer experience, improve targeted marketing, and gain insights into customer behavior.
Why collect first-party data
First-party data is considered to be more valuable and reliable than third-party data, which is collected from external sources, because it is directly collected from the customer and therefore is more accurate and contextually relevant.
It also gives companies more control over how the data is used, and the ability to keep it more secure, as it's not shared with third parties. Additionally, many data privacy regulations like GDPR give more rights to individuals when it comes to their first-party data, allowing them to access, correct, or delete this data.
Common ways to collect first-party data
There are several strategies that companies can use to collect first-party data:
- Website analytics: Companies can use tools such as Google Analytics to track user behaviour on their website, including page views, bounce rates, and conversion rates.
- Forms and Surveys: Companies can use forms, surveys, and questionnaires to collect information such as contact details, demographics, and preferences from customers.
- E-commerce: Companies can collect information on customer purchases and browsing history on their e-commerce platforms.
- Customer Service Interactions: Companies can collect information through interactions with customers through customer service channels such as phone, email, and chat.
- Loyalty Programs: Companies can collect information through loyalty programs, such as rewards, membership, and points earned by customers.
- Social Media: Companies can collect information through social media interactions and platforms, such as likes, comments, and shares.
- In-person interactions: Companies can collect information through in-person interactions, such as in-store visits, events, and trade shows.
- Progressive profiling - asking people to give more info that can help profile them.
- Event-based tracking - collect in-depth behavioural data about your users. There are analytics tools that make event-based tracking simple.
It's important for companies to be transparent with customers about how their data will be used and obtain their consent, as well as implement security measures to protect customers' data from unauthorised access or breaches.
Advantageous position of subscription businesses
Subscription businesses are in a great position when it comes to collecting zero-party and first-party data due to the recurring nature of the business. In a subscription-based business model it is easier to build a long-term relationship with your customer since subscriptions cultivate a sense of community among the customers. there is an ongoing relationship of the company with the customers.
How customers behave differently
- When it comes to your product, customers are most likely to report issues directly to you instead of reporting them elsewhere.
- When it comes to your customer, you can ask them to fill out surveys and quizzes that can help you provide them personalised product suggestions.
- Subscribers of a products are in habit of checking/managing their subscriptions in a self-service portal. You can ask your customers to complete their profiles. This is valuable data as it comes directly from the customer.
- You can even ask questions specific to your product than can increase your knowledge about the customer and at the same time help your customers provide information that they think is important for an outstanding subscription experience.
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