It’s time to embrace privacy and differentiate with customer intelligence.

People are demanding more privacy online. Apple Safari, the most used mobile browser in North America, has ended its support for third-party cookies and there are increased penalties for privacy law violations.

This shift toward privacy-centric behavior has significant implications for enterprise companies. Marketing strategies that rely heavily on third-party cookies are disappearing. Serving targeted ads and personalized content to prospects and customers is going to be challenging.

When personal data is harder to obtain, customer intelligence becomes more valuable. In this new era of privacy, every brand is now a data company. It’s important to develop digital transformation strategies that boost your ability to collect and utilize first party data.

It’s time to welcome a new era of privacy. Forward-thinking brands are embracing the end of third-party cookies with new levels of transparency and authentic conversations. To succeed, every company must discover new, genuine ways to collect data and gain insights into their customers.

People care about privacy

When I speak about this new era of privacy and the end of third-party cookies, I often hear people say, “We talk about privacy all of the time. Facebook is in the news. I’m being tracked everywhere. We add digital systems to our homes. Do we really care about privacy?”

The truth is:

“77% of U.S. adults use at least one privacy tool when online.”

Forrester Research*

That could be VPN, an ad blocker, or a privacy-centric browser that blocks third-party cookies by default. This shows how much people value their privacy. It’s our job to create and lead them to a place where they feel comfortable.

Why Third-Party Cookies are a Privacy Concern

HTTP cookies (known simply as cookies) are blocks of data created while someone is browsing a website. They’re built by the web server and placed on a user’s device by the browser. Cookies are an essential part of the modern internet, enabling common functionality like the ubiquitous ecommerce shopping cart.

Third-party cookies, however, are a type of cookies that track online user behavior. They’re used to compile long-term records of people’s browsing history. They allow digital marketers to serve “relevant” ads to each user. And they’re often present when websites feature external content, like banner ads.

The problem is most people don’t realize that third-party cookies allow their activity on one website to be tracked by another. No opt-in or explicit consent is granted to approve this level of tracking. Even more concerning, third-party cookies exploit how Personally Identifiable Information (PII) is used.

It’s been shown that you can personally identify 87% of the people in the U.S. using: 5 Digit Zip Code, Gender, and Full Date of Birth. Think about it. If you visit a site that sells alcohol, you’re immediately sharing two of those three data points, and often, gender can be inferred in other ways.

The use of PII is a very important issue and both governments and major companies are taking notice. European law requires that all websites targeting European Union member states gain “informed consent” from users before storing non-essential cookies on their devices.

GDPR began in 2018, but more privacy-centric laws are coming including:

  • California Consumer Privacy Act*
  • Massachusetts SR-120*
  • New York S5642*
  • Hawaii SB418
  • Maryland SB613

* Penalties are up to $750/user per occurrence

The end is already here. Lack of consent into how PII is used is a primary driver for the move away from third-party cookies. Led by Apple Safari back in 2017 when they started disabling third-party cookies by default, most major web browsers are following suit.

Google Chrome was planning to end support for third-party cookies in 2022, but they recently announced support through the middle of 2023.

Chrome’s extended support for third-party cookies benefits Google more than marketers. It’s important to recognize that the majority of U.S. mobile users are automatically blocking cookies and over 40% of desktop users are doing the same.

Impacts on Brands

Ad Targeting and Retargeting

Brands will have less information about user behavior across the web for targeted ads. Common retargeting techniques are now much more difficult. For example, you can no longer rely on third-party cookies to show an ad to a user who put a pair of shoes in their cart but did not check out.

Measurement and Attributing 

As third-party cookies become less available, multi-touch attribution models will become less reliable. Google Privacy Sandbox is also working on solving this problem with two APIs for aggregated reporting and conversions measurement.

Marketing tool changes

Certain tools are evolving while others are simply being retired, such as Adobe Audience Manager. Marketers should talk to each of their vendors about how their respective solutions utilize third-party cookies and how they’re mitigating the changes.

Online privacy isn’t going away

Privacy is now a marketing imperative 

User expectations, government regulation, and competition will continue to elevate privacy as a critical differentiator for all companies. Successful marketing leaders will embrace this and not view privacy as an area that is the responsibility of legal or IT.

“40% of privacy leaders will report to the CEO.”

Forrester Research**

More data is classified as PII

CCPA and other Consumer protections are expanding the definition of PII.  You will need to support processes and tools to ensure you are managing data in a manner that aligns with your goals and complies with internal policies.

Regulation will continue to increase

Consumer-focused privacy laws will continue to expand. Positioning your team to embrace privacy will serve as both a differentiator and a risk management strategy.

Embracing the Change

You won’t find an apples-to-apples replacement for third-party cookie tracking. Instead, you must adjust your strategy with a collection of approaches that are best for your organization.

Differentiate with Transparency 

Customers know that their data is collected. Studies show that people are uncomfortable when they lack details on what is being collected and how it’s being used.

Use a collection of multiple strategies

There’s no silver bullet to replicate what third-party cookies provide today. Use a collection of strategies to expand your first party data, utilize modern identity resolution techniques, and look more at audiences and context than individuals.

You’re a data company

Every brand is now a data company. This will enable customer intelligence strategies but will also come with new requirements and risks to manage to ensure compliance with regulations and trust with your customers.

First party data will continue to appreciate as a marketing asset. Establishing the necessary structure, processes, and tools to manage and activate your first party customer data is critical to future business success.

Thanks for digging into the importance of privacy and the end of third-party cookies. As you embrace change, there are many new solutions for building, populating, and supporting your own customer intelligence ecosystem. It’s time to create a cookie-less future that’s good for people and good for business.

References

*Base: 47,905 U.S. online adults (18+); Source: Forrester Analytics Consumer Technographics® North American Online Benchmark Survey (Part 2), 2019. Available to Forrester subscribers or for purchase.

**Source: Forrester Research, Enza Iannopollo, “Predictions 2021: Privacy” Stephanie Balaoras, Kate Pesa, Forrester.com, October 25, 2020. Available to Forrester subscribers or for purchase.

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