How Marketers Are Preparing for Google's Third-Party Cookie Phaseout

Over the past few years, consumers have become increasingly concerned with how companies use their data. And many feel passionate about protecting their privacy — in fact, HubSpot's Blog Research found 80% of consumers believe data privacy is a human right.

Data security has become a critical component for long-term customer retention and loyalty. So it's vital brands behave responsibly when it comes to collecting and protecting consumer data.

But many marketers have relied on third-party data for years, so the phaseout of Google's third-party cookie in 2023 will likely cause some concern. Fortunately, it doesn't have to.

Here, let's explore the effective strategies marketers will implement to ensure they're still reaching new audiences and connecting with customers even without third-party data.

How Marketers are Preparing for Google's Third-Party Cookie Phaseout

1. Marketers are enhancing or developing their data collection operations and management models.

One surefire way to prepare for the third-party cookie phaseout? Begin developing or refining a strong first-data party data strategy.

As Microsoft Advertising's Head of Evangelism, John Lee, told me, "Microsoft Advertising is working with the digital advertising industry and its clients to evolve and uplevel data privacy maturity for a privacy-first cookieless world. While there is no market-ready solution available today that manages data end-to-end, our guidance for our clients is to take steps now to prepare a first-party data strategy and to conduct robust data management practices."

He adds, "First-party will lead the way and now is the time to ensure that you have the best resources and information available to enhance or develop data collection operations and management models. It is your ability to communicate with your customers transparently and in a personalized, yet meaningful way, that will enable better relationships and business success in the future."

Ultimately, creating a strong first-party data management framework will enable your entire organization to transition seamlessly off third-party data while continuing to reach new prospects and leads.

To create an effective enterprise data management strategy, take a look at Everything You Need to Know About Data Management.

2. Marketers are gathering customer data through email marketing.

Cynthia Price, Litmus' SVP of Marketing, believes email marketing is a powerful option for continuing to collect customer and prospect data instead of relying on third-party cookies.

As Price puts it, "About eight in 10 marketers depend on third-party cookies, so when they do vanish, those who haven't adapted their data structures and their data-gathering processes will struggle to effectively personalize their email programs."

To combat these challenges, marketers will need to shift to ensure their email strategies leverage first-party data. This will help you create a more individualized email experience. 

Price suggests, "Email can be used to gather customer and prospect data with new, evolving email software and with dynamic content templates. Forms, in-email purchase options, and customizable marketing paths are all valid, successful tactics to use in order to garner more first-hand recipient information."

Price adds, "Brands with siloed data structures have been unable to achieve a full, single view of their customers, with data getting pulled into multiple directions."

Price says, "The evolution of privacy regulations will put email even more at the center of the marketing mix — as the channel that offers the most comprehensive view into zero and first-party data, and the ability to use it effectively."

She continues, "This adoption of zero and first-party data will also allow for more practical uses of AI in email, with AMP and dynamic content automation."

3. Marketers are focusing more on customer loyalty and retention.

The phaseout of third-party cookies will impact how some marketers acquire new customers, but it won't impact how marketers retain existing customers — which is why some marketers will adjust to this third-party phaseout by refocusing their efforts.

SVP of Marketing at Cordial, Carrie Parker, says, "The phaseout of Google's third-party cookies is forcing marketers and advertisers to think about engaging their customers and audiences in more personal and authentic ways. With cookies going away, acquiring new customers will become more complex, but on the other hand, retaining customers will be a much more critical piece of the puzzle than in the past."

She adds, "More marketers are increasingly focusing on loyalty and retention within their current customer base, enhancing their experience with the insights readily available that consumers have provided."

Parker told me Cordial recently conducted a study and found 70% of consumers dislike online ads that target them using websites and products they've viewed — and, on the contrary, more than eight in 10 consumers are more likely to buy from stores and brands that communicate with them in personal, relevant ways.

Parker continues, "Consumers want more from companies when it comes to personalization than what they're receiving from most brands these days. Personalization does not mean inserting a name on an email and hitting send. Instead, it requires considering the value added to the consumer and keeping them loyal customers. With cookies going away, first-party data strategies allow brands to emphasize personalization, loyalty, and retention of their customers. Brands can use their customer base and provide something of value to make them come back."

Ultimately, the phaseout of the third-party cookie is a good opportunity to re-evaluate how you're interacting with both new and existing customers. First-party data strategies will ultimately help you better connect with your customers.

4. Marketers will focus on the best impressions rather than the best users.

Melinda Han Williams, Chief Data Scientist at Dstillery, says, "One of the most challenging aspects of preparing for this transition is that any good campaign will include a portfolio of post-cookie solutions and technologies after third-party cookies are gone. Even the marketers who are furthest along in their post-cookie testing journeys may still have much more preparation to do."

She adds, "New identity solutions, such as UID2 and RampID, allow advertisers to reach people who have opted-in to tracking and addressability. Marketers who have tested these solutions have progressed toward post-cookie readiness, but they're not done yet."

"Why? Because some people don't want to be tracked on the internet."

Williams points out that marketers need to prepare solutions to reach people without tracking them or compromising their privacy or preferences.

The solution here? Understanding you might not need that much data about each customer in the first place.

As Williams told me, "The good news is you don't need to know who someone is to know whether they'd be receptive to your message. Today's artificial intelligence (AI) enables marketers to choose the best impressions rather than the best users."

She adds, "Once you reframe the problem this way, rather than trying to find out as much about the user as possible with increasingly limited data, it is possible to do inventory-based targeting with performance and scale rivaling the cookie-based, tracking-based solutions that will soon be retired."

Change is always difficult, particularly when it comes to the ways in which marketers reach new audiences. Fortunately, this change is likely for the best. Shifting to a first-party data model will help your organization appeal to the majority of consumers who are hesitant to share their data with companies, and it will set you up for long-term growth after Google's third-party phaseout.

Originally published Jun 13, 2022 7:00:00 AM, updated June 13 2022