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For years, marketers have been preparing for the disappearance of third-party cookies, as Google made plans to phase out the data tracking tool in favour of increasing user privacy. Now that the cookie is staying, all of that prep is not for nothing: it’s helped pave the way for a new era of data-informed personalisation.
This week, Google announced that it was no longer planning to entirely remove (or deprecate) third-party cookies; instead, they plan to give users a choice. This might come as a relief to marketers desperate for data, but it’s unlikely to dramatically change existing strategies. It turns out that relying on owned customer information and diversifying from third-party cookies has already paid off. “While the announcement feels like a big deal, realistically, the challenge of getting customers to share data about themselves isn’t easing up,” says Stephanie Liu, privacy and marketing analyst at research firm Forrester.
Third-party cookies provide user data that marketers can acquire from data aggregators in the hopes that they can target customers with relevant ads and content, and Chrome is by far the most popular web browser for this to play out. In recent years, marketers have been leaning more on information that is gathered directly from their own customers, often called first-party data (tracking behaviour on their owned properties) and zero-party data (information explicitly provided by customers).
It’s not just because of Google. Liu additionally points to other privacy regulations that require further consent, consumers electing to proactively limit how much data they share, other browser and operating system restrictions (such as from Safari and Firefox), and the rise of so-called “walled gardens” (closed ecosystems) that limit the data that is available to brands. Many have found that “first-party data can offer a more accurate and contextually relevant view of customer behaviour and preferences”, says Eduardo Garcia, analyst at software marketplace Capterra.
Already, a lot of popular media formats, including retail media networks, and connected TV and mobile apps, don’t rely on third-party cookies, notes Martin Kihn, SVP of market strategy at Salesforce Marketing Cloud. “Most media dollars already don’t use them.”
And Google isn’t totally “throwing in the towel” on deprecating the third-party cookies; rather, it is “simply shifting strategies — asking users for their preferences instead of making the decision for them”, notes Derek Slager, founder and chief technology officer of Amperity, which works with Coach parent company Tapestry Group, among others, to build customer data platforms and analytics. Slager compares it to Apple’s App Tracking Transparency (ATT) privacy framework, which requires app makers to request permission to track behaviours via a pop-up. Using that as a model, brands should expect an additional 70 to 80 per cent loss as these options are presented to users directly, Slager says.
So while it’s a reversal on Google’s part, it’s not a reversal in strategy for marketers, especially in an era of personalisation innovation. “They should not step back on their new-found focus on first-party data,” Garcia advises. “On the contrary, it can become even more central to personalisation and targeting strategies. With Google cookies still in play but under new constraints, the ability to leverage direct customer interactions and preferences will be vital for effective personalisation and driving conversions.”
Experts advise that while Google’s reversal may take the pressure off of marketers, shifting to rely on strategies outside of Google cookies continues to be smart business.
Already, the anticipation of the change has been beneficial to marketers because it has encouraged the use of first-party and zero-party data that is more relevant, emphasising behavioural information (what people click on and buy) instead of often-arbitrary demographic information (someone’s gender or age). They introduced or revamped their loyalty programmes, and offered different incentives for sharing data, like free shipping or reduced return fees, Garcia adds. Think of Stitch Fix’s Style Shuffle, which asks people to vote on what they would wear, Rent the Runway’s rating prompt for when rented items are returned, or ‘favoriting’ or ‘saving’ items while signed in to a retailer’s app or website. These are all ways that retailers explicitly ask for feedback to personalise their services.
Forrester’s Liu notes that beauty brands specifically have been forward-thinking in this approach, having solicited customer beauty profiles with details that can be impossible to buy and difficult to infer through third-party data, such as skin tone, skin type or hair type. She points to companies including Shiseido, Nars, L’Oréal and Sephora, who have built loyalty programmes, product quizzes and sweepstakes to learn more about their customers.
Despite the high relevance of this so-called ‘sentiment data’ — such as feedback, favourites and reviews — it is still underutilised, Garcia says, with an estimated 36 per cent of marketers collecting it, even though customers would share this type of data willingly.
Recent advancements in AI and machine learning have enabled better analysis of customer behaviour, allowing for more precise and relevant recommendations, Garcia says. It also enables retailers to capture and respond to preferences in real time, which can ultimately improve conversion rates.
While machine learning can and does use third-party data to “fill in the gaps”, data that is directly gathered from one’s own customers can be more specific and contextual, ultimately making it more valuable. “With machine learning models, quality always beats quantity,” says Garcia. “The reversal of this decision means that third-party data can still be leveraged, but the question should be asked, ‘Should it be used if measures have been implemented to use first-party data that is higher quality?’”
This is why Kihn predicts that future investments by brands will focus on “capturing and harmonising” trusted, first-party data with consent. L’Oréal’s Beauty Genius app, which is a ‘beauty assistant’ powered by generative artificial intelligence, shows just “how powerful highly personalised one-to-one marketing can be”.
Government regulations (such as the UK’s General Data Protection Regulation and the California Privacy Rights Act, which require sites to request permission) and consumer sensitivity have made transparency a hot topic. In a post sharing the update, Google’s Anthony Chavez, who is VP of its Privacy Sandbox initiative, said that the updated approach “elevates user choice”. This update should be viewed as a chance to reinforce and optimise these foundations in anticipation of a privacy-centric future, Slager says. He advises brand clients to communicate ethical data collection practices transparently with customers, including the value they receive in exchange.
This shift is a continuation rather than a complete overhaul, allowing for gradual adaptation, Garcia notes, adding that 84 per cent of consumers would be more willing to share their personal information if they knew what was being collected and why, according to a Capterra survey. Additionally, 86 per cent of digital consumers feel forced into providing personal information to access web content at least some of the time, leading to 72 per cent of people saying they sometimes provide fake personal information to access content.
As AI personalisation proliferates — marketers are experimenting with using customised, auto-generated language in emails and on e-commerce sites — disclosures are also becoming a part of daily life. TikTok and Meta, for example, require labels on AI-generated content.
Perhaps Google’s reversal is a relief, but don’t expect a long-term impact on fashion and beauty, Kihn says. “There are a lot of forces moving against third-party cookies — this makes me think they aren’t a real long-term solution.”
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