If you’ve been following the ups and downs of Google’s decision to eliminate third-party cookies in Chrome, you already know they’ve dropped their plans to do so—at least for now. But that doesn’t mean the problem is going away. Google’s decision simply means that third-party cookies are dying a slow death rather than a sudden one.
What does that mean for ecommerce businesses? Frankly, not much. While Google Chrome is unquestionably the most popular browser, this is bigger than Google. Consumer data privacy regulations, browser and operating system restrictions, walled gardens, and overall dissatisfaction among consumers over how their data is being used have already significantly throttled marketers’ ability to collect and effectively use third-party data. In other words, carry on with whatever survival plans you had for a world without third-party cookies.
Data Deprecation is Already Here
Data deprecation is defined as a slow decline in the quality and value of data. With the rise in data privacy concerns and restrictions, marketers are slowly losing the ability to identify and track consumers across the internet. Google’s current plan is to put the decision in consumers’ hands, prompting them to opt-in or out of personalized ads (i.e., share personal data), though what that prompt says and where they see it has yet to be figured out. That doesn’t bode well for marketers.
The vast majority of consumers, when asked, opt out of ad tracking. When Apple introduced App Tracking Transparency (ATT) in 2021, visitors to its app store were prompted to opt in or out of personalized ads; 78% opted out. Two years later, opt-in rates among iOS users averaged only 34%. Some 40% of Chrome users have already manually disabled cookies, even without a prompt.
That’s just one small part of the picture. Consider that at least 25% of the browser market (i.e., Safari, Firefox and others) is already “cookieless” and that currently 52% of the US mobile market owns an iPhone which automatically hides their IDFA (Identifier for Advertisers). The privacy train has left the station.
What’s an Ecommerce Brand to do?
Third-party cookies aren’t the be-all and end-all of marketing. In fact, 3rd party data is relatively unreliable and difficult to parse. Ultimately, the only data you can really trust is the data you’ve already collected from your existing customers or trusted sources. Once you accept this reality, it becomes easier to reduce your reliance on third-party cookies and lean into first- and second-party data strategies moving forward.
1. Prioritize the Collection and Authentication of First-Party Data
First-party data consists of data obtained through your own website cookies, as well as data your customers have willingly given you (a.k.a. zero-party data). It includes email addresses, phone numbers, physical addresses, purchase history, product preferences, customer service interactions and more. First-party data is far superior to other types of data and here’s why:
It is 100% trustworthy because it comes directly from the customer.
It is less expensive and easier to obtain than second- or third-party data.
Consolidating and analyzing first-party data to develop detailed customer profiles leads to more accurate targeting, higher conversion rates, and a higher return on ad spending.
First-party data more accurately informs acquisition strategies, allowing you to reduce risk and focus your marketing dollars where they are most effective.
A healthy, vetted customer list is an asset that adds value to your brand in the eyes of potential partners and investors.
“First-party data is truly the gold standard in this new era of data privacy,” says Jon Santee, Vice President of IT at ShipMonk. “Building and nurturing this data is exactly what ecommerce brands need to do. The balance will be collecting this data without being too heavy handed with the techniques used in gathering.”
Strategies that increase the quantity or improve the quality of first-party data should be your first priority. Next, implement an authentication-based identity platform to match user IDs to their personal data. Lastly, explore ways to increase engagement and gain valuable insights from these customers.
2. Explore Second-Party Data
Second-party data consists of data purchased from trusted publishers—digital content providers that sell ad space to third-parties. Sources include websites, digital media platforms, blogs, podcasts, video content creators, apps, games, and software platforms.
Publishers work hard to identify and segment their audience in their efforts to attract advertising dollars. It is in their best interest to supply accurate data.
Consumers trust the content creators they follow. Data sharing opt-in rates for publishers are much higher (60% to 70%) than for browsers. While a publisher’s audience may not match your customer profile perfectly, their data can help expand your reach.
Case studies from ad tech provider Amperity show that merging first-party data with publisher data improved reach, reduced customer acquisition costs by 55% and increased conversions by 300%.
3. Consider Clean Rooms
Data clean rooms allow partners who share well-defined audiences and business objectives to share first-party data without compromising consumer privacy. The data is anonymized and managed by a third-party provider, while partners have full control over how, when, and where their data can be used.
4. Invest in AdTech and MarTech Solutions
Tech is rapidly adapting to this new reality and providing brands with alternative ways to collect data and use it more effectively while safeguarding privacy.
Apple’s new SKAdNetwork (SKAN) was developed in the wake of ATT to give marketers a reliable way to measure ad effectiveness and conversion without jeopardizing consumer privacy.
Similarly, Google’s Privacy Sandbox is a work in progress that should improve over time.
AI and machine learning are revolutionizing traditional targeting methods such as user segmentation and contextual advertising by analyzing first-party data, publisher data, page content, and cost per click to optimize marketing tactics and reduce risk.
Tools for email authentication and on-device targeting can improve addressability issues.
The Good News
It’s not all bad news. In fact, much good can come of utilizing a privacy-first marketing strategy. “Data privacy isn’t just a hurdle but an opportunity,” explains Santee. “By focusing on trust and transparency, brands can turn what seems like a challenge into a real advantage.”
DTC ecommerce brands have a strong advantage over brands that sell only on marketplaces or through retailers where they have no direct relationship with customers. By controlling the user experience and fulfillment process DTC brands have many opportunities to engage with customers and gain a wealth of first-party data insights.
Just because you can’t identify a visitor on your app or website doesn’t mean you can’t market to them. Well-crafted content, a great user experience, return policy, speedy checkout, and fast affordable shipping options increase conversions and may convince a user to opt-in next time they visit.
Additional data from Apple indicates that conversion rates between those who disable cookies and those who enable them are nearly identical.
Meeting customers’ preferences for data privacy develops trust, which leads to greater customer engagement and loyalty.
When IP addresses and IDFAs cannot easily be shared, customer data cannot be misappropriated as easily. That’s good news for everyone.
The bottom line? If your business owns its own first-party data, focus on collecting more of it and invest in tools to help you do more with it. Data privacy concerns are not going away.
