The Importance of First-Party Data in a Post-Cookie World

  • Categories:

    Media Strategy, Marketing Automation

  • Date:

    February 9, 2023

The Importance of First-Party Data in a Post-Cookie World

Media Strategy Marketing Automation

“Allow all cookies.” It’s a question wrapped in a statement that’s become ubiquitous with surfing the web in 2023, informing you that the site you’re visiting uses cookies to track you and asking you to agree to let it happen.

However, as you may know, the days of third-party cookies are numbered. In fact, Safari and Firefox have already eradicated them in response to consumer demand for more transparency, choice and control over how their data is used. Google Chrome will hammer the final nail in the third-party cookie coffin when it eliminates them sometime in the next 12 to 18 months. (We still don’t know the exact timing, given that Google has delayed the move several times already.)

What we do know is that cookies have become the cheat code for digital advertisers — and without access to this data, brands will have to turn to different strategies if they want to effectively reach their target audiences.

So, how did digital advertising get hooked on cookies? And what will it mean for advertisers when we no longer have access to this valuable source of consumer data? For a preview of the post-cookie world, I asked Wray Ward’s integrated media strategy group director, John Dasher, and marketing automation senior manager, Liza Carter, those questions and more.

What made third-party cookies so valuable for digital advertising?

Dasher: Cookies helped give advertisers the ability to use an audience-led approach. In other words, advertisers use cookies to follow a target audience through any website without having to commit to buying an ad specifically on the site itself — they’re committing only to buying that impression, which is happening in real time, all the time.

Meanwhile, this audience-led approach respects the end user, because we’re targeting them based on when and how they consume content on their terms. This revolutionized digital marketing. It allowed us to follow users throughout the web, wherever they are, because we had data — known as an identity framework — that could support substantiating who that person was.

Everything about cookies is related to the concept of an identity framework. And that’s essentially what the industry is going to have to address when cookies are entirely removed.

Carter: Behavioral targeting uses people’s activities to determine which advertisements and messages will resonate most with them. It’s cost-effective, and it’s why cookies have been so useful to advertisers.

Some sources for behavioral targeting data include:

  • Campaign engagement: Which emails do people open and click?

  • Website engagement: Once on your site, what are people viewing and clicking on?

  • Product engagement: What products did they add to their cart and purchase?

  • App engagement: How are users interacting with the content in your app?

Ultimately, cookies and behavioral targeting combine to give you specific data about what your audience is doing online, so you can reach them at the right point in their buyer’s journey.

Without cookies, how can marketers still reach their target audiences online?

Carter: The most accurate information a brand has about its customers comes from its customer relationship management system. A CRM database is built on information customers give you willingly and directly when they take an action, such as creating an account or making a purchase.

CRM systems collect real-time, first-party and zero-party (provided) data on customers and prospects. You own this data about your customers, so you can stop guessing who they are.

First-party data is not a replacement for cookies, but it can be an effective supplement by contributing to ad personalization and relevance.

Helpful first-party data points for ad targeting include:

  • Where a customer is in their buying journey — not only speaking to them to convince them to buy but also knowing when they become a customer, so you can stop targeting them with your advertising or pivot to a loyalty campaign

  • Demographic data

  • Inferred interest based on website behavior, including blog topics read or product pages visited

  • Volunteered interest through form fills — filling out topic and subscription preferences, etc. (aka zero-party data)

Dasher: Without access to the data provided by cookies, digital advertising will likely shift from reliance on behavioral targeting to more contextual targeting.

Contextual targeting is a less personalized approach, where you buy an ad based on the content of a given platform. In some ways, this is the most traditional approach to advertising — from a cosmetics company purchasing a print ad in Good Housekeeping magazine back in 1955 to last week, when an athletic wear company bought a TV commercial during an NBA game. With contextual advertising, you’re buying based on an audience and how likely they are to consume certain types of content.

When you talk about contextual targeting through the lens of digital advertising, it’s less about the person and more about the environment they are in — the website itself. While everyone visiting a website won’t necessarily fit the demographic you are targeting, you are reaching people who are exhibiting intent by way of engaging with content that is highly relevant to your brand. In addition, display ads that are contextually targeted help drive greater consumer attention, with a recent study by GumGum, Inc. finding that contextually relevant ads garner 43% more neural engagement and 2.2 times greater ad recall. The study also found that “contextually relevant ads inspired a statistically significant increase in purchase intent.”

How should brands embrace and leverage first-party data in the post-cookie internet?

Carter: If you don’t have a lot of first- and zero-party data, now is the time to plan a collection strategy and determine which data points will drive performance in digital media and other channels. Thankfully, most marketers don’t have to start from ground zero: In 2022, 37% of global brands exclusively used first-party data to personalize the customer experience.

First-party data is valuable because an individual willingly provided it. When it comes to identifying people, first-party data is the best data with the strongest efficacy, because we know who that person is.

In some ways, first-party data is a superior tool for advertisers. Whereas a certain user could potentially be in a package of cookies, this third-party data won’t be as accurate as first-party data, and your messaging can’t be as personalized.

Dasher: Until the industry as a whole figures out what will replace the cookie, tapping into first-party data and leveraging contextual advertising will give advertisers the best chance of reaching their target audience at key moments during the research and inspiration stages.

In the future, the end user will ultimately hold greater control, allowing them to pick and choose how and when they want to disclose their information. In this world, unless the brand can demonstrate clear value to the end user, they’re going to say, “I’m not giving you my data.”

Check out Liza’s blog — 5 Things a CRM Solution Can Do for Your Business — to gain a better understanding of how first-party data can translate into lead generation and consumer trust for your brand.

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