The end of cookies: what's next for marketers?

Introduced in 1994, web cookies store information on a user’s computer. This helps various websites to retain information about the user’s login activity. With time, however, cookies have become the bedrock for contextual and personalised marketing.

While cookies have proven to be a staple tool for advertisers in tracking user behavior and gathering consumer insights, it has consistently drawn criticism over consumer privacy. This has prompted strict policy changes on consumer data collection across the world.

In order to avoid controversies, many big tech platforms have opted out of third-party data collection. Google has been strategising an exit for cookies since 2020. The platform has now announced that it will be phasing out the collection of cookies by 2024. Previously, Apple, through its Intelligent Tracking Prevention (ITP), and Mozilla’s Firefox parted ways with the practice.

For many brands, the loss of third-party cookies will mean a paradigm shift in their marketing strategies. Which begs the question: what's next for marketers? 

Here’s what three industry experts have to say.

Edited excerpts:

Brand building will always be the key objective for any marketer. Consumers prefer uninterrupted content, except for the fact that today, they have several ways to block or ignore ads or interruptions, be it through paid subscriptions, installing ad blockers, skipping ads, etc. 

In such a scenario, it’s important for brands to shift from an advertising mindset to that of a publisher, in order to continuously engage and understand the consumers. However, this can be made possible only when there’s proper value exchange between the consumer and the brand. 

Interacting with the customers through personalisation, customisation, gamification, etc., will help the brands to deliver better customer experience. As they spend more time with the brand, this will enable marketers to get deeper consumer insights.

In the process, brands tend to generate a lot of rich first-party data that, beyond mining for insights, is effectively used to generate content and make every media plan efficient. 

For example, at ITC, we have established an insight engine called ‘Sixth Sense’. It constantly looks at relevant trends, by gathering insights from various structured and unstructured sources such as market research, CRM, e-commerce, social media, etc. 

ITC has also established ‘Maestro’, a central customer data repository powered by robust artificial intelligence (AI) engines that helps create consumer cohorts to target communication more effectively. This amplifies the effectiveness and also increases the efficiency of our digital marketing spends.

Today, customers have an unmet personalisation need. Accenture research shows that while most consumers are willing to pay a premium for personalisation, only one in three brands can offer individualised offerings or messaging. 

Sensitivities around consumer data privacy, are at an all-time high, due to heightened consumer awareness, stringent regulations and tech advancements. These concerns are often magnified by data breaches and private data sales. 

Until now, marketers utilised a cookie-based measurement to optimise their spending and personalise online experiences. But third-party cookies are poised to disappear. The impact of the cookie-less future could be in the loss of signals. The transition to the cookie-less future coincides with, and further adds, complexities to the shift in consumer behaviours caused by the COVID pandemic. 

I see this as an opportunity to reimagine the whole business through the lens of experience, be differentiated and move closer to the consumers in three key ways:

With proper data handling, differentiate your brand proposition: Marketers need to build customer confidence by making clear what the customer is getting in return for their data. It translates to robustness and clear visibility of data governance policies, both internally and externally. 

New data strategy: Adopting a durable, consented first-party data strategy, is crucial to creating compelling, personalised user journeys, without using cookies. To monitor what occurs on owned digital platforms, brands must invest more in first-party data. This should be done by finding partners as alternatives to identity resolution for resilient targeting. 

Develop necessary skills/capabilities: It’s important to have an agile team, with relevant skills and capabilities, to manage an organisation’s new data strategy. Technology should be used to reduce the duplication of capabilities across functions. Long-term change in a cookie-less world, will need everyone in the organisation to be aligned on new data strategies and have the right skills needed to enact them.

Cookies have helped brands with insights into a user’s online behaviour. The aim is to find out more about the interests of the user so that you can connect with them contextually. It also helps improve customer experience by saving login data, cart behaviour on websites, etc. 

As far as the alternatives that the brands have, first-party data can be collected, where the brand's owned properties come into the picture. You can also look at using ID providers to save the user data for ads after taking relevant consent. A more controversial way to deal with this, is device fingerprinting, but it leads to privacy issues. 

Brands can leverage the power of these first-party data collection tools: newsletters, social media, POS, surveys, registrations and content marketing. The key to making this entire exercise successful, is consent. It's not intrusive, nor does it lead to any privacy concerns. Don't fix what isn't broken. 

Brands can also use subscription models to develop a network of loyal customers, to whom they can periodically distribute new content and promotions, and add value. Finally, a word of advice, to make the acquisition of first-party data simple, brands must establish meaningful connections with their customers.