Opinion: Should marketers be worried about third-party cookies phasing out?

Brands have always relied on cookies to track their customers' digital footprints, habits and behaviours, as well as to measure the success of digital campaigns. But with third-party cookies gradually being phased out on Safari, Firefox and Chrome browsers, what is the impact on the marketing ecosystem? It depends on whether marketers view the glass as half empty or half full.

On one hand, a cookie-less world means that brands lose the ability to easily tap external data to understand customers. On the other hand, a cookie-less world draws out greater creativity in digital marketing. It will push brands to work much harder to build trust, in order for customers to willingly share data about themselves. Marketers need to focus on hyper-personalisation, and pivot towards new ways of collecting customer data to understand their wants and needs.

The first eight seconds form the golden moment to engage millennials and Gen Zs

According to a Gartner survey, brands stand to lose 38% of their customers due to poor personalisation practices.

This is noteworthy as the new breed of consumers are millennials and Gen Zs, which form more than half of the population in Asia. They are no longer entertained by one-size-fit-all engagements, and have a short attention span of only eight seconds, according to a report by Sparks & Honey.      

For brands to connect with them, the first eight seconds of engagement are crucial. If brands get it right, they may well be off to a good start in achieving the holy grail of marketing – trust, loyalty and advocacy. This means that brands must establish a one-on-one relationship with this important group of consumers. In order to win their hearts, marketers first need to understand their unique preferences and engage with them as if they have known their customers as friends for years. This is the heart of hyper-personalisation and is the first step towards achieving the holy grail.      

Building hyper-personalised relationships with zero-party data

Collecting personal data is crucial to understanding millennials and Gen-Z customers. Yet, it is increasingly difficult with the phasing out of third-party cookies.  Consumers are regaining control over what and how they want brands to know about them.

The good news is, brands can now turn to customers directly. eMarketer found that 80% of consumers are comfortable sharing personal information with a brand if it leads to a personalised and easier experience.

Forrester termed this zero-party data – data that a customer intentionally and proactively shares in exchange for a better experience. By asking a customer directly about who they are, what they like and how they want to be engaged, brands can collect accurate information on motivations, intentions, interests and preferences of each individual at scale.

Here are three things that brands should do with zero-party data to operate effectively and bring about hyper-personalisation in a cookie-less world.

1. Collect zero-party data continuously across all key moments in a customer’s journey

Most companies collect zero-party data during new user registration or onboarding, however they haven’t thought about a more continuous zero-party data dialogue to have with customers and prospective customers. There are countless opportunities to ask existing customers about their preferences and purchase intentions in day-to-day interactions. From exploring the website, making a purchase, to even dropping off before purchasing, zero-party data can be collected from each customer using a variety of methods including online surveys, polls, emails and app notifications.

For example, a big retail brand that Medallia recently worked with delivered a personalised referral campaign that tailored its offerings based on post-purchase feedback survey. Customers are asked to indicate their level of interest in a friends and family referral program, and they were also asked to select what type of reward they would value the most for a successful referral. These rewards ranged from credit in a future purchase (driving future revenue per customer further) to a donation made on their behalf by the company. Immediately after a purchase, customers who indicated interest in the referral program received their own personalised referral promo code to redeem their reward whenever one of their referrals was successful. As a result, the brand’s previously nascent referral program was widely adopted. New customer growth increased 27%, while cost per acquisition went down 63.5%.

2. Unify your zero-party data across internal systems to democratise learnings and action

Zero-party data can be collected from customers at so many points in their journey with your company, and often that means that different teams are collecting this data and it sits in a variety of internal platforms. There is huge value realised by companies that      unify all that data together to get a deeper and more continuous understanding of each customer. Customer experience management (CEM) software, which is designed to unify data and make it available across channels, allow brands to easily retrieve individual customer data and deliver effective personalisation.

To use a more extreme example, think about a hotel where guests are able to request different pillow types, shaving razors and other extras via the hotel chain’s app (such as Hilton Honors or Marriot Bonvoy) before and during their stay. This is zero-party data about each guest’s personal preferences, yet it is often siloed to being used during just that stay and only at a single property. We have recently helped one of the world’s largest hotel chains, which operates across Asia Pacific, to democratise this data across all their properties to allow frontline employees to proactively personalise a guest’s next stay at another property and also with their marketing teams to use preference data to hyper-personalise what they focus on when marketing to each guest in the future.

3. Let customers train your recommendation with real-time feedback

When providing new content, offers and products, it is also the perfect opportunity to ask customers for their feedback. This feedback collection should be as close to the engagement as possible, given how millennials and Gen Zs have notoriously short attention spans. The mechanism can be as simple as asking users to “thumbs up” or “thumbs down” content. From there, the data collected can be fed into customer experience management software to train your predictive artificial intelligence (AI)      models, algorithms or human agents to further improve personalised recommendations.

YouTube and Netflix have seen huge success with this data collection method. It allows them to sharpen their recommendations based on each user’s individual preferences. Customers are, in turn, motivated to input more feedback to get even more accurate tailored content, and the cycle continues.

This idea can be directly applied by marketers with the content and offers you share with customers. For example, the marketing team of a major Asia Pacific airline provides customers the ability to thumbs up / thumbs down the marketing offers they send each customer. They also take this idea one step further than Netflix and allow customers to say “why” they like or don’t like an offer. Artificial intelligence, including native language processing (NLP) with text analytics, then analyses each customer’s rating and comment to determine how to deliver a better piece of content or offer to that customer in the future. This capability has had a direct impact on improving conversion rates. 

The key lies in understanding each and every customer, and making that data continuously actionable

With cookies becoming obsolete by 2023, it is more imperative than ever for brands to tap into zero-party data to capture the hearts of millennials and Gen Z customers.

When customers volunteer their personal data, personalising the engagements will not only improve their experience, but secure long-term loyalty. Ultimately, if brands understand their customers on an individual basis, there will not be any major roadblocks with the removal of cookies.

The writer is  David Lambert, senior principal, Asia Pacific & Japan, Medallia