Data as a Disruptor: How to Effectively Advertise When Third-Party Cookies Crumble

By Mike Baranowski, Vice President of Analytics and Data Engineering

Data: something digital marketers cling to and that’s universally relied on to make decisions. Whether it’s our own data, that of third parties, or purchased lists, data allows us to be precise. But are our data strategies built to withstand and comply with disruption? What happens when the data itself becomes a disruptor?

A silver lining of 2020 is that access to data has allowed marketers to make quick and informed decisions with each twist and turn. But as we learn more about Apple’s Intelligent Tracking Prevention (ITP) and Google’s announcement that it will phase out third-party cookies (think: Pinterest’s ability to track user behavior when you pin a recipe from another website) over the next two years, one thing is guaranteed: these changes will affect how we track user behavior and coupled with platforms’ continuous evolutions, leave us with a dilemma.

The momentum gained toward an increase in the access to better data, and in turn, our ability to better target our most valuable audiences is coming to an abrupt halt. With the pendulum starting to swing back in the other direction, ready or not, it is time for marketers to take action.

Why will data become a disruptor?

Increased regulation and a ‘land grab’ for first-party data are the two driving forces behind the swing in access to and ability to leverage data. Roughly 23 states have some sort of privacy law in place, with the most recognizable being the California Consumer Privacy Act (CCPA). And, the General Data Protection Regulation (or GDPR) is less of a mystery for those handling consumer data in the European Union. As a result of these regulations, the supply of available data has already decreased, but the demand remains at an all-time high.

A 2020 Digiday Germany study found that as much as 70% of ad spend will go unattributed without cookies, resulting in a decreased return on ad spend. That, in turn, could potentially result in decreased budgets and revenue due to the decreased marketing activity.

Why should marketers care about first and zero party data?

Brands have put most of their eggs in the third-party basket for a long time as it’s become the standard for data collection and usage in the advertising industry. By accessing purchase history and website browsing data, we’re able to curate campaigns that are ultra-targeted, making it possible to not only reach the users that we know are among our target audience, but prospects who have similar online or purchase behaviors.

But soon, this will no longer be a viable option. And that means marketers will have to be intentional about collecting and using zero-party and first-party data.

First-party data is collected directly from assets you own, like email addresses, website activity data, key performance indicators from a campaign, or data from Salesforce. But a lesser-known dataset, called zero-party data, is equally important. According to a recent Forrester report, zero-party data is “data a customer intentionally and proactively shares with a brand and might include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize them.” This differs from first-party data because brands do not own zero-party. Instead, consumers grant a brand the right to use it for a particular intent or value exchange.

Understanding your data & how to use it is crucial for future marketing efforts

Our continued desire to understand individual consumer activity will soon be hampered by regulation and
privacy. Aggregated data, summarized data pulled from multiple sources that cannot be tied back to an individual, will (thankfully) still exist, but will need to be thoughtfully managed. Here are some key elements to consider for the future:

  • Aggregated cross-channel data will still allow for the use of multi-touch attribution (MTA) tools. MTA will continue to help marketers understand the channels and touchpoints throughout a consumer’s journey, and, most importantly, how they interact with one another.
  • A “Walled data garden,” an organization that keeps technology, information, and user data to itself with no intention of sharing it, should be viewed in tandem with owned data. Those that Google and Facebook are creating should be analyzed alongside a brand’s data to see if they can provide any additional insights. That said, walled gardens may favor the platform or media, so it’s important to make sure marketers understand the inputs they are leveraging when using it to make business decisions.
  • “Data clean rooms,” environments with shared aggregated data that are mutually beneficial for all parties involved, will continue to become more common. While still in their infancy, large advertisers or publishers have early access. They can address questions like true audience size and whether marketers are reaching the same people across platforms. For example, if Facebook provides audience data and your brand provides conversion or engagement data, this fills a gap that Facebook has in its dataset, which together, creates a more well-rounded understanding of performance for both parties.
  • Focus on your owned data strategy. Marketers’ ability to diversify their owned data is key because of its unique, brand-specific value. With many marketers still heavily reliant on third-party data, a sound strategy to transition away from it will be the most beneficial thing you can do to continue effectively targeting your audience. It’s never been more important to start thinking about growing your first- and zero-party data than it is now.

How can you get started?

Setting up new first- and zero-party data collection initiatives sounds intimidating. But it doesn’t have to be. Here are some ideas to help get the ball rolling:

  • Encourage e-newsletter or account sign-ups to capture user information.
  • Let your audience lead their own personalization by allowing users to save their size preferences on your site or save the room they just remodeled using your onsite tools.
  • Make it fun with gamification, like having a user complete an online quiz in exchange for their email address.

There’s no question that developing first- and zero-party datasets will take time, planning, and patience. Thankfully, there’s no better time to start implementing new changes – with all historical benchmarks thrown out the window in 2020, now is the perfect time to put new plans in place. Less reliance on third-party data puts you back in the driver’s seat with deeper insights into your audience and access to data you can truly rely on as the pendulum swings.

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