The cookie apocalypse is upon us, and it’s not as delightful as it sounds.
Whispers of data deprecation have become shouts, and, through the chaos, one thing is crystal clear: brands need to be prepared for the ways in which it will transform the digital marketing ecosystem.
Gone are the days of relying on third-party cookies to gain insight into user behavior. Instead, brands will have to invest in alternative data sets to provide a detailed, nuanced look into their customers’ journeys.
Most importantly, to be successful in this new digital landscape, brands will need to rework their current marketing strategies to fully embrace and uplift customer consent.
Without it, they’re sure to be left in the dark.
What is Data Deprecation?
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Data deprecation, which is the process of limiting advertisers’ use of data management platforms for advertising purposes, is most often associated with browser and operating system restrictions — such as changes to third-party cookies or mobile ad IDs.
However, it encompasses a good deal more, from privacy actions taken by individual consumers to "walled garden" or closed data ecosystems such as Google or Amazon.
It also has to do with legal privacy regulations, such as GDPR and ePrivacy, which impact advertisers’ ability to track and store user data in different parts of the world.
To fully understand all the areas that data deprecation will affect, let’s look at them one by one.
Restrictions on Operating Systems & Browsers
As the most well-known aspect of data deprecation, the restrictions we’re seeing put into place concerning third-party cookie use and mobile ad IDs are up first for inspection.
What is a third-party cookie, and how will they be restricted? Well, a third-party cookie is a tracker placed on a website by someone other than the website owner with the goal of collecting data for the third party’s use.
They are used to help third parties, usually ad networks, gather information for later retargeting use in online advertisements. They’re essentially tags that track users cross site, monitoring and recording their actions.
According to a 2020 study by Epsilon, 80% of US marketers report being very to moderately reliant on third-party cookies in digital advertising. However, the coming restrictions to their use will eliminate this method of data collection in favor of consent-based alternatives.
Mobile ad IDs will meet a similar fate, with the Identifier for Advertisers (IDFA) also coming to an end — meaning we’ll no longer have access to the IDFA data that has previously been used for granular attribution in the mobile advertising ecosystem.
Finally, the rise in popularity of privacy-first browsers will have a huge impact on identity-based marketing strategies going forward. With more and more online users choosing to block third party cookies and the collection of sensitive data, privacy is taking center stage.
Individual Consumer Privacy Actions
Based on a January 2021 study, 66% of adults worldwide agree that tech companies have too much control over their personal data.
From installing ad blockers to regularly clearing your web browser history, privacy actions taken by individual consumers to negate tech and other businesses’ control of their data will also have an effect on overall deprecation.
With increased importance placed on customer consent and choice, users are opting out of third-party data storage and tracking at much higher rates than ever before. While the massive amount of data generated by online users is great for advertising purposes, it also requires a high level of responsibility from data managers.
And one that they’ve failed to live up to time and time again.
Personally identifiable information is considered sensitive data — and for good reason. With the thousands of consumer data breaches witnessed over the past few years and 43% of large enterprise businesses reporting cyber incidents as a major leading risk, consumers are increasingly concerned with how their data is being stored, used, and shared.
This has all lead to the changes we’re about to see, with increased importance placed on consent management. Therefore, brands currently relying on third-party tracking data will need to find alternative solutions going forward if they want to survive in the post-cookie world.
Legal Privacy Regulations
In addition to individual users asserting their right to privacy, countries around the world have been passing data protection and privacy laws, such as the General Data Protection Regulation (GDPR) and the California Privacy Rights Act (CPRA).
Laws like these require all companies to abide by their new restrictions, meaning businesses around the world need to make sure their data privacy is up to snuff to avoid large fines or legal repercussions.
For example, GDPR was implemented across the EU and EEA region in 2018 and allows for citizens to have greater control over their personal data, as well are increased assurances of data protection.
An act like GDPR applies to all businesses in the EU, and affected businesses are encouraged to appoint a data protection officer to ensure they’re meeting the rigorous standards set.
Similar regulations have been passed around the world and brands need to make sure they’re abiding by the new data protection laws — even if they do severely limit access to all that fantastic online identity data.
However, Epsilon reports that 69% of US marketers believe that the elimination of third-party cookies and IDFA will have a greater impact than the likes of GDPR or CCPA.
So, what will this loss look like?
What Will the Loss of Third-Party Cookies Look Like?
For the past 25+ years, the entire online ecosystem has been built around the cookie.
How data deprecation and the end of third-party cookies will affect your brand is highly dependent on your industry and current methods of data collection. Surprisingly, as of September 2020, 50% of marketers in the US believed that privacy concerns will persist even with the loss of third-party cookies.
Nevertheless, it will definitely affect most forms of online behavioral advertising, which is the practice of collecting data from a particular device regarding viewing behavior to deliver relevant, preference-based advertising.
Without the ability to track users’ behavior across most platforms, companies will have trouble utilizing this method of advertising to create audiences and target them.
The third-party cookie has been the foundation of the digital buying ecosystem for years, used to create and activate niche target audiences. With its coming disappearance, brands will need to find an alternative method to capture and activate these audiences.
Furthermore, losing the third-party cookie will also have a large impact on many forms of digital measurement. Essentially, all the data you used to receive from third-party cookies or mobile ad IDs will be severely limited, and measuring marketing campaign efficacy going forward will be difficult.
Finally, third-party cookies are what make identity resolution — which is the process of tying a user’s online behavior to a unique identity — possible. Without the use of third-party cookies, marketers will have a hard time connecting behavior across different platforms to create an identifiable online identity.
Third-party cookie data is also used to enhance online user identities with preferences, interests, and purchase-behavior patterns. With their elimination, we will also see the loss of these incredibly detailed user IDs.
As you can see, the loss of third-party cookies will have a massive impact on the way in which we collect, store, and use data in the future.
It’s incredibly important that brands as informed and prepared as possible, otherwise, they risk ending up in a difficult, data-less situation of their own making.
What Can Be Done to Offset this Loss of Data Access?
With digital advertising spend in the US projected to reach upwards of $191 billion in 2021, the loss of third-party cookies and the rise of customer consent will forever change the way brands interact with audiences in this highly lucrative digital environment.
From targeting to retargeting, without the use of third-party cookies, marketers’ ability to leverage identity-based activation will have all but disappeared.
However, this isn’t a death sentence for digital marketing. Instead, it’s forcing us to shift focus to a different, more consumer-based approach.
When asked what measures they’ll undertake to counter the impact of data deprecation, 54% of US marketers claimed they’ll be moving to contextual targeting strategies, while 67% said they’ll be building a customer data platform.
No matter what method your brand chooses, going forward you’ll have to find inventive ways to enhance customer identification profiles with alternative data while simultaneously balancing the increased call for customer privacy enhancements.
By shifting focus to permission-based data sets and increased privacy measures to protect consumer data in-house, marketers are being asked to place the rights of consumers at the forefront of their marketing efforts.
With that being said, there are a few options for acquiring data that may be the solutions marketers need in this post-cookies world.
From alternative data sets to voluntarily-given brand tracking data, let’s discuss the options going forward.
Are Alternative Data Sets the Answer?
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What is an alternative data source? It’s data that’s collected with express permission — such as that from the Internet of Things, sensor data, location data, or transactional data.
Now, that’s not to say that third-party cookies were acting without consumer consent. To track users across the internet for weeks at a time, they did have permission. But it wasn’t what we would now define as informed permission.
These new, alternative data sources act as signals for brand preferences, affinities, and considerations.
The concept of “data signals”, which come directly from first-party, consented data, will be crucial going forward — meaning marketers will have to try to gather insights and make inferences based on this freely given data.
Furthermore, the contextual data that alternative data sets provide — like location and transactional data — might be more helpful than previously believed. Marketers will need to test and learn to identify which alternative data sources will work best for their goals and marketing campaigns, but contextual targeting may be the way forward.
For example, the data collected by the Internet of Things (IoT), which encompasses everything connected to the internet that can “talk” to one another, might emerge as the next big thing. Think Amazon Alexa or your smartwatch. The IoT is made up of devices that gather, analyze and utilize information via audio, visual, and physical sensors.
To collect this data, an IoT device requires your consent. Once that consent is given, there’s a chance that this data can be used to enhance user experience or for marketing purposes.
Other marketers are hailing transactional data as the answer. From debit and credit card payments to hotel reservations, transactional data provides signals that marketers can use to better understand consumer preferences and behaviors.
Whatever alternative data set you decide to test out, keep in mind that you are allowed to retain all previously collected customer data. A good strategy going forward is to combine your previously collected CRM data with your new alternative data sets to enhance your insights.
How Would Brand Tracking Help Bridge the Gap?
When it comes to understanding your customers, it’s been all too easy to rely on the plethora of data third-party cookies and mobile ad IDs provided.
Want to know how website visitors are interacting with your brand? Check Google Analytics. Interested in who is clicking on your mobile ads? Google Ads Manager is the way to go.
But in an era where data collection will require express consent, this kind of tracked data won’t exist in such abundance. Instead, marketers will need to turn to alternative solutions to succeed in this data-deprived world.
That’s where brand monitoring comes in. Without the ability to track potential and current customers’ every online move, we’ll need to find other ways to understand how they feel about brands.
What are their associations, preferences, or usage habits? What values do they ascribe to your brand? How do they feel about your competitors?
All these questions and more can be addressed using brand tracking software. At Latana, we use mobile-optimized brand surveys to reach your target audience, allowing us to provide you with accurate, nuanced insights into your customer base.
With the ability to add custom demographics, gathering data via brand tracking software ensures a lower margin of error, more applicability, and a wider reach.
Most importantly, all data collected via our surveys is done with consumer consent. This means that the data collected is yours to use for whatever marketing purposes you deem necessary.
So, when considering what kind of alternative data sets you’ll be testing out in the months to come, take a deeper look at advanced brand tracking software if you want precise, accurate data at your disposal.
Final Thoughts
To many people, it may feel as though this enormous change has come out of left field.
However, the deprecation of data through the loss of third-party cookies, the enactment of privacy regulations, and the growth of closed ecosystems have been sending us warning signals for years.
For one reason or another, many marketers have been hedging their bets and hoping that this day wouldn’t actually arrive. And now that it’s finally upon us, many feel unprepared.
Though there will be a great deal of change ahead and many new rules and processes to familiarize ourselves with, bear in mind the tips we’ve shared on prioritizing consumer consent and investing in alternative data sets.
While these solutions may not provide you the same level of granularity and detail you’re accustomed to in your customer data, they’re still your best bet going forward.
There are some positive takeaways from this situation — especially for consumers. As time goes on, we’ll start to see how data deprecation will force marketers to consider how they want to use consumer data instead of collecting it blindly.
Additionally, with increased importance placed on choice and consent, marketers will be made to reevaluate the utility of their already collected data and ensure they’re contacting customers via approved channels only.
For many people, this will be a welcome change.
Modern-day consumers are more informed than ever before. They want to know who has access to their data and how it’s being used. And, if their trust is broken, they won’t hesitate to call brands out publicly and switch to a competitor.
Furthermore, customers want to know that the brands they use share their values and place a high level of importance on their rights.
So don’t delay your preparation any longer. Identify the alternative data sources that you think will work best for your company and start testing them out. The more variety and choices you have, the more prepared you will be.
