May 8, 2024

The death of the cookie has officially begun

Crumbling cookies with "reject all" button

Let's talk about defining your zero- and first-party data strategies to evolve your demand generation programs.

Cookies. Yum, yum. Can you imagine the outrage if we were told cookies were out of the picture—just because some very powerful person said they should be banned?

Yeah, that’s what so many advertisers and marketers are feeling about Google’s announcement that it plans to kill the digital cookie.

The “Death of the Cookie” refers to the phasing out of third-party cookies, which are small pieces of data stored in users’ web browsers and used by advertisers to track browsing behavior and deliver targeted ads. In short: Digital cookies let brands and advertisers know things about you and your online interests without you explicitly telling them. 

Let’s quickly look at how this has developed over the past four years.

It all started as something driven by privacy concerns, regulatory actions, and shifts in browser policies aimed at giving users more control over their data. In early 2022, Google stated that third-party cookies would be phased out by 2024, which would mark a significant shift in the landscape of online advertising. This was not merely an informal update, but a stern warning that businesses must evolve or be truly unprepared for a cookie-less world.

As we stand today, we are in the initial stage of cookies actually being deprecated, impacting 1 percent of browsers. Trust me, I can hear you from here: “Only 1 percent? Get back to me when it’s serious.” Although 1 percent may seem inconsequential, it equates to 30 million browsers. In the end, the plan is for third-party cookies to be completely eradicated.

So, what can marketers do?

For starters, you need to evolve your strategy to invest in zero- and first-party data collection and, in turn, keep that data safe and private with a strong data governance process. Understanding these distinctions can help organizations make informed decisions about their marketing data strategies, including how they collect, analyze, and utilize data for various purposes such as personalization, targeting, and customer insights. Marketers—you’ll need to forge, build, cultivate, and cherish your relationship with senior leadership from your IT/Tech department. Take them to lunch. Tomorrow.

“For starters, you need to evolve your strategy to invest in zero- and first-party data collection and, in turn, keep that data safe and private with a strong data governance process.”

First, let’s get on the same page about what third-party cookies are and about what zero-, first-, second-, and third-party data are.

Third-party cookies are created by websites other than the one you’re currently visiting. They are often used for online advertising and tracking user behavior across multiple websites. If you allow third-party cookies, related sites can access your activity to personalize content or keep you signed in across sites.

Types of Data

Zero-party data

Definition: Zero-party data refers to information that consumers willingly and proactively share with a company or organization.

Source: Collected directly from the consumers themselves, typically through surveys, preference centers, feedback forms, or interactions with the company’s website or products.

Ownership and Control: Fully owned and controlled by the organization collecting it.

Accuracy and Relevance: Generally high accuracy and relevance since it’s provided directly by the consumers based on their preferences and behaviors.

Examples: Surveys, feedback forms, preference centers, explicitly shared preferences or interests

First-party data

Definition: First-party data refers to the information collected directly by a company or organization about its own customers or users.

Source: Collected from interactions and engagements with the company’s own products, services, websites, mobile apps, or offline channels.

Ownership and control: Fully owned and controlled by the organization that collected it.

Accuracy and relevance: Typically high accuracy and relevance as it comes directly from the organization’s interactions with its customers.

Examples: Customer purchase history, website analytics data, CRM data, email subscription lists.

Second-party data

Definition: Second-party data refers to first-party data that is shared directly between two organizations.

Source: Provided by another company or organization, typically through a direct partnership or arrangement.

Ownership and control: Controlled by the organization that originally collected it but shared with another organization under specific agreements.

Accuracy and relevance: Generally considered reliable, but it may vary depending on the trustworthiness of the data-sharing partner.

Examples: Shared customer insights or data exchanged between business partners, co-branded surveys, joint marketing campaigns.

Third-party data

Definition: Third-party data refers to information collected by external sources not directly affiliated with the organization using it.

Source: Acquired from various external sources such as data brokers, publishers, or other companies that collect data independently.

Ownership and control: Not owned or controlled by the organization using it; purchased or licensed from external providers.

Accuracy and relevance: Accuracy and relevance can vary widely depending on the quality and reliability of the data sources.

Examples: Demographic data, psychographic data, purchase intent data, interests, and behaviors inferred from browsing history or social media activity.

So how do these all intersect with the “Death of the Cookie?”

01 | First-party data will become more valuable:

  • Companies will prioritize building direct relationships with their customers through various touchpoints such as websites, mobile apps, email communications, and in-store interactions. These interactions provide opportunities to collect valuable first-party data directly from customers.
  • Organizations will invest in strategies to encourage customers to share their data willingly. This may involve implementing transparent data collection practices, offering incentives such as personalized experiences or discounts, and emphasizing the value proposition of sharing data.
  • With a focus on first-party data, organizations will invest in data enrichment techniques to enhance the depth and quality of customer insights. This may involve integrating data from various sources, applying advanced analytics, and segmenting audiences based on behavior, preferences, and demographics.

02 | There will be a mass shift toward zero-party data and first-party data strategies:

  • Companies will proactively seek zero-party data by directly asking customers for information through surveys, preference centers, feedback forms, and interactive experiences. By empowering customers to share their preferences and interests, organizations can gather valuable insights to personalize marketing efforts.
  • Organizations will prioritize consent-driven interactions with customers, ensuring transparency and providing clear options for data sharing and privacy preferences. This involves implementing robust consent management platforms and adhering to data protection regulations such as GDPR and CCPA.
  • Zero-party data and first-party data will fuel personalized marketing initiatives, allowing organizations to deliver relevant content, product recommendations, and offers tailored to individual preferences and behaviors.

03 | Second-party data partnerships will emerge:

  •  Companies will explore partnerships with trusted organizations to exchange data directly, leveraging each other’s customer insights and datasets. These partnerships enable access to new audience segments and enrich existing data assets while maintaining control over data quality and privacy.
  •  Platforms facilitating second-party data partnerships may emerge, providing secure environments for organizations to share and collaborate on data while ensuring compliance with data protection regulations and privacy standards.
  •  Second-party data partnerships offer mutual benefits for participating organizations, including expanded reach, enhanced audience targeting capabilities, and the ability to deliver more relevant and impactful marketing campaigns.

04 | We’ll explore of new tracking and targeting technologies:

  • Advertisers will increasingly rely on contextual advertising, which targets ads based on the content of web pages rather than individual user data. This approach aligns with privacy principles and allows for relevant ad placements without relying on third-party cookies.
  •  Organizations may develop and leverage first-party identifiers, such as email addresses or user IDs, to track and target users across their digital properties. This approach enables personalized experiences while respecting user privacy and consent preferences.
  •  Innovative solutions like federated learning and differential privacy allow for data analysis and modeling while preserving the privacy of individual users. These techniques aggregate insights from multiple sources without exposing sensitive information, striking a balance between personalization and privacy.

The death of third-party cookies underscores the importance of zero-party data and first-party data as foundational elements of data-driven marketing strategies. Organizations will need to adapt by prioritizing direct customer relationships, exploring data partnerships, and embracing privacy-centric approaches to tracking and targeting in the digital advertising ecosystem.

“The death of third-party cookies underscores the importance of zero-party data and first-party data as foundational elements of data-driven marketing strategies.”

Winners and losers in this world?

The transition away from third-party cookies and the emphasis on first-party and zero-party data strategies will create both winners and losers across various sectors of the industry.

Winners—if you’re not one of these, you need to figure out how to put your company on a path to becoming one!

  • Companies with strong direct customer relationships: Businesses that have invested in cultivating direct relationships with their customers stand to benefit. These companies have built trust and brand loyalty, enabling them to collect valuable first-party and zero-party data directly from customers.
  • Privacy-centric brands: Brands that prioritize user privacy and transparent data practices will gain consumer trust and loyalty. By respecting user preferences and providing control over data sharing, these brands will attract privacy-conscious consumers and differentiate themselves in the market.

Winners—are you working with these types of companies? If not, start building relationships with them today.

  • Data management platforms (DMPs) and customer data platforms (CDPs): DMPs and CDPs that offer robust solutions for collecting, managing, and activating first-party data will see increased demand. These platforms empower organizations to leverage their own data assets effectively for personalization, targeting, and analytics.
  • Contextual advertising platforms: Platforms that specialize in contextual advertising, which targets ads based on the content of web pages rather than individual user data, will experience growth. Contextual advertising aligns with privacy principles and provides advertisers with alternative targeting options in the absence of third-party cookies.
  • Adtech and Martech innovators: Companies that develop innovative technologies and solutions to address the challenges of the post-cookie era will thrive. Innovations in identity resolution, privacy-preserving analytics, and consent management will be in high demand as advertisers seek new ways to deliver personalized experiences while respecting user privacy.

Losers—take a hard look at how you’re handling your data and how stale your advertising go-to market strategy is.

  • Non-compliant data practices: Companies that fail to comply with data protection regulations and privacy standards risk losing consumer trust and facing regulatory penalties. Organizations that engage in unethical data practices or disregard user privacy preferences will face reputational damage and potential legal consequences.
  • Traditional advertising models: Traditional advertising models that rely solely on third-party data for targeting and measurement may become less effective. Advertisers will seek more privacy-friendly and consent-driven approaches that prioritize user experience and data transparency.
  • Companies dependent on ad targeting technologies: Businesses that rely heavily on ad targeting technologies powered by third-party cookies may face challenges in the post-cookie era. Advertisers will need to adapt to alternative targeting methods such as contextual advertising, first-party identifiers, and privacy-preserving solutions.

Losers—are you dependent on any of these types of companies? Time to find new partners that are ahead of the game.

  • Third-party data brokers: With the decline of third-party cookies and the increasing focus on first-party and zero-party data, traditional third-party data brokers may see a decrease in demand for their services. Advertisers will rely less on external data sources and prioritize data collected directly from customers or trusted partners.
  • Legacy adtech players: Legacy adtech players that are slow to adapt to the changing landscape and innovate may struggle to compete. Advertisers will increasingly seek agile and forward-thinking partners that can navigate the complexities of the post-cookie era and deliver effective solutions for audience engagement and campaign performance.

Companies that win will have marketing leaders who take immediate, actionable steps today to be ready for the post-cookie era. So, what should you do?

Prioritize these five actions:

01 | Conduct a comprehensive audit of current data practices to ensure alignment with privacy standards and identify areas for improvement in user data protection. This includes revisiting consent mechanisms and privacy policies to enhance transparency and trust with customers.

02 | Invest in first-party data strategies; this involves creating valuable content and engaging experiences that encourage direct interactions and data sharing.

03 | Explore and integrate innovative technologies such as AI and machine learning to provide new ways to personalize experiences without compromising privacy.

04 | Stay on top of regulatory changes and consumer trends to proactively adjust strategies, ensuring they remain compliant and relevant.

05 | Foster a culture of continuous learning and agility within marketing teams to support the rapid adoption of new practices and technologies.

Companies who succeed here will have to change their mindset about only cherishing their customers to cherishing every person who shares their data, and these companies will have to actually deliver on a prospect-first experience.

The language around customer-centric will need to now include any person who shares data with a brand, not just any person who buys something from a brand.

Reminder, marketers, it’s not your data. It’s their data. Figure out how you can convince them to trust you with it versus buying an anonymized piece of it from a third-party.