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What do third-party cookies, Tim Berners-Lee, and Sun Tzu have to do with the world of customer engagement? The answer: They highlight the current chaos and potential opportunities facing today’s global enterprises. Here’s why.
For years, third-party cookies represented an opportunity for marketers and advertisers. Now, Google plans to remove this cookie functionality, causing a chaotic shift in many brands’ media strategies.
Meanwhile, the inventor of the world wide web, Tim Berners-Lee, is focused on data privacy. He’s championing the concept of data sovereignty and the foundation of trust as an opportunity to solve the chaotic experience the internet has become.
And the famous Chinese philosopher Sun Tzu is attributed with saying: “In the midst of chaos, there is also opportunity.” It’s a quote that enterprises – and especially their IT departments –should take to heart given these trends.
Cookies are all pieces of code that are saved by websites onto a user’s browser, creating insight and, in some cases, questions of the right to privacy. There are several types of cookies, but the two generating the most buzz right now are first-party and third party cookies.
The cookies on the table: First, second, and third-party data defined
The definition of first-party data or a first-party cookie: When you visit a web page, the company that owns the site can ask your permission to install a cookie. When you consent, the site places a small file in your browser cache—this is a first-party cookie. The code in the file interacts with the site and helps personalize your experience over time.
The definition of third party cookies or third-party data is files that are installed in your browser’s cache by advertisers and partners of the company that owns the site. They use these files to enable tracking of the user’s digital behavior and to serve ads. This kind of data is more indirect.
The definition of second-party data is a little trickier: The definition is data acquired from another company that collected the data. The specifics of how it is gathered may vary.
Don’t choke: The end is near for 3rd party cookies
In an event dubbed “the cookiepocalypse,” Google had set January 2022 as its deadline for removing third-party cookie functionality from its Chrome browser. However, they have made a subsequent announcement that it won’t be until at least 2024.
Why will this be a big deal when it finally happens?
First, Chrome dominates the global desktop browser market share. So even though Apple’s Safari and Mozilla’s Firefox already removed third-party cookies, they still work on the world’s most popular browser.
Secondly, third-party cookies have helped build digital advertising into a financial juggernaut that accounted for total spending over $300 billion in 2020. As the global pandemic proved, businesses need an effective digital strategy to stay relevant and resilient. Now, one of the strategy’s core tactics is going away.
Lastly, even Google admits the use of third-party cookies contributes to an erosion of customer trust. Third party cookies going away is an inevitability.
In a recent blog post about the privacy-first web, the company said: “If digital advertising doesn’t evolve to address the growing concerns people have about their privacy and how their personal identity is being used, we risk the future of the free and open web. That’s why last year Chrome announced its intent to remove support for third-party cookies…”
The pendulum swings toward personal data control
While Google claims it prioritizes data privacy, entrepreneurs like Tim Berners-Lee believe a lot more can be done. He envisions a privacy-first web system where companies or governments can’t harvest personal data at all.
Instead, individuals place their information in secure personal online data stores (PODs). If an organization wants to access a POD, it needs to request permission from the individual. Berners-Lee founded a company called Inrupt to develop these PODs and reinvent the internet experience based on this data sovereignty vision.
What’s the link between Google and the founder of the internet? Even though they’re on entirely different tracks, they both recognize one megatrend: customer demand for personal data control is gaining steam.
What should enterprises do about personal data now to address this demand?
Whose job is it anyway? Marketing, meet your new friends, the IT department and CDP
Typically, the marketing department is the primary stakeholder when issues arise with digital ad spend. There’s no question Google’s third-party cookie demise will cause marketing teams to change media strategies.
Yet, it’s important to understand that third parties will still be able to track users – the method will just be different.
As an alternative to third-party cookies, Google will offer a new system called FLoC. This technology enables brands to advertise to cohorts of consumers grouped by demographic and behavior data. The bottom line for marketers: Third-party data will still play a role in understanding customer behaviors and digital ad targeting.
The consumer demand for personal data control has enterprises shifting away from customer acquisition investment based on ad campaigns fueled with third-party data. Instead, they’re prioritizing efforts to extend the lifetime value of existing customers.
This intensified focus on retention opens opportunities for IT departments.
How a customer data platform unlocks the power of personalization
The power of personalization, powered for business: Customer data platform (CDP) solutions help brands build on foundational insights to go beyond marketing and impact the full customer journey.
Three key opportunities IT teams can seize right now
In many organizations, IT is responsible for adopting digital technologies across the business, maintaining current infrastructure, and transforming digital processes.
Once considered an internally focused team, IT is increasingly impacting the world of customer engagement. Data sharing is a big reason for this change.
According to a recent Oxford Economics survey of business and IT executives, 75% said they’re focused on internal customer data sharing strategies. Executives who viewed their organization as customer-centric said data sharing created stronger connections with customers.
Here are three examples of how IT can seize the opportunity to help build these connections:
- Accelerate “know your customer” initiatives Unifying data from across the organization into holistic, accurate, and rich customer profiles helps uncover insights that drive sales and strengthen customer loyalty. Yet this unification is a complex endeavor given the velocity, volume, and variety of customer data collected by enterprises today. Increasingly, IT teams are tasked with bridging these silos and creating more comprehensive views of customers.
- Orchestrate end-to-end customer experiences Retention rates will suffer if any engagement across marketing, commerce, sales, and service fails to meet customer expectations. Yet, thanks to data and process silos, the level of personalization can vary dramatically from one customer engagement to the next. IT teams are in a prime position to transform digital processes for CX so every engagement throughout the customer lifecycle can be personalized, trusted, and connected.
- Govern customer data collection and processing Marketing teams focus on a customer’s consent to terms of service and communications preferences. Yet brands collect and process customer data in many other interactions. For example, warranty information is still a form of data collection. In every instance, data privacy regulations require enterprises to honor the purpose of the data collected. IT teams can perform this crucial governance job to protect the business from regulatory risk and brand reputation damage.
As third-party cookies end, customer data solutions enter into the spotlight
Here are some cloud-based platform solutions that can help IT teams achieve their new missions as third-party cookies come to an end:
Customer Identity and Access Management (CIAM) enables enterprises to collet first-party customer data, create foundational profiles, and orchestrate data across the business near real-time. With the right CIAM solution, an enterprise will know who its customers are, and they can grow this knowledge as customers share more data with the brand over time.
Enterprise Consent and Preference Management (ECPM) allows a business to present clear consent requests to customers; collect, store, track consent, and preferences in a central repository; and offer customers control over their data. Through ECPM, an enterprise will know how its customers want to engage.
A customer data platform (CDP) unifies data from all sources across an organization and creates comprehensive customer profiles. It also honors the purpose of customer data at every stage of the relationship and activates insights in real-time to engagement systems across marketing, commerce, sales, and service.
By integrating a CIAM and ECPM solution with a CDP, IT teams can play a pivotal role in delivering an end-to-end customer experience that turns customers into long-time advocates.