Can Advertising Be Just as Sweet Without Third-Party Cookies?

By Denise Dresser


Like it or not, the cookie-less world is coming.

Under pressure from privacy advocates and regulatory bodies, major browsers such as Google Chrome and Apple Safari are expected to phase out these tiny nuggets of behavior-tracking code by 2023. Media companies are working on more privacy-compliant alternatives. But it's unclear whether any of these options will attract enough industry backing by then to truly help marketers deliver personalized advertising experiences to consumers.

So, what's a nervous marketer to do? There isn't much choice. Rather than gambling on a new industry standard miraculously appearing, they need to double down on zero- and first-party data.

Zero-party data is information that a consumer intentionally and proactively shares with companies. It includes specific details about purchase intentions, personal context, and how individuals want brands to recognize them. This differs slightly from first-party data, information a company has collected on its own about consumers, without explicit consent, such as their website viewing habits and purchase histories.

When combined, zero- and first-party data offer a powerful alternative to third-party cookies for understanding customer preferences and intentions. And this is no longer a nice-to-have but a must-have given new privacy regulations that have been instituted to ease customer suspicions about brands invading their privacy.

A Better Approach Than Cookies

Currently, 79 percent of Americans say they are concerned about how companies use their data, and 41 percent report they regularly delete cookies, according to Pew Research. Yet, at the same time, most acknowledge they would sacrifice some privacy in exchange for more personalized experiences, so long as brands are transparent about how they're using and protecting their data.

There's a huge opportunity here: if media companies can shift their data-gathering mindsets to focus on establishing open partnerships or value exchanges with consumers, they can transition into the cookie-less world with ease. In other words, by creating a dynamic where consumers – by opting into information-sharing – get as much out of sharing their data (e.g., receiving more personalized experiences) as media companies do from receiving it. Everyone benefits the marketer, the customer, the privacy advocate, the regulator. Everyone.

Gathering enough data from customers to make all this work, however, isn't as simple as asking people to click opt-in buttons on their screens. Indeed, studies show most consumers naturally resist such activities. The key: Offering rewards, such as discounts or premium services, in exchange for sharing personal data can make all the difference.

Putting Zero-Party Data to Work

With this kind of technological foundation in place, it behooves brands to figure out how to convince customers to take part in sharing zero-party data. Some are doing this in simple ways, such as offering free Wi-Fi in exchange for email addresses inside coffee shops, grocery stores, and airports.

Others offer quizzes where users answer a few questions for free but must share basic information about themselves to go further. Some clothing brands, including Stitch Fix, even conduct online surveys about style preferences and then use that information to provide shoppers with items they'll like best and, therefore, more likely buy.

Then there's the data-collection model championed by Netflix. By subscribing to the service, customers agree to Netflix to track their content viewing habits. On the back end, Netflix's advanced artificial intelligence (AI) algorithms analyze user viewing habits and tee up screens with personalized content recommendations resulting in higher engagement and keeps subscribers sticking around longer — even as Deloitte predicts streaming services worldwide will see more than 150 million cancellations in 2022. In fact, Netflix's recommendation engine reportedly saves it around $1 billion per year and provides insights that advise most strategic business, marketing, and programming decisions.

Some brands are also looking beyond cookies and are collecting data from their own networks to aid industry partners. NBCUniversal, for example, recently announced a first-party identity platform, called NBCUnified, which creates a central database for customer touchpoint information from all of its entertainment properties, including movies, news, sports, e-commerce, subscriptions, and theme parks (which together engage more than 230 million adults per month). Marketers could combine this information with their own zero- and first-party data to customize entertainment-related digital ads.

A Blessing in Disguise

Marketers know delivering ads and products based on zero- and first-party data is the best approach because it's built almost entirely on input received directly from customers. Cookies sidetracked many from this truism by making data collection quick and easy. So, in many ways eliminating those tiny bits of tracking code can be considered a blessing in disguise. It allows marketers to get back to basics by gathering the kind of data they need to give people what they really want.

By building a value exchange with customers built on zero-party data, advertisers can quickly move beyond third-party cookies to dramatically improve how they deliver meaningful experiences.

The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

Denise Dresser is the EVP and CRO of sales, communications, media and high tech at Salesforce.