In this episode of CX Decoded, do you really want to live in a cookie-less world? Digitally, anyway, that’s the reality for marketers.
The impending demise of the third-party cookie will take one big bite out of a marketer’s tried and true go-to strategy. Marketers have used third-party cookies for decades to inform digital advertising and user experience by tracking information about visitors and their behavior when not on their actual websites.
But it’s a new world when it comes to data privacy. And the tech giants are taking action. Apple and Google are making moves to support the termination of this type of data tracking on the web.
How can marketers adjust? Is the demise of third-party cookies actually a good thing for marketing strategy?
Co-hosts Rich Hein and Dom Nicastro of CMSWire and special guests Ratul Shah, head of product marketing at SAP, and Tim Hayden, the CEO of BrainTrust, discuss on this CX Decoded Podcast marketing in a cookie-less world.
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Note: This transcript has been edited for space and clarity.
Rich Hein: Hello, and welcome to CX Decoded by CMSWire where we explore the technologies, people and practices defining the next generation of digital customer experiences. I'm Rich Hein, editor in chief of CMSWire, brought to you by Simpler Media Group. As usual, I have with me my co-host and senior reporter for CMSWire and Reworked.co Dom Nicastro.
Many businesses that run advertisements on websites use third-party cookies to track the effectiveness of campaigns, or monitor the pages visited by a user. And these cookies gather information about users to display relevant targeted ads. Google has essentially announced the death of cookies with them blocking them in 2022 and browsers like Firefox and Safari have begun using cookie blockers, as far back as 2013. These restrict those third-party cookies and users often have the ability to block third-party cookies in their browsers’ user settings as well.
While these changes are good for the consumer and data privacy, they will mean a change of plan for most marketers. Organizations are really going to need to rethink how they approach cookies as they relate to data collection, audience targeting, measurement and attribution.
So, to make sure we're covering all our bases here we brought in two experts on the topic. We have with us Ratul Shah, head of product marketing at SAP, and Tim Hayden, the CEO of BrainTrust.
Can you share in some more detail some of the ways that cookies are being used now, and how these cookies being phased out will impact the average marketer?
Tim Hayden: Well, Rich, I'll take a quick stab at that. I think what a lot of people miss is that these cookies are in place actually to improve the experience of the user of the customer, making it easier for you to find the things that you need and you want. It's really about websites performing better, and being able to connect the dots, as the general Internet has become more fragmented. Not really necessarily creepily, although it is creepy in some situations tracking a customer from place to place, but being able to have the right content and what everybody wants -- that right purchase experience right in front of them at the right time. Cookies have been an integral part of that for some time.
Ratul Shah: Absolutely. I think the key piece to remember is the difference between that first- and third-party cookie. And that first-party cookie, the one that's on the domain or the application allows you to come in, let's say in an anonymous way, to interact. So when your wife puts something in your shopping cart or you put something in your shopping cart you close out the session and you come back, it’s right there. That's a benefit. It also allows you to keep that running history for those personalized interactions and experiences.
Where it does begin to get creepy is as those cookies follow you. So, when my daughter searches on her device, and because our IP addresses are linked, some of those ads start coming up and of course I did have to end up buying those things for her because that's what a good dad does.
But when they do follow you around the Internet because you made a purchase, and that system isn't linked that's wasted ad spend that impacts you. It's one of those things we all chuckle about but for most marketers it's frustrating because those are dollars lost. The reality is we're all going to have to adapt.
Dom Nicastro: It's crazy to me how we got to this point because you mentioned earlier it is such a good advertising strategy. Go where your customers are. They're here, now they're there, they probably want something that they previously looked at. Probably. That's an assumption but they probably do.
So my question is, how did we get to this point. Like, who screwed up here? Why are they taking cookies away? What did marketers start doing so badly that it's something that's going away and the privacy advocates are like, nope, we're not doing this anymore. We're making laws about it.
Tim Hayden: Well, I think it's nothing that marketers did. I mean, there's no doubt about it, the internet is noisier than it's ever been. Part of that's because of politics, part of that is because of the pandemic. Lots of folks are sitting at home, staring at computer screens, tablet screens and making it a noisier replace.
But really at the end of the day, to me, this is about what big tech companies and a lot of large retailers have done to build four walls around themselves: what you would consider direct-to-customer or direct-to-consumer.
I think you're seeing Google and you're seeing Apple and some others that are the ones pulling the strings on this cookie-less future. They're actually trying to do the same thing: how do we spend more time with them, which is exactly what Amazon's done. How much of our shopping goes to them, how much do we take away from the four or five retailers that we would have gone to in an average week and go straight to Amazon? I think a lot of folks are trying to emulate them. And obviously, with Google doing what they're doing, it's not just what they sell, but it is what everybody buys from them and that's advertising. They're trying to build more value in what they do.
Rich Hein: If I'm a marketer in today's world and I thrive on third-party data for targeting my audience, is this a time that I should be starting to get worried?
Dom Nicastro: Yes.
Ratul Shah: Worried is the wrong approach. I think it's an evolution. And so when you said how did we get here and where should we go, you need to be cognizant of your environment.
As a great marketer, you were always doing your competitive intel and understanding your marketplace and what is happening here as the regulations are changing but even more importantly as customer experience and the customer expectations have changed.
I don't want to be treated in the way that I used to. The whole batch-and-blast widespread audience that may have worked when the Internet was in its infancy, but now there's an app for everything. There's a webpage for everything. I don't have the time to kind of get bombarded in this way.
And the opportunity, instead, is for these four to five or 10 to 20 brands that we want to deal with, to really build a different relationship with us. And they don't do it with a third-party cookie and kind of a massive treasure trove of data without us knowing. They really do it by using first-party data, and more importantly consent-based, first-party data. Know your audience to truly engage your audience and provide them the experiences, not just personalized emails that say, “Dear Ratul,” but actually know who I am, to be able to provide the adjacent experiences that I really want. They know who I am when I call a call center. They don't make me repeat what I said 20 times. They know what I've purchased, they have a look into my life so that they're able to provide the service that their businesses were originally designed to do.
Tim Hayden: No doubt about it, Ratul. I've always seen it as something that you could actually explain with HDTV and how it came to be. I’m probably dating myself, but I grew up in a house that had 13 channels and then it had 36 channels once we had cable TV.
And over time, there were more and more channels that we had, but it wasn't until the federal government actually required broadcasters to improve the signal, to refine the signal with HDTV with higher resolution.
That's exactly what's happening on the Internet today. It's about brands cleaning up their act, providing that high-def experience if we want to call it that. But what does that mean? It means it's personalized, it's contextually relevant. It gives customers what they want, sooner faster and more relevantly.
Ratul Shah: It's that signal-to-noise ratio. How do you get there exactly? It's about knowing who your customer is across all devices and channels and making it easy for them to engage with you, And then making sure that you clearly understand how they want to be treated. Putting them in that driver's seat really does dictate what that experience looks like.
And I don't believe it's just solely from the marketers’ perspective. CMOs are challenged to do that unknown to known what their ad targeting, but the rest of the business needs to truly know your customer and use that information in a way that benefits them.