The demise of third-party cookies—hastened by browsers and privacy laws—is like the scene in a bad movie where a stricken character melodramatically takes forever to exit this mortal coil.
Eventually the end comes, and a similarly descending arc also appears inevitable for tracking unknown users without their consent through third-party cookies. As that happens, brands face two choices:
- Rely more heavily on first-party data
- Come up with some other scheme for tracking unknown users who are not customers or visitors
LiveRamp, the Interactive Advertising Bureau, and others have solutions for brands to maintain addressability without third-party cookies. In parallel, the near future appears focused around first-party data. If so, how will this affect marketing’s move toward making offers, content, emails, and ads more relevant to users by making them more personal?
Customer acquisition and engagement across the open web
At first glance, said Formation CEO and Co-Founder Christian Selchau-Hansen, this new dynamic can be seen as a greater emphasis on customer engagement, compared to customer acquisition. His company offers a personalization platform.
Customer acquisition often involves targeting ads and other marketing at unknown users who may or may not know about your brand, site, or app, by targeting them at the top of the funnel where third-party data can deliver user segments. In other words, third-party data would be used to determine groups of unknown users who frequent sports sites, because you want to show them ads for tennis rackets.
But the true return-on-investment (ROI) from using third-party data is difficult to calculate, since the users are unknown and the data is acquired from various outside sources. Selchau-Hansen noted that engaging with known users—a brand’s own customers and site visitors—usually has a much better ROI.
Brands that invest in activating their first-party data anywhere their audience may be online and offline can better develop relationships and build loyalty with their customers and visitors.
For instance, by better understanding its own customers and visitors, a retailer can determine which ones are also interested in other recreational products besides tennis rackets, such as fishing rods. This deeper relationship supports upselling and cross-selling, and can help build loyalty among customers. There are many examples of successful referral programs from Dropbox, Evernote, Airbnb, and others.
More granular email marketing
A primary tool for better using first-party data to incentivize referrals is the stalwart of digital marketing campaigns: email.
Customers often receive multiple emails per week from a given brand, Selchau-Hansen pointed out, and the email content is often determined by user segmentation into relatively few groups. All users with a group’s characteristics receive the same email.
But if a brand invests additional resources into more granular marketing personalization, the emails can be more focused toward smaller segments, even down to individual users. That can lead to greater relevance, and therefore continued sales.
Like a local shopkeeper who remembers everything you’ve purchased on previous occasions, this more focused marketing increases the chances that the recipient will find a product or offer of interest, and that the customer will value that kind of attention enough to tell others.
Observing customer behavior offers marketing insights
Another option for better utilizing first-party data is more extensive A/B experimentation, said Global Senior Product Marketing Manager Steve Zisk at customer data platform Redpoint.
Some brands, for instance, might find that testing the ability to share logins à la Netflix leads to more extensive peer-based marketing and generates new customers. A good follow-up test might center on understanding how many shared logins net the greatest number of new subscribers.
This kind of increased emphasis on observing customer and visitor behavior can lead to new kinds of creative brand strategies, said Adam Robinson, CEO and Founder of Austin, Texas-based, Get Emails. He told RampUp that a new focus on first-party data could begin by better recognizing the value exchange for user information.
Marketing personalization as a ‘progressive disclosure’
For instance, he said, many publishers put up a metered paywall. If they saw a greater need for first-party data marketing, they might offer two free articles plus access to a third in exchange for information about the user’s age, and a fourth free viewing in exchange for the user’s location.
In fact, Redpoint’s Zisk said companies must understand that marketing personalization is now a “progressive disclosure” that is essentially its own journey, as users reveal some elements of their history and preferences in stages.
“Brands have to recognize there’s an exchange between [retained] customers and a brand,” he noted, a “trust exchange” in addition to an informational exchange. Customers must have assurance that brands will do the right thing with their data if the customer is willing to share it.
That trust is more likely to be extended to brands from their customers and visitors than from unknown users.
Personalized marketing to unknown users has always been a slippery slope, potentially creating wariness about a brand you had never previously encountered. However, brands you visit or ones that have sold you products can reside in a different realm of trust—if the brand works toward that aim.