What does Death of the Cookie mean for eCommerce?

Written by Nikki Kettell

Right now, eCommerce teams are caught between increased click costs on one side, and tighter margins on the other. But there is a way up and out – a ray of sunlight to chase as economic storm clouds gather.

With Covid inventory gluts, the pound’s devaluation hurting buyers, and the rising cost of living, businesses need to be focusing on driving efficiency, to prepare themselves for surviving and thriving through peak season.

As if this wasn’t enough, 3rd party data is disappearing, and with it a clear picture of which digital campaigns are working and which are wasting money. But in this case, as one door closes another one is definitely opening… it just takes a little effort to walk through and do a stock take of your first-party data sources.

Apple has just launched the shiny new iOS 16 operating system, but when it comes to privacy and security, not much has changed since the seismic shift that came with the iOS 14 update. In case you missed it, with the roll out of iOS 14 Apple introduced some new privacy and security features which impacted ads performance & reporting, especially on Facebook. The biggest change is that any devices running iOS now ask people if they want to be tracked by an app – if they say no then the app is not able to track them to the same extent that it used to. Between GDPR and Google’s Privacy Sandbox, iOS 14 was just the latest (and biggest) step into a privacy-first marketing landscape. 

Estimates range between 5-13% of users allow tracking since iOS 14 rolled out. So it’s no longer viable to depend on 3rd party audiences for ad conversion data. You’re either looking at a skewed sample of opt-in-ers, or making decisions from a small sample that’s statistically unreliable.

“we need to be looking elsewhere for data to get a sense of the impact of an ad”

Since the update was introduced, the challenges for marketers has been two-fold:

  1.  Audiences are changing, as fewer people are opting in to be tracked; and
  2. It is harder to prove how effective ads are as platforms lose sight of more post click activity.

Marketers have found it harder to accurately attribute results to an ad, (when it is difficult to see how effective an ad has been), and there has also been a change in how effective these ads can be, as audiences have been affected by the privacy changes. Many audiences have disappeared, and most are changed in some way, and this is especially true for remarketing audiences. Audiences for remarketing are usually the most valuable as these are warmer prospects, however if you opt out of being followed, you can’t be in a remarketing audience. This means these extra valuable audiences are now smaller than before.

And this is not likely to improve any time soon – there are more and different data privacy measures slated for the near future from all sides. So, what this means for marketers and advertisers is that we need to be looking elsewhere for data, to get a sense of the impact of an ad.

Remind me, what exactly are ‘Cookies’?

All desktop browsing is tracked by cookies, tiny text files saved on your computer that log certain internet activity such as your online shopping cart contents or what keyword you Googled this morning at 9.15. This is how most of the big marketing platforms learn about browsing behaviours. This info from the cookies is therefore a major influence on marketing approach and spend.

There are two types of cookies to be aware of:

1st Party Cookies

  • These are placed by the site you are visiting and are usually useful – e.g. are you logged in? What are your preferences? What’s in your cart?
  • These are still allowed, and are usually there to improve user experience.
  • They can be deleted, but this would usually make a site less easy to use.

3rd Party Cookies

  • These are those placed by other tools (GA, FB, etc.), in order to understand your behaviour and build a profile.
  • These are becoming less accepted and are what Google are planning to replace.
  • It is increasingly popular for users to block these or at least delete them regularly.

So, what is the ‘Death of the Cookie’?

Back in 2020, Google announced that they would be phasing out third-party cookies, something that Firefox and Safari have already implemented. This death of the cookie means that there will be another big gap in the data that marketers and advertisers can access.

Currently, online ads (apart from search) tend to work in three ways:

  1. Contextual – You are on a site about cars so see ads related to cars.
  2. Interest based ads – Based on what is inferred by your browsing history. Seeing ads for sofas as you have browsed living room furniture or watched video reviews of ‘best sofas.’
  3. Remarketing – When a bar stool you looked at follows you around until you buy it!

The biggest impact of losing 3rd party cookies will be on the last two, as this data is largely gathered by these sorts of cookies. Google is working on a solution that will likely come in before they fully kill the cookie, but it won’t be a direct replacement. All this means that people will need to change how they think about targeting their ads, and the data they are relying upon.

What can retailers do?

This is a reminder that many businesses have been lazy when it comes to their own internal data – time for some analysis! The death of the cookie has forced us all to think about how much we have been relying on third party data for marketing, and look for alternatives. Smart marketers will know that there is money to be made – this is a good opportunity to make your data work harder for you, and make the most of your spend. There’s also opportunity to get ahead of slower-moving competitors.

“Smart marketers will know that there is money to be made”

First party data is becoming ever-more valuable, as it will not be affected by any of these changes – that is, the info you get from customers that you own and collect, either direct from them or within apps. The more you leverage this first party data, the less important the third party data will become. 

Server side tracking is also something that will help bridge some of that gap, as it is more privacy-centric, and so won’t be affected when cookies die. Now is a good time to check that this is all set up correctly and you have access to as much data as possible (particularly if you sell seasonal products, you want as much of last year’s data as possible to inform next year).

At the moment data is given up quite freely (which is great for advertisers right now!), but that is only going to drop for the foreseeable, and there will therefore be a lot less data floating around to use in targeting. The sooner you start using your first party data the better, as you will be better able to bridge the gap when third party cookies finally die.

So, where do you start?

Stocktake your data

Savvy retailers should start by identifying the first party data they have gathered – things like customer profiles, customer reviews, etc. Most businesses find they actually have a lot of data when it comes down to it, but most of it is not used, or it is only used for its core purpose. Now is the time to consider any cross-opportunities there might be with the information you already have. By reviewing what your customers really look like, informed by first party data, marketers can find new ways to tailor their approaches. For all your customers who bought a kitchen table with a different delivery address to the billing address and a >2 month lead time, have you tried putting them in a home-movers segment instead of just offering them a discount on dining chairs?

“The more you leverage first party data, the less important third party data becomes”

Consider Reviews

Customer reviews can be a gold mine of information, letting you know about your customers’ preferences, likes, and dislikes, and there are some great tools out there to help make the most of your reviews. Check out the Vuzo ReviewLab tool for proven results on how data analysis of reviews can directly impact the success of your marketing efforts.

Squeeze the most out of 3rd party while you can

Whilst third party data is changing, you can still make the most of what you can access at the moment. Google Analytics, for example, will tell you some of the interests Google has collected on the people that interact with your site, and this can help paint a picture of the interests of potential customers more generally and help with targeting your advertising campaigns.

Think outside the internet

In the digital rush, don’t forget you can use your online and website data as a framework to better target your offline advertising channels. Your online customer behaviour can inform how you think about press, out-of-home, and direct mail.

The power of email

Email lists will be much more powerful once the cookie dies, and many people are not making the most of this. Whilst email marketing is also facing its own challenges after GDPR and the iOS privacy and tracking changes, it is still a great way to reach your customer base. 

If you already have a strong list, the focus should be on how you build and grow this into a more holistic marketing view. Lists should be up to date, and GDPR compliant, and as segmented as possible – by that we mean split into relevant custom profiles and groups. Email lists can then be loaded across different platforms to better inform your targeting, and you can start building information around them.

At Vuzo, we help our clients get the most out of their data and use it to power their marketing decisions. Get in touch now to chat with our team of friendly experts!

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