Better marketing with fewer cookies

This article was originally published on computerworld.com

You’ve probably had this experience: You go online to research a purchase—like a riding lawnmower—and click around some manufacturer and retail sites. Within an hour, ads for riding lawnmowers start turning up on every website and mobile app you use. The blitz continues for days.

John Bruno can relate. The vice president of commerce strategy at e-commerce technology firm PROS remembers that when he went shopping for an engagement ring a few years ago, “I had to hide every device I own,” so a wayward ad wouldn’t tip off his wife-to-be.

This little bit of creepiness is brought to you by cookies, those little unassuming files buried so deep in the guts of our computers that most people wouldn’t even know where to find them. Web servers know where to look, though, and the information contained within them is what enables advertisers to follow you around like a stalker.

Many marketers love cookies because they enable personalization at scale without heavy lifting. But third-party cookies are going away thanks to recent actions taken by tech giants like Apple and Google in response to consumer concerns about online privacy. While the deadline for killing cross-site tracking technology has been a bit of a moving target, it now seems all but certain that the value of cookies will crumble by the end of 2023.

The ripple effect on web marketers could be significant, Bruno believes. “The market for third party and contextual data is going to be decimated,” he said. “As access to third-party cookie data goes away, businesses will have to focus on the data they’ve already captured,” or what Forrester Research has dubbed zero-party data.

It’s not that cookies are disappearing entirely. “Third-party cookies are going away,” said Michael Katz, CEO of mParticle, a customer data platform for multi-channel consumer marketing. “Cross-domain activity without consumer consent is going away.”

Companies can still drop cookies onto a visitor’s device, but in the future, they’ll need consent to do so, which is why you’ve been seeing those “this site uses cookies” boxes popping up everywhere recently. While some marketers may rue the end of this personalization crutch, the end of cookies doesn’t create winners or losers, it simply changes the rules of engagement.

“As access to cookie data goes away, you’ll have to focus on data you’ve captured,” Bruno said. Once customers give permission, “you can start tracking clicks, pages, and dwell times,” he said. “You’re back in the game.”

The difference is that you’ll only have the data you collect to work with. That will force a return to the fundamentals of what good companies already do in their marketing, which is to cultivate distinctive and delightful experiences that keep customers coming back. “Those companies that win in the future will be the ones that instill the most confidence,” Bruno said. “It will come down to two things: How well do they make information about their products available, and how easy do they make it to buy?”

Katz agrees. The winners in the post-cookie world will be “brands that can create innovative customer experience,” he said. It’s a flywheel effect, he believes. “The smarter you become about your customers and the more you invest in a first-party data strategy, the better results you’ll see in engagement.”

Rules changes always have collateral impacts. Katz thinks one of those will be that businesses will need to reevaluate engagement strategies. “A lot of consumer-packaged goods companies have outsourced the customer relationship to retailers for years, he said. “That’s now changing. Companies that can own and improve relationships with customers are going to be in a stronger position.” Tesla Motors, for example, has eschewed independent auto dealers for wholly owned stores where it can control the customer’s experience. Expect to see more of that.

Bruno sees pricing strategies changing to deliver individualized and dynamic offers. “For you, and only you, this product will cost X dollars,” he said. A survey of more than 1,000 purchasing professionals that PROS commissioned two years ago found that two-thirds of respondents said they would prefer vendors that provided real-time, personalized pricing, and more than half would pay a premium of as much as 5% for the service. “Customers will realize they don’t need to go through negotiation, because the price they’re getting feels fair,” he said.

At the risk of sounding cliché, the biggest winners in all this will be customers. Web ads will be less invasive, and companies will be more transparent. While we may have to pay for some of the content we got for free in the days when we were the product, I’m personally OK with that—as long as I can go back to researching that riding lawnmower in peace.

To stay in-the-loop with more content like this, you can subscribe to our monthly newsletter, mPulse, right here.