Google expects to scrap third-party cookies from its Chrome browser by the end of 2022. Firefox and Safari have already stopped supporting these cookies, giving them a two- and three-year lead on Google’s cookie obsolescence plan.
No cookies to power ads and reach target audiences. Should marketers and advertisers worry?
First, it’s important to remember how we all got here. Rewind to August 2019, when Google first announced its “Privacy Sandbox” initiative. They did this to comply with enhanced web privacy standards and to respect web user privacy expectations.
As a data supplier and full-service data and analytics consultancy company, we at Environics Analytics (EA) understand the importance of user privacy and compliance in our work collecting data and delivering analytical insights. We’ve been following the third-party cookie phase-out, learning how it affects our partners and clients in marketing and advertising, and thinking of alternative solutions that can help in a world without cookies.
We’ve concluded that first-party data and geo-contextual data are expected to play a crucial role in cookie-less advertising and media targeting. Whether you have yet to consider them or you’ve abandoned them in favour of third-party cookies, it’s time to take another look at these two ways to keep your marketing machine running and to ensure that you get in front of the right customers.
In the age of machine learning, AI, algorithms and now-to-be-defunct third-party cookies, it’s easy to forget that the most fundamental data are right at your fingertips.
We’re talking about first-party data—you may know it as “1P”. These are proprietary data that you collect from your customers and consequently own. These data are valuable to your marketing efforts.
First-party data come from systems and software used to capture and store information about customers interacting with your company or brand. These derive from a direct and consensual relationship with the customer.
First-party data can be as simple as the email address, phone number and mailing address from a “Contact Us” form. If you collect these from customers opting in to your future marketing, you’re golden. The rest is a matter of data hygiene to ensure that the data are organized, de-duplicated and formatted to be easily read.
Marketers and advertisers—both in-house and at agencies—often ask about what types of data are collected, how they are captured and where they are stored. The information a company keeps about its customers can reveal opportunities for marketing tactics to upsell or cross-sell more products and services.
First-party data help you understand and keep your existing customers.
When it comes to spending money on marketing and advertising, it’s cheaper to keep the customers you have than it is to get new ones. According to HubSpot, "It's 5-25x more expensive to acquire a new customer than it is to retain an existing customer."
As for ROI, the Harvard Business Review reports that 5% increase in customer retention results in 25% to 95% increase in profits.
Of course, finding new customers is important for growth and sales. Enter geo-contextual data as a privacy-compliant, viable alternative to third-party cookies and a way to make the most of your advertising dollars.
Geo-contextual data provide behavioural and contextual data for the audiences you want to reach. These data complement first-party data by taking what you already know about your customers and modelling their attributes based on where they live, using their postal codes rather than IP addresses. That is, they define audiences based on selected behaviours, not on personally identifiable information (PII).
Geo-contextual data are used to target audiences most likely to respond to your advertisement. These data open the doors to understanding your customers better; segmenting them on factors like household spend, media consumption, digital behaviours, shopping habits, social values and more. For marketers and advertisers, these insights reveal lifestyles and interests which are ultimately helpful in creating campaigns and planning media buys.
EA uses the principles of geodemography to gather and prepare geo-contextual data. We combine the data with PRIZM® segmentation to provide demographic, psychographic and behavioural insights about different population segments.
By knowing where your customers live, you can learn about how they live and like to spend their time. This information is critical as third-party cookies disappear. Combining first-party and geo-contextual data offers rich insights and opportunities to reach new customers like those who have already proven that your marketing tactics and advertisements work.
MiQ, a global programmatic media partner, asked us to support a Canadian advertiser’s implementation of their three-pronged cookie-less strategy focusing on:
1. Building a foundation by combining historical purchase first-party data with PRIZM® to understand where and who to target.
2. Measuring the impact of specific keywords and web domains related to the advertiser’s brand within the relevant categories.
3. Leveraging historical conversion and purchase data on Black Friday and Boxing Day, blending them with EA’s data to inform future strategy and test hypotheses on target neighbourhoods.
We supported this strategy by scoring and ranking which devices were most—and least—likely to respond to the advertiser’s offer.
Based on an in-depth discussion on targeting objectives with MiQ, our analysis used device IDs of past and present customers (first-party data) which we translated into the postal codes of home (evening) locations, then applied segmentation through PRIZM profiles (geo-contextual data). Then we ranked the postal codes and targeted devices based on customers’ likelihood of making a purchase in a specific product line.
This solution performed the best out of the five tactics tested. It successfully drove a 2.8x higher return on advertising spend (ROAS) compared to the advertiser’s previous performance measures. In addition, the cookie-less strategy doubled return on ad spend compared to a standard cookie-based campaign.
MiQ and EA’s partnership resulted in collaboratively building powerful, addressable customer segments—all without a single cookie.
Third-party cookies are disappearing. This means that first-party and geo-contextual data can reclaim the spotlight.
These data are what marketers and advertisers had to rely on before cookies came around. This case study makes it clear that first-party data can deliver the goods reliably. Profiling customers with geo-contextual data is the cherry on top.
Facing a cookie-less marketing and advertising world might be scary. But there’s no need to panic. This shift presents opportunities for innovation and ingenuity.
It’s a chance for companies and their agencies to collaborate. To maximize data analytics by looking at the customers already there and modelling their attributes to find the next best prospects.
Want to learn more?
See how EA helps media companies and brands leverage the power of geo-contextual data.
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