Over the past two years, marketers have been told repeatedly that the removal of cookies from the digital media ecosystem places a greater emphasis on the need for first-party data. Many authors in this space have clamored in one form or another: “Cookies are going away, so now is the time to nail down your first-party data strategy!”
On its face, this sounds like a perfectly logical argument. Marketers will soon no longer be able to rely on those once ubiquitous third-party tracking devices to target and personalize online ads with the level of precision they’ve become accustomed to. Adding to the marketer’s portfolio of consent-driven first-party data seems like an obvious way to fill the gap while complying with government privacy regulations here and abroad.
Most recently, Google’s struggle to develop a viable alternative to the cookie—the company has already been met with a fair amount of skepticism over its recently released Topics API, which replaced the aborted FLOC targeting system—only makes the race for first-party data seem all the more urgent (more on this below).
But while the above statement contains a lot of truth, it is also highly misleading and incomplete in a number of important ways. In the first place, how a marketer compensates for the loss of cookies in digital advertising and how the organization collects and leverages first-party data are two completely independent (though not necessarily mutually exclusive) endeavors.
And while it’s true that ad targeting may improve with greater access to first-party data—and certainly personalized marketing cannot thrive without it—obtaining more of this data isn’t enough to guarantee success in the cookieless world.
Why? Because first-party data can drive many business outcomes that have little or nothing to do with digital advertising. These include strengthening customer relationships, improving customer acquisition and retention and innovating customer experience design, to name just a few. A true “customer 360” data set comprised of accurately assembled and curated event signals, behaviors, preferences, transactions and experiences has a proven ability to yield tangible benefits through improved retention, satisfaction, recency and frequency metrics.
All of these rely very little on media and a great deal on the creation of authentic digital relationships between brands and consumers.
The cookie will not be replaced, so let’s move on
Marketers need to wrap their heads around the idea that the data and targeting they’ve gotten back from third-party cookies, and prospered from for many years, will not be replaced with the same level of granularity. Period. FLOC was an attractive solution because no personal data would have ever left the user’s browser (arguably better from a privacy perspective) while allowing a user’s behaviors to be tracked fluidly, moving the user in and out of relevant cohorts as their behavior would indicate (better for media targeting).
However, as we’ve seen in recent weeks, that level of Google decisioning from FLOC was widely deemed still too invasive, and so we’re at a point now where our media targeting capabilities are being whittled down even further. The Topics API framework is extremely limited, with only 350 possible topics supported.
“The kind of aggregate browsing labels that Topics will deliver will mostly not be relevant to brand advertisers’ goals, especially when it comes to reach and frequency,” cautioned a recent article in Digiday. This latest approach from Google is essentially a reboot of contextual targeting. Any brand that has moved on from contextual targeting since the early 2000s is likely going to miss the targeting from third-party cookies.
While it is tempting to argue that the robust media targeting marketers have enjoyed using third-party cookies will be effectively replaced by first-party data, that statement simply isn’t true. Think of how many ways we can leverage first-party data in media targeting today. Not that many!
We can use an onboarding partner to reach those users in our CRM database. Or we can upload our first-party customer lists directly into platforms that have tactics to support it, such as look-alike modeling via Google Ads, similar audiences targeting or Facebook custom or lookalike audiences.
Beyond that, though, there is no direct one-to-one swap of first-party data that will replace every avenue used in today’s third-party cookie targeting. Platforms won’t be building net-new, previously unheard-of (read: impossible) targeting mechanisms that can effectively replace every type of third-party cookie targeting we use today. Not only can it not be viably done beyond what exists today, it also isn’t allowable in a privacy-first world.
Bottom line: When cookies go away, the hard work will be on the shoulders of marketers to analyze and extract everything they can learn from their existing first-party data, and then use that data—not for targeting on its own—but to inform the messaging and audience targeting they use in the cookieless world.
The holy grail of omnichannel marketing
First-party data is not the silver bullet for cookieless advertising that some have made it out to be. In fact, it is so much more. First-party data is the holy grail of true omnichannel marketing, something every advertiser has claimed to be working on for over a decade but which few have actually accomplished in a meaningful way. Knowing who your customers are individually, and what their behaviors are both on and offline—while keeping the customer at the center of every single marketing decision—is what omnichannel is all about. Using that one customer-centric view by every arm of the organization is the goal, that is, the single source of truth.
We must all stop conflating cookies or the loss of cookies with first-party data. When marketers try to force the connection between these vitally important topics, they risk losing sight of the larger goal here, which is an unsiloed organization that has fundamental agreement on how they make decisions, decisions based on their customer(s), all using the exact same data set.
This period of transition provides advertisers an opportunity to get closer to their customers by more fully addressing their wants and needs. Though many brands may find the loss of third-party cookie-based ad targeting a challenge, DAC believes this is a time for savvy marketers to truly connect with their desired customer base by providing much more meaningful experiences—experiences that more fully address the user’s needs and desires than any cookie-based retargeting ad ever could.”