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How will brands target customers when third-party cookies are phased out?

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Google has pushed back plans to phase out third-party cookies in Chrome from 2023 to 2024. That gives brands and agencies a bit more time to adjust to a momentous change but, sooner or later, a rethink of online marketing strategy will be required. So how can ads and other marketing messages be targeted effectively in a post-cookie environment?

Users of Safari - which blocks third-party cookies by default - and Firefox already exist in that environment. They browse the web and interact with brands and publishers just like everyone else, but their activities can't be tracked across multiple sites. Consequently, they fall outside the reach of current ad targeting and retargeting strategies. That's given marketers a taste of what is to come, but the real change in the advertising landscape will take place when third-party cookies no longer operate within Chrome, a browser that currently accounts for just under 50 per cent of internet traffic. What will that mean? Christian Lette is UK Chief Data Officer at global marketing communications agency, Wunderman Thompson. As he sees it, the change will be profound. "The phasing out of third-party cookies means that the internet is losing its memory as we know it," he says. "We have used 3rd party cookies as a mechanism to remember, recognise and target audiences across the internet for over 25 years. This technique has powered digital marketing, allowing for personalisation, measurement, frequency capping, prediction and to find other web users who have similar attributes and behaviours."

So what happens next? Google is currently working on a project dubbed the Privacy Sandbox. The plan is to offer effective targeting that will not compromise the privacy of web users or trigger action by regulators. At the moment, however, no one can say for certain what that will look like. There is a need, therefore, to look for alternative strategies and technologies.

Back to Basics with Site Optimisation
Alex Bussey is Conversion Rate Optimisation and Digital Strategy Specialist at digital marketing agency Red Evolution. As he sees it, the ability to retarget consumers with ads - a strategy that is reliant on third-party cookies - has resulted in brands becoming complacent about their website conversion rates. If a customer leaves a site without making a purchase, it's not considered a problem because he or she can be chased around the internet with ads until they return. Bussey argues that once cookies are a thing of the past, brands will have to put more emphasis on the performance of their sites. This, he says, involves an analysis of behaviour. "Why did they not buy? What were the roadblocks? What did they do when they were on the site." Tools such as Google optimiser can then be used to effectively run A/B tests on versions of the site to measure what works and what doesn't. Bussey says this typically results in a 1-3 per cent rise in conversion rates, paving the way for further improvements over time.

First Party Data
But that still leaves a question mark hanging over advertising and other forms of messaging. How do you make advertising relevant and timely if you don't have the information provided by third-party cookies? The answer seems to lie in greater use of the information that brands and publishers already collect - namely, first-party data. Maggie Shepheard, is Chief Customer Officer at Planning Inc, a specialist first-party data agency that works with retail brands such as M&S, Argos and Halfords. As she explains, brands tend to have a wealth of data that they can use to hone their marketing messaging.The sources include transactions, information shared voluntarily with the brand (age, gender, email, phone number,etc), behavioural information (what they do on the site); and channel data(what devices are they using).

The Prediction Game
Shepheard says brands need to be smarter with this information. She cites her company's platform, which applies analytics to first-party data points in order to profile the customer. "It's not just about knowing what the customer has been doing before. "We can predict what they will be interested in or doing in the future," she says. In other words, by combining information on previous behaviour, demographics and transactions and then mapping the information onto a predictive model, a brand can make data-led assumptions about what a customer might want today or tomorrow, rather than what they purchased last week or a year or two ago. Offers can be served up on the site or via email. "First-party data can create a hyper-personalised experience," says Shepheard. The potential problem is that collecting personal data such as emails creates roadblocks. Not every customer will be keen to part with such information. Shepherd says a change of brand mindset is required." A new element is entering the picture - that is empathy. Brands will have to ask customers how they want to be treated and what they want," she says. More practically, brands will have to think about what they offer in return for personal data.

Advertising Alternatives
But what about display ads? Will there be any way to target or even retarget in the first-party world?Well,you can share first-party IDs by publishers and brands within some kind of walled garden,market or platform. This is the approach taken by ad serving platform,Adform. The company has facilitated campaigns for clients such as BMW,Vodafone and American Express. For instance, Adform used first-party IDs collected from a number of partner sites to identify consumers who had previously engaged with a BMW G20 3 Series campaign in South Africa. These IDs were then used to serve retargeted ads from Adform's Flow platform. Crucially, these ads were served to consumers using both the Safari and Mozilla browsers, a group that couldn't have been reached using third-party cookies. The result was a 300 per cent increase in conversion rates.

Sometimes IDs aren't even necessary. French adtech company Sqwad has devised a partnership system that allows brands to serve ads for complementary partners at the online checkout. The key is to ensure the products are complementary. "If someone is buying a mattress for a new home, the partner might be a company selling tables," says co-founder Anis Chagar. Most brands are at the beginning of this journey. Christian Lette recommends a reassessment of their advertising and marketing strategy today, feeding through to the formulation of strategies for tomorrow. "As an agency, we're preparing by helping clients to develop future-ready data strategies. Starting with cookie audits to evaluate how reliant the advertiser is on 3rd party cookies, we can then provide roadmaps on how to mitigate," he says. Adform's Oliver Whitten, Chief Operating Officer at Adform stresses the urgency of this migration. Most brands are at first-party data, but the testing of solutions could be moving faster. 

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