Editor’s note: The following is a guest article from Thomas Wyatt, president of Twilio Segment.
Google announced its decision to postpone the deprecation of third-party cookies last month, as advertisers and privacy advocates voice concerns over its potential solutions. This is the third time Google has delayed cookie removal, marking yet another twist in Google's ever-evolving approach to data privacy and user tracking.
Third-party cookies have long been a cornerstone of customer segmentation and personalization, allowing customer experience leaders, as well as marketers and advertisers, to track users across the web, enabling targeted advertising and measurement. We’ve all seen them in action: We search for a pair of sneakers, and suddenly sneaker ads are following us from site to site.
In 2020, in response to growing concerns over privacy and data security, Google announced it would reevaluate its reliance on such mechanisms, promising to phase out third-party cookies “within two years.”
With each delay, Google has cited the need for additional time to develop and implement alternative solutions that balance privacy concerns with the needs of advertisers and publishers. Its attempts thus far — such as their Privacy Sandbox — have fallen afoul of the U.K.'s Competition and Markets Authority and are unlikely to provide a viable alternative in the short term.
While CX leaders who rely heavily on third-party data for targeting and measurement may welcome Google’s announcement as a temporary reprieve, these delays also undermine broader business confidence in other forms of privacy-first advertising methods.
Despite early enthusiasm, 3 in 4 marketers say they currently have either complete or substantial dependence on third-party cookies, and they would be seriously harmed by losing access, according to Statista.
With the latest announcement, businesses are left with two options:
- Delay their decision until Google announces a firm timeline.
- Become an early adopter of newer solutions for cookie removal — such as Enhanced Conversions, GA4, Conversions API or Conversion Lift — to ease the transition and avoid a drastic migration down the line.
We’re seeing the latter, as more companies rely on data warehouses and customer data platforms, or CDPs, to explore longer-term, sustainable models of advertising that respect users’ privacy.
Start with a unified view of your customer
Creating good customer experiences comes down to knowing your customer. Building a unified customer profile gives businesses critical context about each customer in real time and delivers downstream benefits.
Seven in 10 companies are using AI to build a unified view of every customer by combining data from multiple sources, standardizing data formats, filling in missing values, reconciling inconsistent data and deduplicating information, according to a Twilio report released last month.
A single view of data summarizes all of the customer’s interactions with the company and helps outline the customer’s intent and interests. It can predict future user behaviors, like high propensity to purchase or churn, and allows companies to adapt to changing customer needs.
This is critical in the current AI era, where CX leaders can only fully take advantage of the opportunity the technology presents with clean, accurate data.
First-party data collection
Attaining accurate data means collecting data that truly reflects the customer's behavior, preferences, and needs — which is where first-party data enters.
First-party data is the data that businesses collect directly from customers based on their interactions with the brand, including activity on the company's website and app, customer support calls, and purchases or returns.
When customers interact with a brand and decide to provide their information, they presumably do so knowingly. Some companies may be hesitant to implement first-touch authentication strategies, believing that this friction is bad for customer experience. But by and large, today’s digital consumers recognize that providing their identity to brands rewards them with better personalization and a privacy-forward experience.
Retargeting customers with user lists and audience suppression
Many CX professionals are leveraging CDPs and first-party data to power customer retention strategies.
Equipped with unified customer profiles, CX professionals can build segments to produce specific audience lists. These lists can be integrated into prominent ad platforms like Facebook or Snapchat to ensure ads and offers are reaching the most relevant customers.
Publishers are also benefiting from this approach, developing their own interest- or intent-based audience segments to bolster ad revenue. Much like industry giants Google and Amazon, smaller publishers can harness their own first-party data to power advertising strategies through audience segmentation.
Acquiring new customers through lookalike audiences
Retargeting known customers isn’t the only way to harness the power of first-party data. Many large digital advertising platforms offer what are called “lookalike” or “act-alike” audiences, or other users identified as similar to existing customers.
In essence, lookalike audiences are formed by sharing first-party data in a privacy-centric way. By providing an ad platform with an encrypted list of your customers based on first-party data — such as activity across your website or app, content engagement and more — it can create a lookalike segment to reach new customers that are similar to your existing ones. From there, brands can engage those new customers with tailored offers, ads or interactions.
With high-quality first-party data, companies can also accurately identify their highest-value customers. The “walled gardens” of Google and Facebook also have a vast amount of high-quality, first-party data that can help you extend your reach. You never share what you know about your customers with them, but they can use their advanced models to target and identify like users to convert on your site.
Measuring performance in a privacy-first way
Speaking of conversions, it’s about time we say goodbye to the client-side tracking pixel, which retrieves data from the web application, browser or device a customer used.
In recent years, a growing set of companies have completely eliminated pixels from their site for performance and privacy reasons. However, this poses a new challenge for CX leaders: Without the pixel, how can they measure ad performance?
Luckily, a growing number of publishers have built server-side conversion tracking options. By shifting to server-side implementations, companies achieve the most accurate mid-to-low-funnel conversion activity tracking, as pixels fail when browsers crash or an ad blocker is present. Sending data from a company’s back-end is the most reliable and trusted source of all conversions.
Moreover, server-to-server transfers give businesses more control over the data they share; companies select which events to pass to advertising platforms, rather than third-party pixels tracking every movement. This helps build better trust with consumers, as users must choose to identify themselves before any conversion data can be sent.
These are just a handful of examples brands are using to prepare for an inevitable future where data privacy and customer trust are paramount.
Google will usher in a world without cookies on its own timeline, but this delay doesn’t have to mean we continue kicking the can down the road on privacy-first user experiences. Instead, we can take simple steps to start the transition ourselves and get ahead of it.
