Santa’s Last Plate of Cookies
If you did all your holiday shopping on Cyber Monday, you were likely inundated with a barrage of cookie consent forms that popped up as you surfed from store to store.
Imagine a future of cookie-free shopping when third-party data collection dissolves like Santa’s shortbread in a glass of milk. Data regulation in the US has been much more lenient than in Europe but the U.S. might be catching up, with cookies set to phase out in 2023.
More and more companies are hyping their workarounds, realizing they need to start collecting their own consumer data.
But maybe the most promising way is by revamping their loyalty programs: consumers get more enticing rewards & brands get valuable insights on how to retain them as customers.
Here’s your decode:
Cookies: Small bits of data collected as an individual surfs the web, containing useful information aimed at improving their browsing experience.
First-party cookies: Cookies that come directly from a website.
Third-party cookies: Cookies that don’t come from the direct website that a user visits.
Federated Learning of Cohorts (FLoC): A proposed browser model that provides companies with data from a group of users without sharing specific user information.
General Data Protection Regulation (GDPR): The landmark data protection law adopted by all of Europe in 2016. It maintains that the privacy of communications and personal data are fundamental human rights.
WHAT'S UP ⬆️
Zero-party data aka the user information that a consumer willingly chooses to share. With the clock ticking on third-party cookies, companies need to move their data collection in-house and entice loyal customers to “give up the goods.”
Here are three companies that are getting their consumer data in-house in an innovative way:
Sephora: Sephora’s successful “Beauty Insider” rewards program is the envy of other retailers. Not only can customers earn redeemable reward points for continued purchases, they also get the “emotional” reward of being part of an exclusive online community -- this increases brand engagement, time spent on their site, and most importantly, data shared.
Accrue Savings: Accrue is a new NYC embedded finance startup that provides savings accounts to prospective merchant customers. Accrue builds affinity and loyalty well before users make the purchase, allowing them to feel secure in sharing their information. It is a merchant-embedded shopping tool that allows brands to incentivize users to save towards a purchase without debt, credit or fees.
The New York Times: The media giant dropped third-party data from its ad ecosystem in July. Marketers advertising in the digital Times can still target a choice of 45 audience segments, though, based on the paper’s first-party data.
WHAT'S DOWN ⬇️
Outdated methods of data collection.
Big tech transparency is here to stay, so companies that want to know about their customers’ online behavior need to figure out how to ask them directly.
WHAT'S NEXT ➡️
User privacy has momentum, as do new ways of getting user data. Here’s why, according to our 5 drivers:
Disruption: Privacy on the web is experiencing a major shift. With a cookieless future ahead, the ad industry needs to come up with alternatives to what is now considered invasive personal tracking. And fast.
Innovation: At the end of the day, advertisers still need data to create targeted & effective campaigns. New and creative ways of collecting this data have momentum, from revamped loyalty programs and newsletters to sweepstakes, quizzes, polls and QR codes.
Polarization: Tracking needs & privacy concerns are battling it out like never before. Digital advertising is a $336B industry that thrives off of cookies. At the same time, privacy advocates are pushing for more regulations that the US has yet to adopt at a scale remotely close to what the EU has done.
Stickiness: Thriving in a cookieless world requires connecting data from all channels to create a single view of your customers. One creative way to do that is the use of paywalls that require login, allowing you to easily track customers across time.
Social impact: Privacy protections are top of mind -- FLoC’s innovations could allow it to preserve users privacy but will also allow advertisers to get aggregated information about a group of users.
Those who’ve been calling for more privacy protections and transparency in Big Tech are rejoicing, but advertisers who rely on this user data to target consumers are wondering, “what now?”