It’s Only a Matter of Time Before the Way Marketers Get Data Changes
Time is running out. Google announced that they’ll be phasing out third-party cookies on Chrome in the second half of 2024. Here’s what they said about the change:
“We don’t believe these solutions will meet rising consumer expectations for privacy, nor will they stand up to rapidly evolving regulatory restrictions and therefore aren’t a sustainable long-term investment. Instead, our web products will be powered by privacy-preserving APIs, which prevent individual tracking while still delivering results for advertisers and publishers.”
Google’s stance is that consumers don’t want their movements across the web tracked and used by advertisers. However, the company acknowledges it’s not a black-and-white issue. Instead, they seek a middle ground where advertising can stay relevant and profitable while consumers maintain privacy.
It’s not just companies that benefit from this data. Data collected is essential to offer a personalized experience to existing and potential customers. According to Salesforce, 74 percent of Gen Zers, 67 percent of Millennials, 61 percent of Gen Xers, and 57 percent of Baby Boomers are interested in personalized products.
Google also acknowledges the benefits of first-party data in building customer relationships—the first-party cookie is here to stay. But, whether you agree with Google’s actions or not, change is coming. It’s time to address the challenges organizations face in 2022—and create solutions that preserve customer insights.
We recently conducted a research study to find out how professionals view these changes and how they currently gather and use data. In today’s post, we’ll explore the challenges each attitudinal segment faces.
Data Challenges Span Organizations
As discussed in our previous blog post, 79 percent of respondents say they’re directly involved with data collection decisions at their organizations, and nearly half (47 percent) are purchasing third-party data. 42 percent are using sources like Google and Facebook to do so.
About one-third of respondents say they have substantial data-related challenges their organizations need to overcome, including obtaining the skills necessary to work with customer data and multiple data sources (data silos) that don’t work well together. Additionally, about one-quarter of respondents say their organizations face difficulties gathering data to replace third-party cookies.
Once third-party cookies go away, that’s a lot of data that needs to be replaced. The solution is obtaining your own first-party data that you own independent of data-changing legislation. This type of data is collected directly from customers and is not subject to the same restrictions as third-party data. As a result, businesses that obtain first-party data can be confident that they will be able to continue to collect and use customer data, even if third-party cookies are no longer available. While first-party data may require some additional effort to obtain, it is well worth the investment for businesses that need to collect customer data.
Some ways to collect first-party data are to ask one or two more questions on an online form. Partner with others in your industry to send out an email on your behalf to a form or gated content that will collect that data.
Our research found that organizations are also facing additional data challenges in marketing. 40 percent say it’s hard to find qualified employees in this area, and 35 percent say their organizations struggle to connect with and nurture qualified prospects. Good candidates to manage your company’s data are individuals who are interested in data, who pay close attention to details, and are strong analytical thinkers. Focusing on those individuals should make filling these positions more seamless.
Because data is so essential in today’s marketing and advertising workflow, your success in 2022 and beyond depends on adapting a seamless data flow.
It’s important to know that collecting data can help create a more detailed understanding of existing and prospective customers, but it has to be the right data. Knowing only that someone clicked on a particular link is not as helpful as knowing how many users made a purchase or joined your loyalty program. Analyze past customer behavior and characteristics to help inform what a “good” prospect looks like. Today’s data collection is informed by yesterday’s data analysis and insights.
It’s always a best practice to start with the research questions. Know what you want to learn from your data and use this as a guide for what data needs to be collected. Having a hypothesis or prediction ahead of time can be helpful, but it can also increase the likelihood that you inadvertently adopt a biased approach to data collection. It can also be hard to accept data that doesn’t match your initial prediction.
Different Data Segments, Different Data Challenges
Coming out of the research study, three different attitudinal segments emerged: Independent, Data-Reliant and Concerned respondents. Each feels differently about the challenges their organizations face.
Independent respondents feel optimistic about their organizations’ data practices and don’t worry about third-party data as much because they’re the least likely of any group in the study to use it. They’re also the least likely to worry about buyers blocking their ads or data privacy laws and legislation.
Data-Reliant respondents live and breathe data and believe it’s more important than ever. They have no ethical quandaries about using third-party data and say their organizations have plans to integrate more data into their decision-making.
Concerned respondents make up the largest portion of our study. These professionals believe purchased data carries risks and can negatively influence customer perceptions about their organizations and are looking for ways to replace third-party data when it goes away.
Ask yourself: Which one closely matches your perspective? Your feelings about data can reflect the challenges you face. It can also provide insights into how to overcome them.
Overcoming Data Challenges in Marketing
It’s common for small organizations to be understaffed, underskilled and underutilize the data they do have. On the other hand, larger organizations can misuse data or find themselves in hot water with customers and regulators. Think about the unique challenges your organization faces. What challenges are you most concerned about?
No matter what size organization you’re a part of, always make sure you understand how your data flows. Remember, poor quality data means a poor quality output. We know that gathering data can be tricky. The first and easiest step is just getting email addresses. Also, make sure you and your team really understand the implications of third-party data going away. If you don’t have a plan in place for when the change happens, it’s going to be much more challenging to find a solution.