When the Cookie Crumbles, Where Does That Leave Third-Party Data?
Google will block third-party data collection in Chrome by the end of 2024. If your marketing relies on this, that means you have a year to figure out customer data practices (but you’re not alone!).
Our research study shows that about half of marketers worry about their organization’s ability to succeed without third-party data. At the same time, nearly three in four marketers believe that company-owned data about customers and prospects is more valuable than ever. It’s clear that the road ahead is paved with first-party data.
Most of us know we can’t rely on third-party data much longer, but analyzing first-party data to turn insights into action can be challenging. Our research suggests that marketers need more data skills to make the transition away from third-party cookies — about one in three marketers say their organizations don’t have the skills to use customer data effectively.
Now’s the time to take steps toward a first-party data future if you haven’t already because you need to be strategic about data practices and your transition plan.
Implications for Reliant Marketers
Moving from third-party (paid) data to first-party (owned) data is a smart strategy for marketing professionals. Here are five implications you’ll see when the switch happens.
- You won’t be able to track customers across the internet. Without third-party cookies, you won’t have the same insights about your customers’ movements and behaviors, including purchasing habits, interests and demographics. Retargeting, frequency capping and attribution are all strategies that will be impacted by the change.
- Tech stacks will become more complex. Gathering your own data means investing in technologies, data-related tasks and skilled employees. Because there will be more data to manage, you’ll need to spend more time keeping it secure and organized and deriving actionable insights.
- Data-forward companies are better positioned to sell. Companies prioritizing first-party data have a competitive advantage when it comes time to attract customers. A company that knows its customers well is a better investment.
- There are more opportunities for innovation. Marketers are known for being creative, and with data use evolving, it’s just one more opportunity to capitalize on your innovative mindset.
Despite the implications above, there’s still a lot we don’t know and third-party data going away. Accepting uncertainty is part of moving forward. Some marketers believe Google’s third-party cookie phase-out is driven by profits from shifting advertisers to Google’s first-party cookies options rather than a desire to preserve consumer privacy. One thing you can control? The first-party data you collect.
Transitioning From Third-Party to First-Party
Prioritizing first-party data can help companies become more resilient, agile and strategic about marketing. But you need a roadmap with small, manageable steps to get there. Start with an audit to get a holistic view of your data practices, and answer these questions:
What customer data do you already gather?
Over two-thirds of marketers gather basic contact information, such as name, email, phone number and address. Another one in two gathers purchase frequency, purchase history and personal information, such as interests, household income and age. We recommend you only ask your customers what you need and nothing more. For example, if somebody downloads a case study from your website, don’t ask them for their address and phone number.
Where do you store customer data?
Our research shows that 70% of marketers store customer data in more than one database (for example, CRM, database software and spreadsheets). Of those who use CRMs, 84% use a single CRM that manages customer data across departments. Keeping your data in one place is best because it reduces redundancies, extra costs and lessens security risks.
While most are happy with their CRM, the training required to use the system can be frustrating because data management and analysis require skill. Although it can be daunting for your team to take this on, it doesn’t have to be. Take it slow, and start by focusing on the basics of CRM and build from there. You can expand once you become more comfortable with the process. This incremental approach will help you prevent getting overwhelmed, make sure your CRM goals are met and ensure your customers have a positive experience.
Who has access to it?
Our research shows that about 40% of marketers analyze customer data or use it for their work. About four in five make decisions about data collection. While data can be incredibly valuable in planning marketing campaigns and initiatives, it’s important to keep access on a need-to-know basis.
Just as every business has important assets and investments, customer data privacy is as essential to any company as money in the bank. Our customers provide us with sensitive information, trusting us not only with their data but also their loyalty. That’s why it’s so important to ensure it’s handled carefully and treat this responsibility with respect. The more people are involved, the higher the risk of an accident or leakage. Keeping customer data secure requires time and attention, but it’ll allow you to provide a higher standard of service to your customers.
How long do you keep customer data?
Marketers, on average, keep customer data for nine months. In our experience, nine-month-old data is likely already outdated. People move, change jobs and switch their buying habits at a more common rate.
We know keeping up with customer data can be challenging. That’s why it’s important to have universal formatting for your data that’s used company-wide. Take steps to verify new information, whether it’s by sending a verification email or using a third-party service. Keeping tabs on your data needs to be part of your regular workflow, not just something you do once or twice a year. This will help ensure any incoming data is entered and implemented correctly throughout your system. Plus, you can rest easy knowing your customer data is always up to date.
More Factors to Consider
Your marketing practices, staff and tech stack all help determine what the transition away from third-party data will look like.
Take stock of how much your marketing initiatives rely on third-party data. Strategies like programmatic media buying; SEO and keyword research; targeting and retargeting ads; audience segmentation; and list buying rely on third-party data. If the bulk of what you do comes from data you pay for, you’re at risk.
Ask yourself: What internal resources do you have, and will they be assets during the transition?
If you have team members with data analysis skills or cybersecurity experience, you may be in a better position. Consider investing in data skills education and training for staff so they can learn new ways of understanding customers.
Your tech stack is also an important factor when considering how well you’ll adapt to the transition. If it’s a well-oiled machine where data is organized, secure and accessible to the right people, you’ll have an easier time with the change.
To keep your database clean and healthy, you need an accurate understanding of your data policies. Tell customers up front what data is needed and how it‘ll be used. This will help streamline the process and create a more organized database in the long run.
The Future of Marketing
Imagine a future with less generic data, more meaningful audience profiles and trust-based customer relationships. That’s what’s lying on the other side of the transition. You don’t need third-party data to provide engaging, educational or relevant customer experiences. What’s most important is to start the transition now and invest in technologies that make it easier to collect, store, analyze and use your data.
To learn more about the research study, check out our entire Executive Summary. And to explore the data yourself, check it out here.