Why retailers shouldn’t ditch their data strategy after Google’s cookie reversal
Google’s announcement on Monday that it will not phase out third-party cookies, as it first said it would do in 2020, has been reported as a win for advertisers, including retailers, who use cookies to track individuals on the internet, in part to personalise their offers and other communications.
Instead of eliminating third-party cookies in its Chrome browser, Google will now enable users to turn cookies on or off in their privacy settings. This will bring the world’s most popular browser in line with Apple’s Safari browser.
However, marketing expert Mark Baartse said that most users are expected to opt out of cookies on Chrome, so while it marks a major reversal for Google, it won’t change the end result for retailers.
“In [Apple’s] iOS14.5, we’re seeing an average of about 30 per cent of people opt-in, and so, 70 per cent opting out,” Baartse told Inside Retail, noting that this varies by industry.
Depending on Google’s UX implementation, “we could lose 70 per cent of our tracking from Chrome,” he said.
This means that the “already heavy modelling most of our analytics platforms do will just make their models work even harder,” he added.
“However, let’s not be complacent. Many online retailers have Safari as their top traffic source, and Safari has been manhandling third-party cookies for years. Firefox and other less popular browsers have largely blocked or severely restricted third-party cookies for a while. So it’s not really something new, just a continuation of what already was.”
Business as usual
Indeed, many retailers have been preparing for the ‘death of cookies’ for years by amping up their first-party data strategies, and Baartse believes businesses should continue to do so.
“This doesn’t really change that much,” he said. “If we are losing 70 per cent of our Chrome addressable audience, and have already lost a bunch on Safari et al, let’s just assume whatever cookies are left are a bonus, but not rely on them.”
At the same time, Baartse noted an increase in regulation and legislation around the use of third-party cookies.
Forthcoming changes to Australia’s Privacy Act, due to hit parliament soon, are expected to be stricter than the European GDPR, and the UK’s Competition and Markets Authority has said that it is “considering the impact of [Google’s] announcement” and welcomes public comment.
With that in mind, here’s a look back at some of the top suggestions from retail experts on how to maximise first-party data.
Tips for collecting first-party data
In January, marketing tech expert Richard Taylor wrote an article for Inside Retail on a trial that saw Google kill off cookies for 1 per cent of Chrome users. While that trial is now moot, Taylor’s recommendations for how retailers can personalise their advertising using first-party data are still relevant.
“Consider the interactions on your website, user engagement with content, time spent on your platform, or purchase history,” Taylor wrote in an article for Inside Retail.
“First-party data offers crucial insights into customer habits and preferences. It not only deepens your understanding of your audience but also drives more effective marketing strategies.
“Properly analysed and interpreted, this Customer Experience (CX) data can create personalised experiences that resonate with your customers, giving you a competitive edge in a fragmented digital landscape.”
Another marketing expect, Dr Jason Pallant, shared four tips for collecting first-party data from customers in this 2023 article:
- Conduct a data audit
- Communicate the purpose with consumers
- Create value for consumers, not just yourself
- Make it easy (a.k.a. the ‘logged in’ state)
“Retailers need to stop trying to mine data like commoditised oil, and start thinking of it as something you can exchange with your customers for mutual benefit,” Pallant wrote.
“Those who are proactive and can create compelling propositions for consumers to want to share their data will have a huge advantage. Those who don’t will be at best battling to catch up, and at worst could be facing major regulatory challenges and even consumer backlash in the near future.”
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