Hey Team,

Fun fact: I’ve been writing this newsletter for 8 months. Each week, I sit down and question whether my content is resonating with my subscribers.

So instead of pondering, I thought I’d actually ask you all this week …

If you could take 10 seconds out of your day to tell me about your preferences for this newsletter moving forward, that would be really appreciated. You’ll get to see the poll results in real time …

Thank you 🙏. Now onto the content for this week - cookies 🍪 …

The Demise Of The Third Party Cookie 🍪 What It Means For Zero & First Party Data

The reason behind this newsletter is because first party data seems to be the new buzzword in CX at the moment.

I’ll be honest though. As much as I hear it thrown around, I’m still not really clear on what it actually means. And if I’m not clear, I suspect there’s others that might be confused as well.

Below, I’ve tried to break down this topic into bite-sized chunks 🍪. I hope you enjoy…

What Are Third Party Cookies 🍪?

Third-party cookies are small text files that are stored in a user's web browser by a website that the user did not directly visit. These cookies are typically used by advertisers and other third-party entities to track a user's browsing behaviour across multiple websites, allowing them to deliver targeted ads and personalised content.

A third-party cookie is the reason that Facebook will show you the product you were just searching for on another website.

Why Are Third Party Cookies Being Deprecated?

The main reason for the deprecation of third-party cookies is concerns over user privacy and data protection. Many users are uncomfortable with the idea of their personal data being shared across the web without their explicit consent. In addition, there have been several high-profile data breaches and scandals related to the use of third-party cookies, which have eroded trust in online advertising and data collection practices.

In response to these concerns, major web browsers such as Google Chrome, Safari, and Firefox have announced plans to phase out support for third-party cookies in the near future. This means that third-party cookies will no longer be supported by default, making it more difficult for advertisers and other third-party entities to track users across the web.

While the deprecation of third-party cookies represents a significant challenge for advertisers and marketers, it also provides an opportunity for businesses to focus on collecting and using first-party and zero-party data to better understand their customers' needs and preferences. By building deeper relationships with their customers based on trust and value, businesses can continue to deliver effective and personalised experiences without relying on third-party cookies.

Implications Of Not Being Ready For Third-Party Cookie Deprecation

The phasing out of third-party cookies by major browsers is going to make it extremely difficult for businesses to target users with personalised ads. This will likely lead to a decline in the effectiveness of online advertising, as businesses may have less insight into users' interests and behaviours.

To adapt to this changing landscape, businesses may need to focus on collecting and using first-party and zero-party data to better understand their customers' needs and preferences. This may involve developing new strategies for engaging with customers and building relationships that prioritise transparency, trust, and value.

If businesses have sufficient access to zero party and first party data, they will be able to:

1. Trigger marketing campaigns to interested customers without having to rely on third-party cookies
   

2. Become more sophisticated with their retention tactics. I anticipate that there will be a much stronger focus on customer retention once third-party cookies are deprecated because customer acquisition will become a lot more expensive & inefficient.

What is Zero-Party Data?

Zero party data is information that is willingly provided by customers and prospects to a business. This can include preferences, opinions, and other personal data that is voluntarily shared through surveys, quizzes, and other interactions.

Unlike first-party data, which is collected by a business through its own channels, zero-party data is directly provided by the customer.

Zero party data is valuable because it allows businesses to gain a deeper understanding of their customers' needs and preferences. It can also be used to personalize marketing campaigns, create targeted content, and develop new products and services.

Collecting zero-party data has suddenly become increasingly important due to a number of factors:

• Apple’s Privacy Changes - these made it hard for businesses & advertisers to track user behaviour on mobile devices.
  

• Google’s Third Party Cookie Deprecation (planned for 2024) - this change means that organisations are going to be more reliant on having their own database of customers (and prospective customers).

What Is First-Party Data?

First-party data is information that a business collects directly from its customers or website visitors. This can include data such as demographic information, purchase history, and website activity.

First party data is typically collected through website analytics, CRM systems, and other internal data sources.

First party data is valuable because it allows businesses to better understand their customers and their behaviour. It can be used to create more targeted marketing campaigns, personalise content, and improve the customer experience.

FUN FACT: When you accept cookies on a website, you are opting into an organisation collecting first-party data on you, amongst other things.

Why is Zero-Party & First-Party Data Becoming More Important To Organisations?

Put simply, organisations have recently had an “ahh shit” moment. They’ve realised that they won’t be able to rely on third-party sources for customer acquisition as effectively as they have been. This means that it will cost a lot more to acquire a new customer, which will likely shift the focus to retaining their existing customers:

1.  Privacy: Privacy concerns are making it more difficult for businesses to collect data from third-party sources. With the rise of GDPR and other data privacy regulations, businesses are being forced to rely more heavily on their own data sources.
   

2. Accuracy: Zero-party & first-party data is often more accurate and reliable than third-party data. When businesses collect data directly from their customers, they can be sure that the data is accurate and up-to-date. Third-party data, on the other hand, may be outdated or inaccurate.
   

3. Personalisation: This data allows businesses to create more personalised and relevant marketing campaigns for their existing customers, or for prospective customers. By understanding your customers' preferences and behaviour, businesses can create content that is more likely to resonate with their target audience.

According to a survey by Google, 92% of marketers believe using first-party data to continuously build an understanding of what people want is critical to growth.

Additionally, a report by AdRoll found that companies that use first-party data for retargeting campaigns see a 50% increase in click-through rates and a 35% increase in conversion rates.

Personally, I’ve seen leading organisations leverage customer survey data to modify their marketing audiences. Businesses have saved millions of dollars by suppressing detractors from their marketing audiences.

Yet whilst the benefits of zero-party & first-party data are becoming increasingly clear, the collection of this data is lagging. In Adobe’s 2022 Digital Trends Report, there were some alarming stats:

• A significant minority of practitioners (38%) are still not prepared for their cookie-less futures.
  

• For marketing organisation laggards, the situation is all the more burning. Only 21% consider themselves prepared for the end of the third-party cookie. New partnerships and ecosystems are urgently needed to keep up.

How Zero & First-Party Data Can Drive Increased Personalisation

1. Tailored product recommendations: Use first party data such as purchase history and browsing behaviour to recommend products or services that are tailored to each customer's needs.

2. Targeted messaging: Use demographic information and other first party data to create targeted messaging that speaks to each customer's unique interests and needs.
   

3. Personalised offers: Use first party data such as purchase history and loyalty program activity to create personalised offers and promotions that incentivise customers to engage with your brand.
   

4. Customised landing pages: Use first party data to create customised landing pages that are tailored to each customer's interests and needs.
   

5. Customised retention experiences: Trigger surprise & delight offers prior to renewal of customers using personal data relating to their specific situation e.g. birthday offer, interests etc.
   

6. Marketing retargeting & suppression: Use first party data to create personalised retargeting campaigns that re-engage customers who have shown interest in your products or services. Additionally, leverage customer survey data to actually suppress certain customers from marketing e.g. those who have shown dissatisfaction.
   

7. Channel preferences: Use first party data to trigger messaging that is tailored to each customer's preferred communication channel, such as email, social media, or SMS.

Key Considerations When Collecting Zero & First-Party Data

1. Data Storage: Where will you store your zero-party & first-party data? Whilst it needs to be secure, it should also be easily accessible for relevant teams (sales, operations & retention).
   

2. Connectedness: It is highly likely that you are collecting this type of data across multiple channels, sometimes unknowingly AKA omni-channel data. It’s important to implement a data governance strategy where somebody is responsible for connecting the dots between different datasets.
   

3. Activation: Zero & first-party data will only become useful if it is used to drive better outcomes for customers. Your data, marketing & retention teams should be leveraging these data sources to orchestrate personalised experiences across every customer touch-point.
   

4. Customer Trust: Customers are becoming increasingly aware of data privacy concerns, and businesses that are transparent and respectful of their customers' privacy are more likely to gain their trust and loyalty over the long term. Similar to how organisations expect ROI on investments they make, customers expect to see an ROI from the data that they provide. Make sure you’re acting in good faith.
   

5. Data Analytics: Data can be bucketed into 3 categories - descriptive, prescriptive & predictive. Start to critically think around how you can turn descriptive data into prescriptive & predictive data models.

To those worried about the demise of third-party cookies, I recommend focusing on building strong relationships with customers based on trust, transparency, and value.

This means investing in collecting and using first-party and zero-party data to gain a deeper understanding of customers' needs and preferences, and using that data to deliver personalised experiences that resonate with them.

By taking this approach, businesses can create stronger bonds with their customers, build brand loyalty, and ultimately drive better business outcomes, regardless of the challenges posed by the deprecation of third-party cookies.

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