A World Without Tracking Cookies? How Retailers Can Cope In A Brave New World - Lift361

Our Thinking

A World Without Tracking Cookies? How Retailers Can Cope In A Brave New World

By Ed Higdon. Posted in Action | Insight

March 08, 2020

For over two decades, cookies have been used to track online user activity and target consumers on the internet. Cookies are small snippets of code that follow users as they browse the web, collecting data about clicks and behaviors. From there, users are classified into different audience segments that advertisers can use to target and retarget ads.

Cookies have always been controversial, but in recent years, consumers have become very outspoken about online privacy concerns. No one really likes being tracked online, but cookies have also been an effective tool for marketers to reach their ideal customers online. However, it now seems like consumers are winning the battle and cookies are moving towards obsolescence. If that happens, what can retailers do to effectively reach customers online?

The Slow Demise of The Cookie (Led By… Big Tech?)

Given the success big tech has had with cookies over the years, it would seem counterintuitive to eliminate them from their perspective. However, big tech has actually taken the lead on phasing out cookies.

Apple recently decided to go head-to-head with Google on the hot button issue of user privacy and cookies. Google has long been criticized for the types and amounts of data it collects on users and while the Google Chrome browser has been allowing users to opt out of tracking for some time, there were many loopholes in the system that allowed advertisers to circumvent those controls.

In response, Apple adopted to Intelligent Tracking Prevention 2.2 (ITP) in its Safari browser to close loopholes and block cookies. Given the continued public push for more privacy and the success Apple had in marketing its privacy controls, Google finally joined in, adopting ITP.

Together, Chrome and Safari make up 80% of the browsing market, making cookies much less effective. Furthermore, Facebook has said they will stop allowing advertisers to serve cookies altogether, cutting off third-party data access. Twitter has also said it will stop cooperating with third-party data providers, as well.

Will You Really Miss Behavior-Based Marketing?

If cookies are on their way out of fashion, what’s next for retail marketers? Cookies facilitated hyper-targeting and without them, many marketers are left to wonder how they can remain effective at reaching their target audiences online. The answer? Everything old is new again. Remember the old days of contextual advertising and keyword-based targeting? The death of the cookie means the resurrection of these “old school” tactics.

The problem with cookie-based behavioral advertising is the inability to separate the person from their online behavior. Say you are a marketer who spends time working at home on your personal laptop each night. In short order, you’ll begin to see ads for things like email marketing platforms or other marketing tools. Later, however, you close up work and start browsing baking recipes, your true passion. Rather than getting ads for cooking tools or other recipes, you’ll still see ads for marketing technology because the searches you ran in work mode are still attached to your profile. Those ads are irrelevant when you’re working on personal projects, meanwhile, food-related marketers miss out on the opportunity to communicate with you while you’re in baking mode.

This same sticking point happens to retail marketers every day. Behavior-based targeting is effective, but there are gaps. Cookie profiles fail to take into consideration the person behind the behaviors, which can mean missing out on ideal opportunities to get messages in front of people looking to make a purchase.

The Answer? Target People, Not Devices

According to the report, “Contextual Advertising: The New Frontier,” contextual advertising is experiencing a rapid resurgence in direct response to the phasing out of cookies. The report, which is based on a survey conducted by YouGov, found that almost half of all U.S. businesses currently rely on contextual targeting methods.

Focusing on contextual advertising ensures marketers get their messages to the right people, rather than just the right device. It ensures that while you’re researching recipes, you’ll see ads for baking-related products and when you’re in work-mode you get targeted ads for marketing technology tools.

In addition to contextual advertising, people-based advertising is also experiencing a surge. Brought into fashion by Facebook, people-based advertising assigns a unique identifier to each user, rather than the device they are on. So whether they are on their laptop, smartphone, tablet or even their work desktop, advertisers can connect to the right people at the right times.

Here’s how it works. First, you take offline customer data in your database such as email address, phone number, purchase history, etc. Then, the data is securely matched to other identifiers like device IDs. Then, it is used on digital platforms where customers can be segmented and targeted.

The beauty of people-based marketing is that you can leverage the data your own company has collected rather than relying on third parties to tell you where to go to find your customers.

Are You Ready For A Post-Cookie World?

Competing online in a post-cookie world will require a bit of “back to the future” thinking. Re-embracing contextual marketing and diving deep into people-based marketing can help retailers better reach and serve customers.

If you’re ready to adopt post-cookie marketing strategies that leverage your existing data, we can help. Contact us today to learn more.