As Third-Party Cookies Perish, Companies Should Focus on the Right Operating Models, Technology, and Data: Merkle


With newer and tighter regulations, there will be an increased focus on first- and second-party data.

As we head toward a third-party cookie less future, marketers are becoming increasingly confused about the future of user identity, tracking, and addressability as we know it. Further, earlier this year, Google dropped a bombshell sayingOpens a new window that it would not be building alternate identifiers to track individuals. Moreover, new regulations are coming into effect to protect users’ data privacy. All these factors are making it challenging for marketers and businesses to understand what steps they should take to continue marketing effectively and deliver personalization to consumers while complying with the ever-growing data privacy regulations.

Merkle recently released The Future of Identity in Customer Experience ManagementOpens a new window guide, which discusses the evolving marketing landscape, how companies can own their first-party future, and answers to a few burning questions of organizations.

The Evolving Marketing Landscape

The marketing landscape will continue to evolve as consumer privacy concerns grow. The demise of third-party cookies is a result of this evolution. Here is what the landscape may look like going forward.

  • More regulations like the GDPR and CCPA will come into existence. The existing regulations may also become tighter in the future.
  • Third-party data will come under increased scrutiny. At present, no legislation makes it unlawful to collect and use third-party data in the U.S. As such, this practice may attract greater scrutiny from both consumers and legislators, leading to righter guidelines. It may also lead to consolidation of third-party data providers and increased focus on first- and second-party data.
  • Big tech will continue to dictate terms. There is no doubt that big tech companies own massive amounts of consumer data. At the same time, they also act as if they are guardians of consumer data privacy. As such, they may continue making decisions by attempting to stop marketers’ efforts to track consumers with open web signals. The policies set by these organizations may also supersede consumers’ rights to use the free internet.

This may lead to publishers building paywalls to survive, making consumers log in or pay for what was once free content. Big tech’s walled gardens may continue to grow higher with little access to marketers outside. The lack of a universal identifier may also mean the death of many smaller players that do not have gated content or a subscription-based business.

Questions Companies Need To Answer Now

Most companies relying on third-party cookies are currently facing disruption to operations and effectiveness. As such, they should answer a few key questions to understand the disruption and urgency of changes required.

The following are a few key questions and solutions.

1. How will the future of identity affect my organization?

Data and digital transformation are necessary for a customer-centered marketing operation. Traditional operational models will no longer hold. Companies must set a strategic vision and design the operating models for customer engagement from vision to execution. They should further adopt a structure where the leadership is focused on an experience strategy and delivery plan closely linked to the operating and execution teams. Data and tech teams should enable these teams.

Once the company is aligned, the members should think and act differently in response to customer needs, starting with an experience map that goes beyond channel- and message-based marketing roadmaps. Companies must then create a frictionless data flow between marketing, sales, commerce, and service teams to continually update the experience map and determine the best use cases to achieve business objectives.

Also read: Harness the Power of First-Party Data With an Identity Infrastructure: Q&A With LiveRamp

2. How can I build my first-party data?

Most organizations have some first-party data today. To collect more data, companies should tag with a first-party identity resolution service. This type of tag uses a first-party cookie that companies can link to consumer identity signals, such as name, address, email, and mobile number for existing and prospective customers. All these signals are an opportunity to connect to the first-party cookie. However, this requires offering something of value to consumers in exchange for their data.

3. How can I enrich my first-party data graph to create a 360-degree customer profile?

Organizations must be able to deliver digital moments of value at every stage of customer engagement. This creates an enriched experience for customers while driving value to the organization. By enriching first-party data with third-party attributes, companies can create a 360-degree customer profile. There are two ways to accelerate an identity-centered strategy:

  • Promotions to drive accuracy and scale: Promotions can be used at every phase of the customer journey to meet specific objectives. Multiple promotions can be combined to create a robust experience. This type of promotion is designed to strengthen the first-party data profiles with behavioral insights gathered using content-based experience.
  • Loyalty programs: These programs provide a long-term solution to collect customer data and create a lasting relationship with customers by addressing their needs over time. Loyalty programs are “always-on”, woven into every customer interaction.

4. How can I increase relevant channel personalization and conversions?

The ability to serve relevant messages that drive revenue depends on the ability to recognize the individual prospect and customer. It is necessary that the identification process collects the existing identity signals from the website and improves recognition by using an enhanced identity database or graph. Once the website is tagged with a first-party identity resolution service, organizations should establish connections to data, adtech, and martech stacks to maximize the impact.

They can drive content and site experience to be tailored to the visitor with data-based acquisition lightboxes and personalization engines on the website. They can retarget visitors on media platforms and send triggered email messaging, such as abandoned cart reminders, low inventory warnings, and in-stock alerts, to improve conversions.

5. How can I run an efficient media program without third-party cookie data?

Recent legislations have placed restrictions on cross-channel attribution. Hence, to run media programs efficiently without third-party cookie data, media teams should take two actions:

  • Develop plans to maximize consented first-party customer data: This is not about tricking or forcing audiences to share their personal data but creating enough value for customers and communicating the benefits of sharing their data.
  • Select a future-proofed media tech stack: Once companies build their first-party data and have a 360-degree view of customer profiles, they can target audiences on devices without cookies, such as CTVs and audiences within search, with great precision.

Also read: Zero Party Data: An Answer To Consumer Data Privacy and Better Personalization

6. How can I connect all my data across channels?

Companies should move away from third-party cookie-based data and build their own first-party identity graph to gain a competitive advantage. Making this shift is not easy and developing a solution from scratch is impractical. Hence, companies should consider partnering with transparent and consultative identity resolution and graph providers to enrich the first-party graph quickly.

Being prepared for the future means managing first-party data and IDs and first-party interactions. The identity engine behind these interactions will not depend on third-party cookies but first-party data, creating a brand-level identity graph. The graph can later be enhanced through a trusted identity partner’s person-based, third-party graph to add scale into the adtech and martech platforms.

7. How will I measure my digital audiences and media?

Organizations now need to adapt and develop long-term strategies to drive growth using next-gen identity solutions, audience platforms, and novel measurement approaches. As customers and audiences log in, subscribe, or opt-in, companies can use this data to build the right audiences and improve measurement to understand which efforts give results. Approaches to measurement can include tried and tested techniques as well as those that rely on a newer paradigm of partner data sharing:

  • Randomized controlled testing, such as A/B and match market
  • Deploying media and marketing mix modeling
  • Close-loop measurement in data clean room environments

There will be opportunity costs with testing. However, this measurement approach can provide results and actions when properly deployed. The ability to push creatives and experiences to the audiences will also be feasible.

8. Which channel should I prioritize and invest in?

The channel most impacted by the deprecation of third-party cookies is digital display. Hence companies should plan how to compete as the ecosystem changes and invest accordingly. The second channel to focus on is owned assets. This is where companies can capture the most first-party data, tie together identities, and drive audience development for digital media. The next areas to focus on are addressable social and addressable TV. However, the walling off of a garden should be balanced against return and payoff vs. other channels that may be more efficient.

Also read: Gold Rush for First-Party Data as Marketers Get Closer To a Cookieless Future: New Data From IAB

The Need To Evolve Is Imperative

There is no doubt that the marketing landscape is evolving, and companies need to adapt to drive growth. They should focus on the right organizational structure, operating models, next-generation audience platforms, identity solutions, and measurement approaches. If companies make the necessary changes and address the key questions, they will see the impact of this change rapidly. The transformation will help drive better customer engagement and provide a competitive advantage.

What is your roadmap to identity resolution in the absence of third-party cookies? Share with us on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .