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What next for third-party data?

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In January 2020, Google announced that it would stop supporting third-party cookies as part of a phasing-out process that would last “no longer than two years”. It was a step they took that reacted specifically to consumer concerns about privacy, for what could be symptomatic of a broader trend of global tech companies doing more to protect the user.

Although it’s undoubtedly a positive development for more robust user experiences, it does present several issues about how ad targeting will work in the future. The uncertainty around what this means became a little clearer with an announcement about the new focus in March 2021, offering further clarification on their alternative to tracking internet users, grouping them as part of a Federated Learning of Cohorts, or Floc, system.

Floc groups users together based on behavior, so while you can no longer track users across the internet, their behavior shifts them into bigger groups. A win for the user’s privacy initially appears to be diminished by the possibility of serving them less relevant ads instead, but in their announcement Google reported ads using Floc are 95% as effective. This is, of course, early days, and the impact this move has on how ads are served to internet users will only truly be known once the development is permanent.

How will this impact ad work?

Firstly, it’s worth acknowledging the move towards a more privacy-focused customer journey is a good one, certainly in the long term. Consumer fears about being tracked across the internet can lead to negative perceptions, damaging your plans to target new customers. The hope is that customers will feel reassured that they’re not being targeted for the wrong reasons, which allows for less suspicion and greater trust.

So, while there may be slight drop-offs in the volume of customers viewing ads at the top of the funnel, this could potentially mean a better chance of engagement with the ones that do see them. A positive user experience is essential in powering conversions and ensuring a greater chance of customers becoming advocates. The customer journey ending with conversion is a hugely dated ideology, and this development, a natural evolution in an industry under constant flux, simply underlines that.

It should also make it harder for quick-fix marketing, even in the short term. Simply throwing vast sums of money at ads to lure consumers to your webpage will continue to have diminishing returns, underlining the need to develop an omnichannel strategy focused on the long-term building of trusting customer relationships.

When is it coming in?

Google’s initial statement suggests third-party cookies will be gone entirely by January 2022 at the latest, but that time could come sooner. Any marketing strategy must account for this relatively quickly in 2021. While the presence of Floc shouldn’t cause too much in the way of issues for well-coordinated marketing plans, there may still be diminishing returns. This could be particularly prevalent if your product or service relies too heavily on third-party data to bring customers in at the top of the funnel.

How does this impact users on Facebook and Apple?

This announcement directly concerns Google, but it is part of a broader development among the big tech giants’ reaction to negative feedback from users around their privacy. Apple’s App Tracking Transparency feature has already seen a conflict between them and Facebook brewing. Simultaneously, Facebook has also been embroiled in an unrelated but potentially just as important row with the Australian government about payments towards media providers.

It all leads to a tumultuous future for how the user will interact with the three leading players on the web. Again, this is further proof of ensuring your digital marketing strategy is centred around an omnichannel approach with a long-term goal. The user experience remains the most crucial element of attracting, delighting, and engaging buyers with your brand. So their needs must be met with consistency across every touchpoint.

What is the solution?

The most obvious solution to the end of third-party data is to improve a much better source – first party. As customers will have granted direct permission for you to hold their data, this instantly offsets many of the trust issues and puts the customer’s goals at the centre of the relationship.

In Google’s announcement, the company reiterated its support of ads on their platform using first-party data, so you will be able to continue to target people who have visited your site elsewhere they travel on the internet. But the benefits extend long beyond Google. First-party data enables more meaningful and nuanced communication with your customers, allowing you to leverage better relationships and rapidly develop more of your audience as brand advocates.

Investing in stronger communication sequences and more empathetic techniques to increase your first-party data was a smart tactic before this development, but a move away from third-party data only underlines how crucial it will become. It emphasises the benefits of CRM, social media, UX and other marketing channels, particularly in how PPC campaigns recruit customers for these disciplines.

The best marketing will always put the user at the center, and an omnichannel approach coordinating every marketing discipline around the customer is the best way to deliver this. At Soap Media, we’ve been optimizing the customer experience since 2005, and our long-term focused digital marketing strategies perfectly place us to react to shifts such as this and partner with you.

If you want to know more about how rising internet privacy concerns will impact your marketing strategy, book a free discovery call with us today at hello@soapmedia.co.uk.