Will customer experience personalization still be possible in a cookie-less world?

With increasing awareness and expectations around data privacy, the depreciation of third-party cookie data needs to remain front-of-mind for all digital advertisers shaping up their data strategies for the future.

Digital is driven by data. The digital ecosystem has spent 15 years building up supply chains and infrastructure on the premise of having access to rich, readily available data on consumers, their online behaviors and - fundamentally – their propensity to become a customer. We now face an altered (and potentially less-informed) landscape in the not-so-distant future.

Who are these changes motivated by?

These changes of course don’t impact brands and marketers alone. This heightened focus on digital privacy will change online customer experience, so it’s important to understand what users think about online privacy.

Flashback to 2019 and one could confidently say that concern about online privacy was steadily increasing among consumers, up 5% globally between 2015 and 2019 (according to GWI data). But when the pandemic hit, this trend stalled and even reversed in many markets. It’s hard to pinpoint why, but factors likely include GDPR and thankfulness toward the internet through lockdowns.

Looking at GWI data, the picture in the UK is that just over a fifth (22%) of consumers say they feel in control of their personal data online; 35% say they prefer to be anonymous; and 40% say they worry about how companies use their personal data. Older age groups and females are considerably more likely to be concerned.

Will accurate measurement still be possible?

The biggest concern among marketers is the deprecation of third-party cookies harming digital marketing performance. Measurable return on investment will drop. Some customer actions and behaviors will no longer be measurable, and there will be a knock-on effect as parts of the user journey become untrackable, negatively impacting activity such as programmatic spend.

Another key consideration for cookie-reliant brands will be measurement accuracy. Authority of measurement is in the eye of the beholder; no attribution model is completely accurate. Some tracking tools and methods will be less well-informed than before, making brands and marketers take a wider view of what activities impact their customers, moving from click path analysis to broader econometric modeling.

There’s also a trust issue with Google. If you’re using their measurement of ROI, taking data from their own walled garden and putting it up against other advertising, how can you be sure they are not over-valuing their work versus competitors’?

To consistently vet the value driven by an activity requires planning and structured implementation with measurement in mind.

The demise of CX personalization?

For years, brands have used third-party cookies to track behavior and collect data, improving targeting and on- and off-site experience. With the power to track and analyze interactions across websites, marketers are armed with the insights to personalize experiences and build strong, lasting relationships with customers.

This opportunity for customer experience personalization varies industry-by-industry and depends on the state of your data. However, without third-party data there will be less visibility of a brands’ prospect audience, meaning granular personalization via some acquisition channels will diminish. So engagement and conversion rates are likely to decrease.

Optimizing and innovating customer experience off the back of improved first-party data strategies will now (more than ever) be imperative to delivering memorable experiences. Think of your own brand and industry - how different are your user journeys vs competitors? Do customers receive a similar experience across your industry? Revisiting your data strategy will help unlock powerful, real-time campaign opportunities further down the funnel.

Harnessing opportunities in a cookie-less world

Consumers have a complex relationship with digital privacy. Marketers need to understand where their customers sit on the privacy attitudes and behaviors spectrum and adjust their strategies accordingly. Privacy is a high-stakes game, and we all need to work together to ensure that consumers come out as the winners.

These imminent changes by no means render personalization and online customer experience obsolete. This in fact presents a great opportunity for brands to balance potential lost revenue at the top of the funnel by planning now to make more of their own CX, CRM and first-party data strategies.

Brands must devise new ways to target and learn about relevant audiences without being intrusive. To future-proof for rapidly approaching regulatory restrictions, a robust first-party data strategy throughout the entire customer data supply chain is required. Any marketers worried that these changes mean the end of optimized customer experience can breathe a sigh of relief and look forward to the opportunities that lay ahead.