Rewind to the early days of the internet, when cookies—those little crumbs of code embedded in browsers that tracked every move on the web—made their grand debut. Retailers could now serve customers with precision-targeted advertisements. The cookies seemed invincible. But little did anyone know, the cookie would crumble.
by Peter Ibarra
Come 2024, Google, the tech giant controlling 65% of the browser market, will cease the use of third-party cookies in Chrome. This move follows the lead of other browsers, such as Safari and Firefox, that have already disabled third-party cookies.
The Downfall of DMPs
This impending industry change has caused significant shifts, particularly for data management platforms (DMPs). It’s not the tech itself that’s the problem, but since DMPS rely heavily on third-party cookies, they just aren’t cutting it in this new privacy-first landscape. Major brands have already cut the cord of their DMPS. In response, industry-leading vendors have started phasing out their DMPs.
Retailers need to realign their strategies with an emphasis on consumer privacy while still personalizing customer experiences. Below are five strategies that retailers can implement to navigate this evolving privacy-first landscape.
Collect and Use First-Party Data
Third-party data is out. First-party data is in. Retailers can collect first-party data—the information gathered directly from consumers—by adding tracking pixels to their website, product, or profile that collects information about behaviors and actions and records it within their customer relationship management (CRM) or customer data platforms (CDPs).
For example, whenever a visitor lands on or clicks on a retailer’s website and looks at their products, the pixel will collect and record that action. Retailers can also collect first-party data from any purchase, survey, loyalty program, or conversation with customers.
Centralize Data with CRM and CDPs
Once you’ve collected first-party data, it’s essential to manage it efficiently. Enter CRM and CDP systems. These platforms not only store the data but also help you analyze it for meaningful insights. With first-party data at the core of your CRM and CDPs, you can develop personalized marketing campaigns, enhance customer experiences, and improve decision-making.
Extra Perk: Monetize First-Party Data
Some retail giants, such as Walmart and Amazon, have established retail media networks (RMNs) to share their first-party data with brands. Brands can access deeper insights into customer behaviors to build stronger customer relationships through relevant, personalized ads and recommendations. Plus, as an added bonus (literally), retailers can monetize it through advertising fees.
Explore External Data Sources
Retailers should also be focusing their attention on alternative data sources. Walled gardens, enclosed digital ecosystems, are worth paying attention to. These ecosystems, such as Google, Facebook, Amazon, and Apple, have a wealth of first-party data. Each of these tech giants possesses an enormous repository of user data that retailers can use.
In addition, retailers can target audiences without cookies by using contextual advertising. This strategy delivers advertisements based on the specific environment in which they are displayed, employing algorithms to tailor ad placements through keywords, website content, and additional metadata. As a result, advertisements are presented to users in alignment with the content they are engaging with at that particular moment. This ensures a more relevant and potentially more effective advertising experience.
Gain Second-Party Data Sharing with Data Clean Rooms
A data clean room (DCR) is an environment that allows companies to share their first-party data in a controlled, privacy-conscious way, creating second-party data. Often, brands that have complementary or overlapping customer data will enter into a DCR to help them make more informed marketing and advertising decisions. DCRs adhere to privacy laws and uphold the integrity of the brand’s customer data so that no personally identifiable information (PII) is not disclosed or misused.
The Near-Future of Advertising
Google will begin phasing out cookies in 2024, starting with 1% of Chrome users in Q1 2024. Prepping in advance is retailers best chance for when cookies finally bite the dust. But, retailers have the chance to shift gears and establish alternative methods today, including saying goodbye to DMPs. Doing so, retailers position themselves to embrace the evolving advertising landscape and maintain their competitive edge.
Peter Ibarra is the Head of AdTech Solutions for Amperity, a customer data platform company that uses AI to deliver a comprehensive and actionable Customer 360. In this role, Peter leads Amperity’s product strategy across digital media, Retail Media Networks, second-party data collaboration, adtech partnerships, and post-cookie first-party activation.
Prior to joining Amperity, Peter served as the Director of Strategic Initiatives at Dstillery, where he oversaw the development of strategic partnerships and managed new data and marketplace integrations for Dstillery’s audience products. Additionally, he led the organization’s internal Alignment & Innovation committee and oversaw the development, implementation, and promotion of Dstillery’s Mission Statement and Principles + Values.
Photo by SAIF ALMANJI on Unsplash
