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Preparing for a cookieless future

Nurdianah Md Nur
Nurdianah Md Nur • 10 min read
Preparing for a cookieless future
Marketers need to ditch third-party cookies and find new ways of customer engagement to address the privacy concerns of consumers and regulators. Photo: Unsplash
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Google announced in April the third delay of retiring third-party cookies in Chrome. Citing regulatory headwinds and a lack of industry readiness, Google will start sunsetting third-party cookies in early 2025 instead of late 2024 as initially planned.

Regardless of the timeline, organisations should move towards cookieless marketing now, which calls for new methods of customer acquisition and engagement without relying on third-party user-tracking data.

“Consumers in Asia Pacific are getting more sensitive about privacy. For example, a Forrester study found that 42% of Australian online adults clear their browsing histories, 23% put up ad blockers, and 21% use private or incognito mode in their browser to protect their online privacy,” reasons Xiaofeng Wang, principal analyst at market research firm Forrester.

She continues: “Mainstream consumer data privacy regulations — such as the European Union’s General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) — also include rules on the use of third-party cookies, requiring organisations to provide transparency and obtain user consent for their collection and processing. Advertisers and their agency partners who heavily rely on third-party cookies for audience targeting and measurement will be most affected.”

Simon Dale, vice president for Asia at Adobe, shares the same sentiment. “By leaving behind third-party cookies, organisations can build a permission-based marketing approach so that customers feel empowered, knowing that their information is used responsibly. The retirement of third-party cookies should not be viewed as a dead end, but a redirection to a brighter future where a successful marketing model is built on hyper-targeting advertising made possible with information collected with permission,” he says.

See also: Why delivering on the AI promise hinges on data and trust

Chart: Twilio’s 2023 State of Customer Engagement Report ​ 

Apac slow to ditch third-party cookies

The shift to cookieless marketing in Apac is still in its infancy. Almost eight in 10 Apac businesses that Adobe surveyed still rely heavily on third-party cookies. Besides that, a Twilio study found that 51% of marketers in the region grasp the theoretical value of alternative data (like first-party data) but hesitate to apply it in their daily operations.

See also: What is required to ensure responsible AI? (Part 2)

Knowledge and capability gaps are among the top factors impeding the shift toward cookieless marketing. “While many Apac organisations claim they are ready for a cookieless future, the reality is that many of them appear to lack comprehensive knowledge and capabilities to implement effective cookieless solutions,” cites Harshana Ariyaratne, chief marketing officer of Affinidi, a holistic identity solutions provider.

He adds: “The evolving privacy regulations landscape across the various markets within Apac adds further complexity for marketers in their initiatives towards cookieless implementations. Furthermore, these solutions must work across both web and application environments across different browsers and operating systems.”

Is first-party data the answer?

As third-party cookies get phased out, collecting and using first-party data/cookies seems to be the path forward for marketing. First-party data refers to the insights a company collects from interactions with an individual, such as the user’s purchase history on a fashion site.

First-party data provides organisations with accurate and reliable information about their existing customers.

It can help them understand customer preferences, behaviours, and purchasing patterns, leading to better customer segmentation and more effective messaging. Additionally, first-party data is owned and controlled by the business, ensuring data privacy and security.

 Xiaofeng Wang, principal analyst, Forrester

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However, she notes that it can be challenging to use first-party data. “Gathering and analysing first-party data can be time-consuming and requires resources and expertise. Furthermore, first-party data may have limitations in terms of scale and reach, as it only represents a specific segment of customers. Businesses also need to ensure they comply with data protection regulations and obtain proper consent from customers to use their data.”

Kat Warboys, Apac marketing director of HubSpot, agrees that the scope and scale of first-party data may be smaller than third-party cookies. This is because first-party data provides insights into existing customers and their user behaviour only on a single website.

Organisations can overcome that by using solutions with conversion tracking features, such as Google’s Enhanced Conversions for Web, to increase observable data. Doing so can improve the overall quality of conversion modelling efforts by brands, and ultimately their return on ad spend.

“In fact, this is an ideal time for marketers to start using Conversion APIs (CAPI), if they are not already doing it. As a server-side tracking option, CAPI enables brands to accurately measure the effectiveness of their advertisements on Facebook or LinkedIn that may have otherwise been blocked by privacy controls common in third-party pixel tracking. This is indicative of the trend that user tracking is moving towards, and brands without a proper plan in place to align with this shift risk losing their competitive edge in the long term. Ultimately, this privacy-first shift should empower marketers to regain customers’ trust,” advises Warboys.

Nicholas Kontopoulos, vice president of marketing for Asia Pacific and Japan at customer engagement platform provider Twilio, adds: “Effectively managing data privacy and customer trust is crucial today. Our State of Customer Engagement Report 2024 found that six in 10 Singapore consumers ranked data protection and transparent communications — such as clear terms and conditions, return policies, and privacy — as a top priority for brands looking to earn consumer trust.

Businesses are now expected to take on greater responsibility for safeguarding customer data while complying with regulations. Additionally, in terms of data volume, first-party data is limited to the brand’s customer base, which may lack diversity or fail to represent the broader market adequately. 

Nicholas Kontopoulos, vice president of marketing for Asia Pacific and Japan, Twilio

Customer data platforms (CDPs) can help marketers achieve a more effective customer experience while upholding data privacy. “They support brands in collecting, analysing and unifying customer data from all channels to fully understand each customer. Additionally, CDPs allow behavioural retargeting of anonymous prospects, ensuring that ads are only shown to consumers whose data has been collected through the company’s first-party sources,” says Kontopoulos.

Calling for zero-party data too

Twilio’s 2023 study found that 92% of Apac marketers are collecting zero-party data in addition to first-party data. Zero-party data refers to information customers intentionally and proactively share with organisations.

“As businesses gear up for a cookieless world, zero-party data will become integral to their operations. By designing more active customer interactions, such as product quizzes and surveys [for zero-party data collection], businesses can unlock a treasure trove of information about their customers, which can then be captured, stored and analysed for future experiences,” states Twilio’s Kontopoulos.

Affinidi’s Ariyaratne adds: “Zero-party data encapsulates the preferences and intentions directly shared by individuals, showcasing the diverse aspects of their digital persona. This information can help identify preferences for interacting with companies and brands. For example, someone identifying as female in their zero-party data could be shown a women’s accessory line by default when they land on a fashion website.”

Having access to both zero-party and first-party datasets, he highlights, is important as they can provide insights into the user’s behaviour patterns.

Data drawn from this relationship between a person’s aspirational view (preferences) and the reality of how they actually behave/interact with a business’s offerings (action) paves the way for companies that want to provide a better customer experience, all while ensuring privacy. 

Harshana Ariyaratne, chief marketing officer, Affinidi

However, he warns that while zero-party and first-party data are generally reliable, contradictions can occur.

Businesses must therefore prioritise users’ most recent and explicit data as preferences evolve. For example, if zero-party data shows a preference for a product category but first-party data reflects a temporary interest due to a one-time event, zero-party data should take precedence.

“Companies should analyse both data types in context to understand customer needs better. Resolving contradictions requires open communication, transparency about data collection, and prioritising accurate, up-to-date user information to deliver personalised, relevant experiences while respecting privacy and consent,” advises Ariyaratne.

Chart: Twilio’s 2023 State of Customer Engagement Report ​

Navigating the cookieless world

Since there is no perfect solution, Adobe’s Dale suggests other ways organisations can adapt to a cookieless world. They could look at:

  • Engaging in contextual advertising
    This involves placing targeted ads based on the content of a webpage and browsing environment, rather than user data or browsing activity. This can be effective for display advertising.
  • Audience segmentation by creating cohorts
    Cohorts are groups of users with shared traits, like location or purchase history. By creating cohorts, organisations can target marketing campaigns to specific segments and measure their effectiveness. This approach is not perfect, but it can replace lost cookie data and give actionable insights into customer behaviour.
  • Using alternative tracking methods
    ​While first-party cookies are still usable, there are other tracking methods to explore in a cookieless world. By using a combination of these methods, marketers can still gather valuable data and target their advertising effectively:
    • IP addresses: Track users by household and browsing data.
    • MAC addresses: Unique identifiers for network devices.
    • Advertising IDs: Track mobile devices and gather user data (shareable with advertisers).
    • Device fingerprints: A combination of device attributes used for identification.
  • Leveraging AI
    By analysing the website behaviour of anonymous visitors, machine learning can predict their actions and personalise their experience, even without knowing their identity. This will be crucial for converting those anonymous visitors into paying customers.

    Also, organisations can use generative AI to analyse data and user behaviour to create personalised content, product recommendations, and marketing messages in real time. This will boost customer experiences by offering a sense of relevancy and catering to individual needs.

These efforts can also benefit organisations beyond customer engagement, including compliance, data ownership and control, as well as improved audience targeting efficiency, which leads to building trust and transparency amongst audiences for a more optimal customer experience and increased brand loyalty. 

Simon Dale, vice president for Asia, Adobe

Meanwhile, HubSpot’s Warboys highlights the importance of measuring cookieless marketing efforts.

In a cookieless world, success will be contingent on the ability to consistently measure outcomes, enabling brands to adjust or double down on efforts for optimal outcomes. Tools like a customer relationship management (CRM) platform will enable companies to consolidate information from disparate channels and sources to create a single source of data. This can then be leveraged to accurately measure the impact or effectiveness of marketing activities and deliver an all-round better customer experience.

Kat Warboys, Apac marketing director, HubSpot

The shift towards cookieless marketing opens doors for a new era of customer engagement. However, organisations that want to use personalisation to improve customer experiences must also adopt a privacy-first approach to earn consumer trust and ultimately get a competitive advantage.

“Marketers should be transparent and granular about data collection and usage and learn to communicate to consumers that the value is not just in free content or free samples but better personalisation, more customised services, and products that ultimately yield better customer experiences,” advises Forrester’s Wang. 

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