While third-party cookies will currently continue to exist, the reality is that a big proportion of the open web cannot be addressed by third-party cookies. In light of this, marketers are urged to pursue other ways of targeting and measuring to prepare for a low-cookie world. This chapter explores different data types and collection methods, and their benefits and challenges.

  • The need for change
  • Focusing on first-party data
    • Introduction to data types
    • Benefits and uses of first-party data
    • Challenges of first-party data
    • Enhancing data sources with zero-party data
  • Preparing for the ongoing decline of third-party cookies

The need for change

Many developments around privacy and tracking have already impacted the way that marketers can measure. The blocking of third-party cookies across Firefox, Safari and Internet Explorer, as well as Apple’s App Tracking Transparency (ATT), are already making it a challenge for companies to tie together a user’s activities across the internet. In addition to this, customers have also been taking action to prevent being tracked by deleting or blocking cookies.

“Every day it’s becoming more difficult to track a user’s entire purchase journey, meaning marketers are having to rely on less accurate measurement and more assumptions.

“We are already seeing this in Google Ads … In the Search Terms report, I’ve seen accounts where 40% of the search term data is missing, even if it’s resulted in conversions.”

Brooke Osmundson, Director of Growth Marketing, Smith Micro Software[1]

While many publishers and tech platforms such as Google, Facebook, Amazon, and TikTok offer their own reporting tools, they can only measure how a campaign is performing across their own channels and do not take into account the impact of other channels. While a company may get some insight into the short-term impact of their campaign, it will not enable them to understand the medium and long-term impact of their marketing. This point was evidenced in an article by Meta, Nielsen and GFK showing 60% of all the effects of advertising were long-term, meaning driving consideration among future buyers as well as immediate ones.[2],[3]

Despite the challenges, marketers remain mostly optimistic about the decline of third-party cookies. Econsultancy’s Future of Marketing report revealed that 71% of marketers feel that there are already viable alternatives available, with 69% believing that the industry will respond with a better system of measurement (Figure 1).

Figure 1: Do you agree or disagree with the following statements? (agree only)

Source: Econsultancy’s Future of Marketing survey | Sample: 383

The report suggests that part of the reason for this optimism is that many believe the changes will lead to companies adopting more positive, customer-centric data strategies that have a clear stance on privacy, with 93% of marketers recognising that privacy needs to be integral to any measurement strategy (Figure 1). However, while it would seem that over 70% of marketers believe that there are viable alternatives, less than a third (29%) say they have a robust measurement system in place.

Among the marketers whose organisations are putting alternative measurement arrangements in place, the most popular method is to focus on collecting first-party data (65%), according to Econsultancy’s Future of Marketing report (Figure 2). This is followed by brand studies (49%), zero-party data (40%) and market research (40%).

Figure 2: What alternative forms of measuring digital marketing campaign effectiveness is your organisation already using, or considering adopting? Select all that apply

Source: Econsultancy’s Future of Marketing survey | Sample: 362

The following chapters explore in more detail the alternative measurement options available to marketers:

Regardless of the specific measurement approach selected, there is consensus that a focus on building up more first-party data remains a priority for preparing for the future.

Focusing on first-party data

With the ongoing decline in the availability of third-party cookies, more emphasis has been placed on the need for marketers to focus on collecting their own data in order to understand how their campaigns are performing and to reach audiences. This section discusses the importance of building up a company’s own data sources, along with the key considerations for laying the foundations of an effective approach to measurement.

Introduction to data and types

It is clear from Econsultancy’s Future of Marketing report that companies are recognising the importance of gathering their own data. The survey revealed that first-party data is in use or being considered as an alternative to third party cookies for measurement by 84% of respondents. This is being further supported by a focus on zero-party data, which is in use or being considered by 70% of respondents. Table 1 outlines the differences between the different data and cookie types, and how these relate to measurement approaches.

Table 1: Different data and cookie types, and how they can be used

Data type Definition and collection methods Use in measurement
Zero-party data
  • Subset of first-party data that is provided directly by customers and users (rather than stored in a cookie).
  • Includes profile information such as date of birth, gender, interests, content preferences, size preferences, etc.
  • Can be collected during the sign-up process, via surveys, polls, quizzes, or through loyalty programmes.
  • Users provide the information to improve the experience they receive through personalisation or added value.
  • Requires privacy and data processing policies that comply with the current privacy laws to be in place.
  • Can be used to enhance understanding of customer behaviour, augment existing first-party data and support ad targeting and personalisation.
  • Can be anonymised and shared in a data clean room to be analysed alongside other datasets and used in ID solutions.
First-party data
  • Defined as data that a company has collected directly from customers or audiences that have engaged with the company.
  • Can be collected directly from customer contact, registration forms, email sign-ups, or via analytics.
  • Includes preferences and settings e.g. items added to shopping cart, username, password, language, etc.
  • First-party cookies are stored by the website the user is visiting directly. Website owners can use these to improve the user experience.
  • If customers have consented to first-party cookies, a company can capture information to feed into customer profiles stored in their CRM/CDP, etc.
  • Can include what marketing a customer has received and how they responded.
  • Can be used across all measurement approaches, and first-party relationships are supported across ad platforms.
  • Can be used to generate a universal ID, which can then be used for identification across the web for targeted ads and tracking.
Second-party data
  • Second-party data is another company’s first-party data.
  • Collected with consent, it can be utilised by another company based on a specific agreement.
  • Second-party cookies contain the same information as first-party cookies.
  • Second-party data is shared between companies via a data partnership or agreement and used by the secondary website.
  • Companies with an audience overlap can work together (e.g. a travel agency and a hotel chain, or a car parts company and a car dealer) enabling insights to be gathered and shared on customers and prospects.
  • Combining data with another company can be challenging if the data is managed differently.
  • Supports profile development for targeting based on similar audiences.
  • Can be used to enhance existing data sources for ad delivery to relevant audiences, or used for targeting via the secondary partner’s platform. Performance can be tracked against this data.
  • Can be used in partnerships with other companies where they are providing access to their trusted first-party data and providing feedback on performance of campaigns across their platforms.
  • Can be used in approaches based on ID solutions, brand studies, panel-based, controlled testing and MMM modelling.
Third-party data
  • Can consist of rich demographic, geographic, behavioural and interest data.
  • Often collected by an entity that does not have a direct relationship to the consumer, such as a data broker or DMP.
  • Data is usually aggregated and from a variety of sources including websites, apps, surveys, and platforms that have obtained the rights to collect and sell user data.
  • Not limited to a company’s own customer base – can provide a broader view of the market and more information about a larger set of individuals and potential customers.
  • Quality and accuracy can be variable when based on a number of sources, and it may not be clear if consent has been obtained.
  • Third-party cookies are set by websites other than those the customer is currently visiting. The cookie is stored on a user’s computer and can later be accessed for cross-site tracking and retargeting.
  • Can be used to create audiences for other companies for ad targeting and measurement.
  • Can be purchased from a third-party but requires clear consent from the user – such as with purchasing panel data from a reputable provider.
  • Can provide insights on how a campaign has performed across a panel or survey or used to enhance first-party data.
  • Third-party cookies are blocked by some browsers preventing a full view of performance and accuracy will continue to diminish as access to them continues to decline.
  • Last-touch attribution can still be used as a means of measurement to indicate how a user arrived at a particular website.
  • ID solutions can be used as alternatives to track how campaigns have performed, where measurement is not linked to specific individuals. Other solutions (such as those being explored by Google) are designed to provide measurement insights not linked to specific individuals, where first-party data is not known.
  • Other solutions such as server-to-server tracking assigns a session ID which can be stored server-side until the conversion takes place. It does not rely on cookies and can be used for measurement.

 

When it comes to the use of cookies, a key distinction is that first-party cookies are created by the website that a user is browsing, and the user is able provide their consent to their data being collected. This means that first-party data is gathered directly from customers in a privacy-compliant way and is owned by the company that owns the website and sets the first-party cookie.

Benefits and uses of first-party data

A key benefit of a company using its own data sources is that it can provide a better understanding of customers’ behaviour. First-party data is considered to be more accurate than third-party data from external sources, since it has come directly from the user with their consent.

First-party data can be used as the foundation for customer profiles and enhanced with other forms of data to enrich and validate them.

First-party data may include the data that is housed within a company’s CRM system, i.e. customer account data, or data from owned media assets (such as a website or app) that reveals preferences, interests or behaviours. These rich customer profiles can then be used to create a single customer view, which then means individuals’ behaviour can be monitored across channels, and used to measure how campaigns have performed. This data can then also be used for modelling and to target lookalike audiences in order to reach unknown audiences and prospects.

“Our advice is to lean strongly into first-party data for day-to-day measurement and use secondary sources where necessary to add more detail, draw customer insights and develop testable hypothesis about marketing strategies.”

Gabriel Hughes, CEO and Founder, Metageni

Benefits

  • Reduces reliance on third-party data, which will not be as readily available with the decline in access to third-party cookies.
  • First-party data can be more reliable, as companies know how it has been collected and it comes directly from the customer, making it very valuable and considered higher quality.
  • Privacy compliant with consent obtained directly from the consumer.
  • Enables a company to track the results of their campaigns against individuals, not just at a campaign level, and assess which are the most effective.
  • Information which is based on a company’s own customers provides the potential for personalisation and relationship building.
  • Supports segmentation modelling of cohorts and lookalike audiences for future targeting.
  • Having access to a company’s own first-party data enables them to then use this to feed into their measurement and targeting approaches.

Having access to first-party data from a CRM system with which to both target customers, but also use for measurement purposes, was highlighted as a key benefit by Sebastian Cruz, Regional Digital Marketing and Media Director at Shiseido Asia Pacific.

“As a luxury skincare company we benefit from having robust CRM data coming in from our in-store points of sale, which customers are happy to consent to providing, along with data from our website. There is definitely a strong push across the company towards a first-party data mindset. Our CRM first-party data gives us a lot of insights already and is helping us to also understand longer-term metrics like lifetime value. If we want to understand retention and what’s driving it in terms of the source of recruitment from an attribution perspective, our CRM can help here.

“The power of our CRM data really comes about because of the complexity of our portfolio in terms of our brands and SKUs. We are able to mine data and insights by channel, product line, skew and see which tactic has worked. We can even tie a result back to the creative and product to see from an uplift perspective which specific parts of our portfolio are actually driving business.

“CRM data, though, is not the full picture, and it is limited from a brand perspective, so that is where some of our other methodologies like using our analytics, campaign and sales data along with statistical regression analysis and marketing mix modelling help in combination with this.”

Sebastian Cruz, Regional Digital Marketing and Media Director, Shiseido, Asia Pacific

Companies can also work with secondary partners to further optimise their first-party data sources. Integrating a company’s first-party data where consent has been given with an ad platform’s API enables marketers to understand how customers convert to a sale, without compromising their privacy. Platform data such as  Meta’s Conversions API (CAPI) can then be matched to actual sales data. Kasper Moll, Global Paid Social Manager at Pandora, shared the benefit they are seeing when speaking on a Meta panel.[4]

“Pandora sells around 280,000 items of jewellery per day, so it uses CAPI to ‘triangulate’ insights from multiple data points, as well as to optimise advertising campaigns. I want to have a good connection between real-life [sales] numbers and in-platform [conversion data]. If they are in sync, then I can trust [the performance of the ads] we buy on the platform. We can then use two approaches to personalisation.”

Challenges of first-party data

As companies work to build up their own sources of data, there are some challenges to be mindful of.

  • It takes time, resources and effort to generate and maintain first-party data. Users need to be encouraged to share their data.
  • It requires scale. There needs to be enough data held on a large enough portion of customers to effectively target and measure campaigns.
  • To optimise the data requires a single view of the customer, but siloed teams and a lack of the right technology to support this can be a roadblock.

“The challenge is both how we collect more first-party data, but then how we can use it to replace some of the third-party cookie data we would have had previously and get some scale to achieve the large reach we need to drive awareness. We are currently still identifying audiences that are similar cohorts and segments for targeting when using Google.

“It is also about trying to understand the value exchange to give consumers in order to get that first-party data to then be in a position to use it elsewhere and drive that effectiveness. When we’ve used a mixture of personalisation and first-party data, we see a 20% improvement in marketing effectiveness.”

James Sharman, Northern Europe Digital Acceleration Lead, Haleon

Enhancing data sources with zero-party data

Zero-party data is generated when people actively choose to share data with an organisation and directly provide the company with information, such as their customer preferences. This can be collected via customer profiles, preference centres, surveys, quizzes, competitions, polls or through loyalty programmes.

Businesses can then enhance their customer profiles with this data, which enables a company to learn more about the likes, dislikes, opinions and interests of their audiences. The customer motivation to share zero-party data is often a desire for greater personalisation or customisation, where the end user is able to explicitly state their own preferences and needs. This, in turn, gives companies more direct information about customer preferences.

Insights provided directly by a consumer can also be fed into measurement analysis tools. Steven Silvers, EVP of Global Creative and Media Solutions at Kantar, describes how the vast majority of the data that the company has is zero-party data: “At Kantar, we can use a variety of zero- and first-party data to run our media effectiveness analysis. It also means that the machine learning and AI products that we release are trained off very good clean data. It’s data that we know we have the rights to since the consumers have given it to us explicitly, and it’s data that other companies don’t have.”

As described in Table 1, a business can also enter into a partnership with another company to use its first-party data. This becomes second-party data for the business, but as it is the partner’s first-party data, it has been consented to by the customer.

Preparing for the ongoing decline of third-party cookies

For companies currently still relying on third-party cookies, carrying out an audit of their own practices to understand how data is being used and what data is available will help when exploring what alternative options would work best.

As access to third-party cookies continues to decline, there are a number of key strategies that marketers can adopt, which are covered in Econsultancy’s Data-Driven Marketing Best Practice Guide. A summary of these is provided below.

  • Audit processes: Conduct an audit of exactly how customer data is collected and utilised across the marketing team and wider organisation. It is also important to understand how privacy awareness can be incorporated into data systems, processes and technologies, and to conduct training on privacy-related policies and tactics.
  • Focus on first-party data acquisition and enrichment: Steps can now be taken to mitigate the loss of data from third-party cookies by proactively developing strategies to acquire more zero- and first-party data. This means identifying the best opportunities to collect data throughout the course of the customer journey and across channels, understanding the required value exchange needed and being creative in how this is presented to users.
  • Invest in CRM: The changing dynamics around cookies and first-party data will make it more imperative for businesses to utilise existing data assets as much as possible and focus their CRM strategies on driving loyalty and building relationships with their customers.
  • Improve technologies: There is a greater need for businesses to have their data and technology infrastructure such as customer data platforms set up well to derive true value from first-party data and for any tech stack to be flexible enough to work with multiple compliant IDs.
  • Adapt targeting: Certain forms of targeting (such as retargeting) will be affected more by the cookie changes, which potentially places greater emphasis on other forms of targeting such as contextual, geographic and those aimed at broader audience groups.

Econsultancy | Data-driven Marketing Best Practice Guide

  • In this privacy-first era, the foundations of marketing measurement have fundamentally shifted, leaving marketers with new solutions to understand and implement.
  • Marketers must ensure they understand the four different types of data – zero-party, first-party, second-party and third-party – and how they are collected and used in measurement.
  • With the decline of third-party cookies already underway, marketers must focus on acquiring zero- and first-party data, where the user has consented to its collection.
  • Carry out an audit of current practices to determine how data is being collected and if there is still a reliance on third-party cookies.
  • Establish methods for effectively leveraging first-party data which is more reliable and can help to create enhanced customer profiles.

This guide is based on primary research which involved exploring findings from two reports:

  • Econsultancy’s 2023 Future of Marketing report, which was based on a survey of 835 client, vendor and agency-side marketers. The survey was fielded to Econsultancy and Marketing Week’s audiences between 9 June and 3 July 2023.
  • The Language of Effectiveness 2023 report has been produced using responses to an online survey of 1,369 qualifying marketers conducted by Econsultancy’s sister brand Marketing Week between 27 March and 28 April 2023.

In-depth interviews were carried out with industry experts. Econsultancy would like to thank the following interviewees for their invaluable contribution of time and expertise to this guide:

  • Kumar Amrendra, Head of Digital Marketing, Sky UK Ltd
  • Amy Blasco, Partner, Enterprise Data, Experience and Marketing Lead, IBM
  • Laura Chaibi, Director, International Ad Marketing and Insights, Roku Inc
  • Sebastian Cruz, Regional Digital Marketing and Media Director, Shiseido, Asia Pacific
  • Gary Danks, General Manager, AIM, Kochava
  • Mauricio Ferreira, Marketing Effectiveness Lead, Confused.com
  • James Hurman, Founding Partner, Previously Unavailable
  • Gabriel Hughes, CEO and Founder, Metageni
  • Dr Grace Kite, Economist and Founder, Magic Numbers
  • Chloe Nicholls, Head of Ad Tech, IAB UK
  • Roxane Panopoulos, Group Manager, Regional Measurement & Insights – Netherlands and Nordics, Snap Inc
  • Marina Peluffo, Head of Business Intelligence, Prima (speaking as industry expert)
  • James Sharman, Northern Europe Digital Acceleration Lead, Haleon
  • Steven Silvers, EVP, Global Creative and Media Solutions, Kantar

Lynette Saunders is a Senior Analyst at Econsultancy, where
she works on delivering industry-leading research, briefings and
reports for the digital marketing industry and speaks at a number
of external conferences.

Lynette’s previous experience includes delivering web analytics, measurements and insights, as well as leading usability and
customer experience programmes focusing on improving the
overall online customer experience for Cancer Research UK
and the Royal Mail Group.