The demise of third-party cookies has been the talk of the marketing industry for years now – with Google, which plans to disable third-party tracking cookies for an initial 1% of Chrome users in early 2024, the last major browser to eliminate them. But Google’s repeated delaying of its own deadline may have given marketers a false sense of security.
Findings from Econsultancy’s newly-published Future of Marketing 2023 report, which surveyed more than 800 marketing professionals to determine the trends shaping the industry, show that just 8% of marketers say they are “Fully prepared” for the forthcoming cookie crackdown, with a further 22% declaring that they are “Mostly prepared”.
The industry has undergone some shifts away from its reliance on third-party cookies for measurement and tracking, but are they enough? Here’s what the Future of Marketing report reveals about industry views and developments on the eve of the ‘cookiepocalypse’.
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“Every day it’s becoming more difficult to track a user’s entire purchase journey…”
We’re used to discussing the demise of the third-party tracking cookie as an event still on the horizon, but in truth, many developments regarding privacy and tracking have already drastically altered the way that marketers can measure – such as Apple’s App Tracking Transparency (ATT).
“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,” said Brooke Osmundson, Director of Growth Marketing at Smith Micro Software, speaking to report author Rose Keen about current challenges.
Confirming this, just 29% of respondents agreed with the statement “My organisation has a robust measurement system in place for a post third-party cookie world” (Figure 1). If marketers don’t have a robust measurement system in place for a world without cookies, how well are they coping with the measurement challenges of the present?
Figure 1: Do you agree or disagree with the following statements? (agree only)
Source: Econsultancy’s Future of Marketing survey | Sample: 383
Osmundson described how the loss of insight is already affecting campaigns. “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,” she said. “We are going to be spending more time analysing data to help our clients and partners understand why we can’t fully track a user throughout their entire purchase journey, and further into retention.”
Despite uncertainty around which alternatives to third-party cookies will best enable marketers to measure and track in detail while still respecting users’ privacy, 71% of respondents agreed that “There are viable alternatives to third-party cookie-based tracking available”.
This suggests that the challenge for marketers around preparing for a world without third-party cookies isn’t due to a lack of workable alternatives – but perhaps that the shift to adopting those alternatives has been difficult, lengthy, or possibly begun later than it should have done.
Just under half (49%) of marketers said they offer a clear value exchange in return for customers sharing their data
Nelson Tsai, Digital Director at PHD Media (part of Omnicom Media Group), identified that, “One of the biggest challenges for marketers will be navigating the ever changing landscape of privacy regulations and data protections.” As a result of this changing landscape, “Brands will have to first focus on getting consent from their customers. Maximising the value from that approved first-party data is then going to be key.”
The Future of Marketing report confirms that adoption of first-party data as an alternative route to measuring digital marketing effectiveness is already widespread. More than two thirds – 65% – of respondents reported that they are currently using first-party data to measure digital marketing effectiveness, making it the most prevalent of the alternatives listed; an additional 19% are considering adopting it (Figure 2).
Zero-party data – a subset of first-party data that consumers share proactively rather than it being collected by the company – is also popular, in use by 40% of respondents with an additional 30% considering its adoption. Notably, zero-party data has risen in popularity since last year’s Future of Marketing report, where it was in use by 35%, placing sixth overall in the list of measurement alternatives in 2022 compared with its third place in 2023.
Data partnerships, or second-party data, have however fallen out of favour with just 28% using these in 2023 – compared with 37% in 2022.
Figure 2: What alternative forms of measuring digital marketing campaign effectiveness is your organisation already using, or considering adopting? Select all that apply
First-party data is being widely adopted by marketers as an alternative form of measuring digital marketing campaign effectiveness, with zero-party data close behind. (Source: Econsultancy’s Future of Marketing survey | Sample: 362)
The widespread adoption of first- and zero-party data is encouraging, as these data types have far fewer associated privacy issues and promise, in the words of Tsai, “enhanced customer relationships and more effective personalised marketing”.
However, despite marketers’ enthusiasm for adopting these customer data types, the report’s findings indicate that marketing has a value exchange problem. Just under half (49%) of marketers agreed with the statement, “My organisation offers a clear value exchange in return for customers sharing their data”.
Global Ecommerce Director at Hotelbeds Alun Williams observed that, “The industry has to better articulate what that value exchange is. If we can crack that, there’s a real opportunity to build richer and deeper audience relationships.”
When it comes to the transition away from third-party cookies, marketers have clearly identified alternatives that they see as viable and are exploring how to adopt them. The sticking point may be the consumer half of the equation: encouraging consumers to see data sharing as something that they can benefit from, and demonstrating how the data will be used to enhance their experience (such as through personalisation, exclusive offers or added convenience) and not for invasive or unwanted marketing.