Building real relationships in a post-cookie world

Why marketers are reluctant to accept the death of cookies—and how you can get ahead of the game

By Rick Ferguson

After slow-rolling marketers with details about the imminent crumbling of third-party cookies, our benevolent overlords at Google have finally announced more details about their plans to embrace the cookieless future. This time, the deadline for “cookie deprecation” is the second half of 2024. Exciting times! The countdown begins, and marketers must now prepare for a more privacy-conscious and transparent digital ecosystem.

The only problem: The solutions on the table to replace third-party cookies are rife with uncertainties, leaving many marketers reluctant to press ahead until the kinks are worked out. Unfortunately, facing the cookieless future is a lot like experiencing dental pain: If you try to deny that the problem exists, it’s only likely to get worse.

Fortunately, there is a way to move confidently into a cookieless world: Orient your digital marketing efforts to facilitate Real Relationships with your best customers. In an uncertain world, it’s one of the surest bets you can make.

It’s Google’s world (and Apple’s, and Meta’s) and we just live in it

The big news is that Google has finally shared more details about its Privacy Sandbox initiative and the company’s timeline for deprecating third-party cookies in Chrome. In the first quarter of 2024, Google plans to deprecate cookies for one percent of Chrome users, allowing developers to test cookieless products in real-world environments. Prior to that initiative, the company will enable developers to simulate deprecation for a configurable percentage of their users.

Although Google has been kicking the cookie can down the road for a while now, the company has at last made positive steps toward cementing the timeline. In fact, the current deadline for full deprecation of all third-party cookies in Chrome is set for the second half of 2024. Will this timeline serve as a catalyst for marketers to act?

Perhaps not. According to a recent survey of 400 marketers from Datonics, more than half of digital marketing campaigns still rely on data from third-party cookies. Behavioral data, interest intent, demographics—all this third-party data, snuffled up by marketers even as 69 percent of those surveyed profess “deep concern” about disruptions to their marketing stack. In the words of Jane’s Addiction (a 1990s band, Zoomers, look them up): “I’m gonna kick tomorrow!”

The main problem is that the proposed replacements for third-party cookies, while promising, each present their own set of challenges. For example:

Interest-Based Audience targeting: Google has placed a lot of scratch behind IBA and its Topics API, which will allow marketers to target digital ads to consumers based on a narrowly defined set of interest topics based on browser histories, and which are only stored in your cache for three weeks before they’re replaced by new ones. Google promises consumers “meaningful transparency and control” over this data, including the ability to turn it off completely. In recent tests of an IBA-focused approach, Google reported a decrease in ad spending by 2-7 percent over a cookie-based approach, with a 1-3 precent decrease in conversions per dollar and click-through rates remaining at 90 percent of status quo. Other APIs are undergoing similar tests.

Unified ID 2.0 (UID2): UID2 is an open-source framework created by the Trade Desk that allows publishers, advertisers, and digital advertising platforms to establish consumer identities without third-party cookies. Reading a technical explainer of the system made my brain hurt, but it essentially involves a web site visitor providing consent for targeted ads by logging in with an email address or phone number, which is then encrypted to create an identifier. Unfortunately for digital publishers, the onus will now be on them to explain why they need your email address and what you’ll get for it.

The problems with these potential solutions are obvious, which is why marketers continue to hug their cookies tightly until the kinks are worked out. IBA is essentially a less efficient form of third-party targeting with a shorter shelf life. If UID2 gains traction, consumers will soon be inundated with requests for their email address and phone number. I don’t know about yours, but my teenager—soon to be an adult consumer—doesn’t even have an email address and is likely to never have one unless it’s required by his employer. And before any of us give up our precious mobile numbers to anyone else, we’re going to need a clear sense of the value exchange.

Okay then, smart guy, what’s the answer?

Plenty of ink has been spilled describing the importance of zero- and first-party data in the post-cookie world. Loyalty marketers also know that bespoke loyalty programs and enterprise-wide customer loyalty initiatives are one of the most efficient methods of collecting such data. Every few years, a new survey comes along that reinforces this truth. The most recent comprehensive one, an April 2021 YouGov survey of 1,200 U.S. adult consumers, revealed that 88 percent of consumers surveyed were willing to share personal information if they saw value in the exchange, including 90 percent of respondents aged 18–29.

Those survey numbers outline a possible path forward for digital marketers. Customers are willing to log in, hand over an email or phone number, or agree to a digital identifier—but only if they clearly understand what’s in it for them. But how will you effectively communicate that value exchange?

The answer is to create a digital environment that facilitates real relationships with your customers—particularly those customers who demonstrate high current or potential value to your business. To facilitate those real relationships, orient your digital marketing around these fundamental drivers of customer loyalty:

Trust: Experiment with these new targeting tools to funnel customers into a digital environment in which they feel safe and are willing to be identified and tracked. Bespoke loyalty programs and customer loyalty initiatives are a great tool to provide that trusted environment, which in turn makes your customers more likely to provide actionable data.

Commitment: Your customers want to know that you’re committed to a long-term relationship with them. The most effective way to demonstrate that commitment is through persistent personalization—but what we’re really talking about is demonstrating relationship memory. Show your customers that you know and remember them by providing seamless experiences across devices and touchpoints, and by delivering tailored offers based on their purchase history. Brands are now using machine learning and artificial intelligence to put data to work and demonstrate this commitment. In the post-cookie world, it’ll be essential.

Reciprocity: In exchange for agreeing to be tracked and identified, customers expect rewards and recognition. The value exchange should be explicit and transparent, so both sides know exactly what they’re getting. By connecting your digital marketing efforts to your loyalty program or broader CRM efforts, you can fuel a virtuous cycle in which your most loyalty customers fuel your acquisition efforts through social media, product reviews, and personal recommendations.

Here’s an example of this philosophy at work. As Ragtrader reports, Australian fashion retailer Country Road increased its investment in digital acquisition efforts by 70 percent last year. Over two-thirds of first-time purchasers joined the brand’s loyalty program, which resulted in a 70 percent increase in reward program members. Then the brand shifted its marketing dollars nearly entirely into its reward program, eliminating all discounting events but its mid- and end-of-year sales—the only way to access special prices is to join the loyalty program. The result: Over 80 percent of Country Road’s revenue now comes from loyalty program members.

That’s how you connect digital acquisition to loyalty. If you can keep your eye on the prize, as Country Road has done, then navigating the post-cookie future will be a lot less confounding. One thing is certain: We all face a lot of testing and learning ahead. During this transition, collaboration across the programmatic supply chain will be crucial to fostering innovation and developing solutions to replace third-party cookies.

In the meantime, shift some of that ad spend to build sustainable relationships with your best customers. The cookie may crumble, but a valuable relationship can last a lifetime.