Google to kill third-party cookies: What can marketers do, and why should they bet on loyalty programs?

Market changes are unavoidable. We live in a rapidly evolving world where every year is somewhat transformative to the way we do business and proceed with our daily activities. That’s thanks to technological growth but also due to global events that shape consumer habits. Corporations react to the tendencies of their users and also try to influence their behaviors to achieve better results.

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Today we’re taking a closer look at one decision of a particular tech giant that’ll definitely redefine the way marketers run their campaigns. This decision will affect companies’ ability to acquire and keep customers. We’re talking about Google’s plan to block third-party cookies in the Chrome browser by the end of 2024. It’s a controversial plan that was delayed by the brand. Other browsers, like Safari and Firefox, already introduced different methods of tracking that consider users’ privacy. However, when Google joins them, it’ll be a game-changer. Let’s see what it means for companies and how they can benefit from it instead of fearing the consequences of yet another significant change in the digital realm.

Google kills third-party cookies: what’s up with that?

Before we dive deeper, we should explain what has happened and why. It all starts with one word: privacy. Internet users have become more and more aware of what happens with their data when they browse the web and use their favorite apps. To target ads even better, companies collect useful information about their audiences. However, many customers have second thoughts when it comes to sharing their personal data with companies they interact with. People want to stay anonymous as much as possible because it ensures their safety. Who hasn’t heard about security breaches that resulted in massive data leaks? They can directly lead to identity and money thefts.

Although it’s not possible to entirely get rid of tracking, there are better and safer methods to do that. According to the Cookiebot CMP report, “The vast majority of the official government websites in the EU harbour data tracking third parties. Over half of the public health sites are unknowingly facilitating tracking.” This means that even pages we want to consider safe in terms of data privacy are actually not safe at all. Killing third-party cookies could be at least a partial remedy to this problem.

First-party vs. third-party cookies

How cookies work

Cookies are used to track user activity on a website and collect data for ad targeting. Since 2013, website owners have had to inform their audience about cookies and page visitors need to consent to their presence, usually by clicking the accept button. In 2018, after the new GDPR policy was introduced in the EU, research indicated that 76% of users ignored cookie consent banners on websites. They just clicked the button without even reading what they were agreeing to. Additionally, according to a New York Times article from January 2022, “In practice, the proliferation of cookie banners has both numbed people to their purpose and given companies yet another way to manipulate users. (...) Companies have turned cookie banners into a tool that does the opposite of what regulators intended.”

Knowing what cookies are responsible for is the first step to protecting one’s data in the digital realm. There are three types of cookies with different attributes. First-party cookies are installed on the website by its owner and their main duty is to remember the user’s data to provide a better experience after coming back to the website. For example, when you visit an online store, add products to the cart, and leave it to finish later, you won’t have to do the whole transaction from scratch when you come back. The website will remember what you did before, and you’ll be able to check out within minutes. It works similarly with language preferences as well as the username and password autofill.

Types of cookies

On the other hand, third-party cookies come from external sources that aren’t related to the brand you’re visiting online. Their main purpose is to deliver data on consumer behaviors to create target groups for particular advertisements. They’re used for retargeting, cross-site tracking, chatbots, social sharing, and serving ads adjusted to specific audiences. They’re considered invasive because they’re utilized to collect personal information about every possible aspect of the user’s life. That allows companies to create detailed profiles of their target audiences and show them ads according to their behaviors. Sometimes, these profiles are too detailed and contain private information, and that’s why the debate on third-party cookies goes on.

What does the lack of third-party cookies mean for marketers?

The main problem with the coming elimination of third-party cookies is the fact that marketers will have to pivot their approach to ads. According to HubSpot, their biggest worries include the inability to track the right audiences and higher costs of marketing as well as finding the right ways to reach out to new prospects. Being aware of these difficulties beforehand means that marketers can create completely new strategies focused on various activities without the need to collect data from third-party cookies.

The biggest highlight in this situation is that Google and other companies won’t stop the entire tracking process for good. First-party cookies are here to stay, and there are many alternative methods to collect relevant data, including Google’s Privacy Sandbox. It’s a set of tools based on API that’ll enable marketers to source some information about their prospects. There are other ideas on how to create successful ads, too. One of them is based on zero-party data.

Is zero-party data the future of online marketing__2

The term “zero-party data” refers to data that was handed over to the company by its owner. It means that users decide what information they want to disclose, and it’s a process they’re fully aware of, unlike clicking the button on a cookie consent banner that no one reads. This approach isn’t only great for acquiring data needed for effective advertising campaigns but also for creating a truly personalized user experience for each individual customer.

The whole concept is based on encouraging the client to share their preferences, shopping habits, and other useful insights about themselves. For example, when a person visits an eCommerce store to make a purchase, the company gets some data out of the transaction itself. However, they can propose additional activities to get even more information. Quizzes, surveys, and games are a great way to get to know the client better, and they’re voluntary, so the customer can still receive a complete, high-quality experience without them. Betting on zero-party data means you can build genuine, long-term relationships with your customers, become a reliable and trustworthy brand they come back to, and grow your revenue in the meantime. It can also be utilized in loyalty programs, which we think are another great fix for the problems caused by the demise of third-party cookies.

Why investing in loyalty should be a part of your strategy after third-party cookies are gone

Every company works with two types of clients. Those are new leads and long-term customers. Giving up one of these groups is not an option, but when it becomes hard to advertise to prospects, investing additional efforts into loyalty can do wonders. We believe that loyalty solutions will be in demand in 2023 and beyond because of the cookie-related changes Google has announced. Companies will want to nurture their existing relationships with customers to make sure they have a solid base of buyers always in place.

Loyalty programs for a high client retention _2

Loyalty programs are one of the most appreciated methods for high client retention. This excerpt from Open Loyalty’s article about zero-party data explains it perfectly:

Data-savvy consumers are beginning to understand that their data has value, and they expect to be compensated for it. This value exchange can be viewed as the basic transaction between a brand and customer. Data is shared with the expectation of a better experience. (...) Loyalty programs are one of the most effective means to collect zero-party data because they formalize this value exchange. Members sign up to a brand’s loyalty program with the expectation they will access value. Brands provide this value, through rewards or other benefits, to stimulate desirable behaviors as a means to collect zero-party data.

Simply put, a loyalty program can be a tool for collecting data provided with the user's consent and returning the favor with the prizes a particular program promises.

How to approach loyalty the right way

First and foremost, gain a competitive advantage by introducing a loyalty program early. Third-party cookies in Chrome will be blocked in two years or so. Other browsers haven’t used them for a long time now. The best moment to implement a loyalty system and start to actively use it is as soon as possible. To do that, you need a reliable partner that’ll take care of technicalities and customize the platform to your business needs. This way, it can become a pillar of your marketing strategy.

Innovative, advanced loyalty solutions offer much more than collecting points that can be exchanged for material prizes or discount coupons. They should have numerous features dedicated to managing the loyalty program and be flexible enough to enable building loyalty structures that are attractive to a particular brand’s customers. For example, tier-based loyalty can be great if a company wants to offer more personalized rewards to the most loyal customers.

We should also underline how important the technical side of your loyalty solution is. Customers are not fond of plastic cards they need to show every time they make a purchase. They want an omnichannel experience so that using your loyalty program is seamless. A mobile app and automated loyalty reminders in the online store are a must. The whole loyalty process should also be integrated with your digital presence and branded with your company’s colors and images to help the customer identify it at a glance. To achieve all that, you need a platform that’ll offer the required features along with the possibility to be customized down to the smallest detail. That’s where Open Loyalty comes in handy.

Open Loyalty and Divante: your new loyalty partners

Divante is Open Loyalty’s place of birth. We created this modern loyalty system based on our expertise and years of work with eCommerce clients. Our team knows their needs and pains in every area of business. That’s why we had the idea to create a flexible, headless loyalty platform that could be adjusted to any brand’s requirements. The goal was to make the loyalty program robust, accessible, and scalable. Open Loyalty can be easily connected with your internal tech stack because it’s based on an API-first approach. On top of that, thanks to being a premade solution, it significantly lowers the cost of implementation and shortens the time to market.

What’s the role of Divante in all of this? We act as a business consultant and a customization partner. The fact that Open Loyalty is made out of composable blocks that can be arranged into a solid loyalty system doesn’t mean it’s easy to do it right by yourself. To achieve the full potential of our solution and have it fit into your organization’s environment, you need a team of professionals that’ll listen to your needs and shape the platform to have everything in place. With our team helping, you’ll be able to start offering loyalty programs quicker and their quality will be excellent.

If you’re worried about the upcoming changes and the blocking of third-party cookies, reach out to us. Let’s discuss how you can secure your company’s future by investing in customer loyalty. With Open Loyalty, you can expect positive results in that area of your business. Think outside the box and diversify the ways you acquire and keep customers. Divante is here to help you!

Published September 28, 2022