Why is the cookie issue relevant?
Data backs this up. A recent study analyzed which browsers customers use to access the company website and which browsers support third-party cookies. Third-party cookies were already limited in 61% of the sessions.
In these sessions, it is not possible to re-identify customers via third-party cookies because the browsers no longer support this. Instead, all these visitors are treated as anonymous — as if they were seeing the website for the first time.
The resulting unclear picture increases the risk of making the wrong marketing decisions. Companies that have relied on third-party data for customer personalization need to take action now.
Sidebar: Zero, first, second and third-party data — what is what?
Let's go through a quick overview of the individual data sources:
- Zero-party data is provided by customers themselves (for example, in surveys).
- First-party data is data collected in direct interaction with customers.
- Second-party data comes from outside sources (for example, partner companies with whom customers interact).
- Third-party data is aggregated across user behavior on the internet. This type of data is behind those "creepy moments" — when users are served suitable advertising after an offline encounter. This data will soon no longer exist.
Why are third-party cookies being abolished?
There are three central reasons for discontinuing cookies. Firstly, data leaks — such as the scandal surrounding Facebook and Cambridge Analytica in 2016 — have increasingly highlighted the problem of third-party cookies in recent years. Beyond that, regulations including the General Data Protection Regulation (GDPR, 2018) and the California Consumer Privacy Act (CCPA, 2020) are tightening up the handling of data. Finally, more and more privacy functions from different market participants are making overarching tracking more difficult.
What are the approaches?
In the near future, companies will need alternatives for third-party-cookie-based communication. We see two approaches to this: the third-party ID solution and the combination of first-party data and IDs in a Customer Data Platform (CDP).
The CDP approach empowers your company to take ownership of the data and process your data yourself.
Where does the need for CDPs come from?
CDPs are powerful tools. First and foremost, they help you:
- master web tracking,
- extend the CRM system,
- create seamless customer journeys,
- overcome data silos and
- store and use customer data in compliance with the GDPR.
Nevertheless, this tool has not yet reached all companies. A customer management study conducted by the Zurich University of Applied Sciences in 2022 found that 56% of respondents had not yet heard of CDPs. That said, around 53% of companies believe that they will need a CDP in the future.
The CDP as an alternative for third-party cookies
Many of the processes that third-party clients have previously handled can be handled internally with a CDP. As a cookie-reading solution, the platform supports micro-opportunities in the customer journey and fully customizable customer data models along with predictions and clean consent management in real time.
Companies can use a CDP to engage customers on all channels, inspire them with good content and guide them to purchase with the right search results and product recommendations.
What are the benefits of a CDP-based zero-party data strategy?
A personalization strategy based on zero-party data improves the customer experience through more relevant content while increasing customer trust. Using two customer examples, Manuel Tonez showed how companies with a zero-party data strategy received 75% more relevant data and achieved a 53% email open rate.
When services are relevant and customers see value in them, they are more likely to interact and share their data.
A CDP is an important building block in the future of personalization and the omnichannel experience. To realize the benefits, companies should integrate their zero-party data into their personalization strategy and align it with their data, content and marketing strategy, then clearly communicate the additional benefits to customers.
8 steps to a successful CDP implementation
What are the steps to implementing a CDP correctly?
- Business first: A zero-party data strategy is first and foremost a business issue. It's about building trust and nurturing customer relationships.
- Use cases: Think in terms of use cases. A business assessment is useful for prioritizing use cases.
- Data assessment: Analyze the quantity, quality and granularity of the data and prioritize it according to its business value.
- Data roadmap: The data roadmap specifies how and when specific data is to be connected.
- Consent and permission: To comply with the GDPR, the CDP manages all consents across all devices, browsers and platforms in real time.
- Connectivity: The CDP is seamlessly integrated into the existing stack as a data engine.
- Audiences: After integration, audiences are connected and selected.
- Test - learn - optimize: Not everything has to be perfect to get started. Start with a simple use case and test, learn and optimize step by step along the way.