The next big shift for privacy and data: How will the cookie crumble?

On the third anniversary of GDPR, Alex Steer, global chief data officer at Wunderman Thompson discusses this inflection point for digital marketing

Now three years old, GDPR has become a huge feature in all our lives. It’s not just some legal technicality but reflects real concern from people about how brands use their data.

Since May 2018, conversations around data protection and privacy have continued to gain considerable momentum with Google Chrome, the most popular web browser in the world, announcing the retirement of third-party cookies from early 2022.

This represents the single biggest change to advertising practices for decades and brands will need to rise to the challenge to show they are responsible custodians of customer data.

Privacy is a fundamental issue that affects how brands operate, so as we move ahead, marketers should focus on building direct relationships with their customers while striving to provide the privacy and personalisation necessary for ethical and effective digital marketing.

Third-party cookies have become a critical part of how online advertising works, and the forthcoming changes are sending brands, marketers and advertisers scrambling to try to shape a better future. They will need to re-evaluate how they target and gain the trust of consumers online in the long-term, ahead of a cookie-less future.

The nub of the problem

The real issue is not just how much data is being collected, but how it is being shared and how it is being used.

Data is not just used to remember the preferences of individuals but to re-sell those individuals as audiences to others. It is far from clear that people always understand that they are signing up to have their personal data re-sold and re-combined to third parties with whom they have no direct relationship.

Nor is personal data a purely personal matter. Data collected about one person is used to make predictions about other people. So it is perfectly possible for an individual to be targeted – or excluded – based on assumptions made about them by a data company they have never heard of, according to how much their profile resembles the profiles of others.

What some would call clever data science, others would call discrimination. While businesses will always have to decide which customers they think are worth investing marketing budgets in to reach, it’s reasonable for those customers to ask what data was used to make that decision and who made it. When even the marketers don’t have visibility of those decisions, we have a problem.

Therefore consumers, regulators and other technology platforms have become concerned about the pervasive and potentially abusive nature of data collection, and as a result, the cookie itself is being forced to retire.

Without readily available third-party data – leading brands are deliberately shifting away from reliance on renting third-party data from others – the focus for brands needs to be on building genuine relationships with customers to responsibly leverage first-party data.

First-party data and the value exchange

For many brands, building first-party relationships will mean rethinking how they interact with customers. Relevant and contextual online content and the promise of better services and products provide a genuine value exchange for which consumers are happy to part with a reasonable amount of personal data.

A Wunderman Thompson survey conducted in July 2020 revealed that 35% of UK consumers are willing to give more of their personal data to brands if it improves the online experience and 42% said that the provision of personalised content was a valuable use of their data.

But brands need to provide a real reason to disclose information, selling to customers directly, or creating new sources of value for which data will be shared. It requires clarity of vision and strategic honesty about what customers want and the role brands can play in people’s lives.

The implications for marketers

Marketers now need to be more relevant to incite change and influence behaviour by engaging openly and honestly with their audiences.

As they begin to think about what the future of cookie-less tracking looks like, they should be considering the ethics of data technology and questioning the need for a massive data ecosystem.

The emphasis should be on having the right data, not all the data. Quality not quantity.  It’s time for brands to be more thoughtful and precise and to stop playing along with the ad tech pretence that is tracking a single cookie ID with a single browser across the web.

An inflection point for digital marketing

This is a time for the industry to stop and reflect on what got us here, what it means and how we can shape a better future.

A new wealth of more direct data will serve several other useful purposes as well. It will provide better customer insights and make ads better targeted and more effective. It will aid in customer relations, market research, product ideation and potentially provide higher lifetime value.

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This isn’t entirely about ad tech but about customer expectations. Ad tech has spent far too many years hooked on third-party tracking: creating more sophisticated ways of following people around the web, trading personal data billions of times a day, and leading to worse online experiences, rampant ad-blocking and genuine consumer concern.

This inflection point provides brands with the opportunity to step-up, focus on what privacy really means and change the way that they operate and communicate around it.

Advice for brands in the coming weeks

Brands should not get distracted by the third-party ad tech panic of the next few months. Instead, they should focus on building their first-party relationships with customers.

However, they should know that the cost of entry is a sincere commitment to being ethical, compliant, privacy-focused users of data. And they should make this clear to customers as part of their value proposition.

Google isn’t acting as an ad tech baron. It’s acting as a brand, though not without commercial advantage. Today, brands exist to create value for the organisations that own them, and they need to be managed to increase that value.

This is a strong act of strategic brand management. But the reason Google will profit isn’t just because it’s disallowing third-party tracking; it’s because it will create reasons to drive first-part interactions with billions of people. Like other leading brands, it creates value for which people are willing to share information.

For those brands, the response to a cookie-less world without third-party tracking won’t be a laundry list of short-term technical workarounds—it’ll be a smarter analytical approach and a better, more direct relationship with customers.

Ambitious brands that take a stand on the side of their customers will inspire confidence that drives growth now and in the future.

So how will the cookie crumble, and who is going to pick up the pieces?

Those brand marketers with an optimistic, ethical and customer-driven mindset will see it as the opportunity it is – and take full advantage as a result.