In recent years, third-party cookies were considered to be essential tools in the world of digital advertising. However, changing regulations and data privacy concerns mean modern businesses and media companies must embrace new approaches to succeed.
In this article, we’ll explore the ways in which first-party data can be used by media companies to leverage better results from targeted campaigns and advertisements in the post-cookie world, putting them on the path to success.
What Are Third-Party Cookies, And What Is Their Importance?
Third-party cookies are data files placed on websites using specific scripts or tags. They are called third-party cookies as they come from a different website to the site they appear on.
Users interact with third-party cookies more often than they realize, such as when they click on a social media link that directs them to a specific website. As they interact with these cookies, the data collected creates a user behavior profile based on their online habits and searches. The information gathered is then used by sites featuring the cookies to personalize their advertisements to the user.
When utilized correctly, this information can help increase revenue and drive sales by ensuring that ads target the appropriate audiences. It also means users are more likely to stumble across ads that are relevant to them.
Considering this, it’s hardly surprising that 81% of brands still rely on third-party data, given that it fueled many successful digital marketing campaigns in the past.
The Decline Of Third-Party Cookies
The process of using cookies to gather information about consumers’ behaviors has been around for decades – since their invention in 1992. However, increasing regulations relating to data privacy such as GDPR, mean that their use is becoming riskier day by day, leading to what many publications have described as “the slow death of third-party cookies.”
Furthermore, various studies have found that consumers do not think too favorably of cookies. For example, one study reported that “cookie notifications triggered strong feelings of anger and fear” among users, relating primarily to their online privacy.
As such, many browsers, including web giants including Google, are beginning to phase out support for third-party cookies, rendering many campaigns borne from this methodology fruitless. For example, Google plans to deprecate cookies entirely by the end of 2024.
The Rise Of First-Party Data
As cookie usage begins to decrease, many companies are learning how they can use first-party data to their advantage instead.
First-party data is split into two sub-sections:
- Customer Data. Information about customers, such as details expanding on a specific demographic.
- User data. Information gathered from user interactions (on websites or apps), such as browsing habits or content preferences.
First-party data is valuable when curating advertising campaigns because companies gather it based on how users interact with their online channels. It’s data that does not need to be purchased or exchanged with third parties.
How Media Companies Can Leverage First-Party Data
1. Subscription Models
As third-party cookies become a thing of the past, subscription models can allow media companies to gather data about their target audiences’ online behaviors, preferences, and interests. The information gathered through subscription models (such as mailing lists) can be used to create effective marketing campaigns. For example, this data can be used to:
- Curate personalized content that invites engagement from their target audience.
- Create a sense of exclusivity and belonging among subscribers, encouraging repeat custom.
- Send out targeted advertisements alongside subscription services.
- Maintain high subscriptions by ensuring content is relevant, engaging, and customized.
Many media companies and digital publishers use subscription models to gather first-party data. Forbes for example, offers fewer ads, member-exclusive perks, premium video content, and more to entice users into subscribing.
2. Private Marketplaces: Maximizing First-Party Data Value
Another way in which first-party data can be used to make up for the loss of third-party cookies is in the creation of private marketplaces. For those unfamiliar, private marketplaces, or PMPs, are digital marketplaces where specific, trusted bidders can gain access to advertising opportunities. As they run on an invite-only basis, media companies can ensure they only sell ad space to reputable, trusted brands.
Through utilizing private marketplaces, media companies can:
- Target high-value audiences. For example, they can ensure personalized messages reach target audiences directly instead of being sent out randomly.
- Manage a transparent ad inventory. Media companies can use PMPs to create a premium ad inventory, so they can increase the amount of money they ask for when selling ad space.
- Embrace audience segmentation through ads. PMPs can also allow advertisers to target specific audiences based on demographics, behaviors, preferences, and location. This ensures ads are as effective as possible and bring a good ROI.
3. Personalization: Enhancing User Experience With First-Party Data
First-Party data can also help media companies enhance the user experience through personalization. This way, they can ensure that users are served up relevant content that they will not only find interesting but are more likely to interact with. This benefits both parties- for users, it’s easier to find what they are looking for, while advertisers can improve customer attrition and retention rates, facilitating business growth. For example, an IBM report found that “companies with a clearly-defined marketing-led personalization function were 38% more likely to earn 400% ROI or more than their counterparts.”
Enhancing the user experience through the curation of personalized content can:
- Help media companies and advertisers better understand their audiences or target demographic.
- Allow media companies to curate relevant content across multiple channels (social media, digital ads, mobile apps), ensuring customer interest is maintained throughout.
- Deliver personalized ads that bring a better ROI than general advertisements for a broader audience.
- Strengthen the relationship shared between brands and their audiences by fostering a sense of unity and community through personalized content, such as Birthday discounts or coupons for products they’re likely to want to buy.
In short, media companies do not need to worry too much about the loss of third-party cookies. While they were a great way to tap into the mindset of consumers, first-party data provides a similar level of insight and is generally preferred by consumers.
When utilized correctly, media companies can use first-party data to curate authentic, personalized experiences for their audiences, whether they’re interacting with a website, app, or social media page. This, in turn, will drive both engagement and sales, helping businesses succeed without a single third-party cookie in sight.