The Death of the Third-Party Cookie and What it Means for Luxury Brands
Google is phasing out third-party cookies in its Chrome browser and related products by Q3/Q4 2024. This change is going to force luxury and other brands, reliant on third-party cookie-based advertising in recent years, to reach their audiences in a different way.
In this article, we’ll look at how the phasing out of third-party data will affect luxury brands’ marketing playbooks. We’ll also cover:
- What third-party cookies are
- Why third-party cookie-enabled cross-site tracking is controversial
- When cookies will be phased out
- Switching away from third-party cookies
- Driving sales using first-, second- and zero-party cookies
- Approaches you can take with your first-, second- and zero-party data
What are third-party cookies?
As Matt Russell, Digital Strategy Director at VERB, defines it: “Cookies are small pieces of data that are used to identify your computer as you use a computer network. Specific cookies known as HTTP cookies are used to identify specific users and improve your web browsing experience”.
In the broadest terms, a third-party cookie is a tracking code on a website that reports back to a business that is not the owner of that website.
An example of a third-party cookie is the Facebook Pixel. If you have a Pixel installed on your site, Facebook will know when someone visits your site. This allows you to insert ads into those visitors’ newsfeeds encouraging them to come back to your site. It’s why it can feel like a company is following you around on the internet sometimes.
If someone visits your site, they do so for a reason. By being able to remind someone of your website’s existence, you may be better able to reengage them to purchase from you. Depending on the complexity of the cookie set-up on your site, you may be able to show them in their newsfeed adverts the products they viewed when they were last at your site.
Also known as remarketing, and it’s remarkably effective. They increase brand searches, reduce click-through costs and have higher conversion rates. Unfortunately, however, the era of the Facebook Pixel, the Google Track Pixel and other highly-useful third-party identifiers is coming to a close.
Why are third-party cookies so controversial?
Third-party cookies are controversial for a variety of reasons. However, similar to GDPR, most of the pushback seems to be coming from regulators and not consumers.
Despite poll after poll showing apparent consumer disdain for what third-party cookies allow, the fact that so many respond positively to them by clicking through and making a purchase suggests that any opposition is actually quite shallow.
It is fair to say though there is a lingering and persistent concern that their use feels invasive and they’re not transparent enough for consumers to be able to control.
Ultimately, Google’s decision was also a commercial decision, albeit hurried along by pressure from legislators. Apple, their major browser competitor, has already increasingly blocked third-party cookies for a number of years with each new release.
What is the timeline for the phase-out?
Google has outlined a detailed plan to phase out third-party cookies.
The company had originally targeted completion by late 2023, aiming for full deprecation of third-party cookies by the second half of 2024.
To prepare companies and agencies for the change, Google entered into discussions with major clients on how to implement the change. They’ve been field testing different iterations of the changes on a sample of 1% of Chrome users during this time.
The target date for full implementation for 100% of users is the second half of 2024 however this is subject to Google resolving any remaining competition concerns brought to them by the UK’s Competition and Markets Authority (CMA).
Switching away from third-party cookies
With the door to third-party cookie use quickly closing, there are three other types of cookies that luxury brands and internet businesses can start using or use more.
They are, as we covered in a previous article, on how luxury brands should be preparing for a cookie-less future:
- First-party cookies: These are your cookies containing the information you store about the visitors to your website. They allow you to improve user experience as they remember information like shopping cart contents, login details and user preferences. For example, a luxury fashion retailer uses first-party cookies to remember a customer’s size preferences and past purchases to recommend similar items during their next visit.
- Second-party cookies: These are cookies which you share via direct partnerships or agreements with other companies. Their main use is to help businesses enrich the quality of their consumer behaviour data across different platforms. An example of this might be an airline sharing its first-party cookie data with a hotel chain to offer personalised travel packages to mutual customers
- Zero-party cookies: This has been included for completeness but they’re not cookies in the sense of the other cookies we’ve mentioned. Zero-party cookies refer to the information your consumers share with you like their personal data, purchasing intentions, website preferences and so on on your, for example, CRM software. An example might be a bespoke furniture site that allows customers to specify their furniture needs and styles through a survey, using this data in the CRM and on their website to create more personalised email campaign content.
Driving sales using first-, second- and zero-party cookies
As our marketing team recently wrote in another blog on the sunsetting of cookies, the new situation forces brands and their marketing agencies to ask themselves these real questions:
- Does our brand mission align with the content we’re putting out there?
- Are our systems set up to provide consumers with the best user experience possible?
- What do our customers really want?
- And one of the most important ones, are we truly connecting with our audience and speaking to them directly?
Third-party cookies were a gift to marketers for two decades, giving us just enough intelligence to connect with sufficiently interested audiences that we could sell products and services too and make a clear profit after advertising costs.
Doing this successfully required us to have a good working knowledge of who our target audiences were and what they wanted – that’s for certain – however, it didn’t require intimate knowledge.
The good news is that thanks to the information we hold on our customers already (our zero-party data), we can start analysing it to build up the depth of our knowledge. We can combine this with first- and second-party data so we gain the widest and most meaningful understanding of our audiences and what they want.
So, as inconvenient as this change is, there is an opportunity here.
This is a chance to build deeper and more transparent relationships with customers, ultimately rooted in a genuine understanding of their needs and a respect for their privacy.
Understanding where you are right now with your data
Brands should first consider what first-, second- and zero-party data they have already.
It’s also a good idea to consider the touchpoints at which you already collect data – for example, in-store sales, social media engagement, website interactions and customer service contacts. By auditing where you collect consumer data, you see more clearly where gaps in your knowledge and in the buying journey might exist.
For many brands, there is an issue of siloing. Your marketing teams, sales teams and customer service teams are working from different versions of the truth – separate copies of your database that are not synched with each other.
A lack of consistency in the information each team works from can be particularly detrimental in the luxury sector where quality, bespoke and consistent customer experiences are highly valued.
Bringing the data sources together is an important step in delivering world-class engagement at all touchpoints.
Use the switch away from third-party data to create a central database that all teams can access via data management platforms, a CRM system and analytics tools.
The switch away from third-party cookies presents an opportunity to analyse what data you collect, how and where you collect it, how you analyse it and how you act on it. Over time, profiles on individual customers and their interactions will allow you to personalise in-store, website and email newsletter experiences. On a broader level, you’ll be able to more clearly identify the needs and wants of the separate tribes within your target audience and their specific shared needs and wants.
Bringing the data sources together is an important step in delivering world-class engagement at all touchpoints.
Strategic planning for the new age
Now you understand what data you have and you’ve begun to centralise its collection, storage and analysis, consider next fine-tuning your marketing goals.
Use the insights that your first-, second- and zero-party data have now begun to provide you with to set targets that align with your commercial goals and what customers expect from you.
With a significant proportion of luxury sales now moving online, this might mean improving the shopping experience on your website based on individual users’ behaviours and preferences. It may also allow you to create a more natural and flowing omnichannel experience through, for example, the use of loyalty cards. You can find new ways to bring the online experience in-store and the in-store experience online for a coherent and consistent experience.
Understanding the customer journey is important and having a single source of truth for all your teams allows for a much deeper and more comprehensive understanding.
You can identify the different types of journeys customers take from your high-value customers to your first-time customers, understanding the approaches you should take for each identified segment to cross-sell and up-sell at the point of purchase and beyond.
For social media or PPC marketing, the ability to track from the point of clickthrough to the point of sales will allow you to identify key audiences to target for certain types of products as well as the type and style of advertisement to maximise return on investment.
The richness of your customer data should provide other valuable insights too. AI and other analytical tools can now go beyond basic demographics to predict lifestyle preferences, purchase behaviours and values on your audience as a whole, the tribes contained within your audience right down to an individual level.
Becoming a data-driven brand
While the personality and the core qualities of a luxury goods manufacturer will always likely be human-driven, companies can create a data-driven mindset to maximise their return on the creativity, craftsmanship and heritage of their brands.
It’s the latest development of a collab that’s become very important to the sector in recent years – luxury marketing x data analytics.
Let’s consider a potential approach from a luxury furniture manufacturer. These suggestions were inspired by an article by award-winning furniture design studio, Studio Caramel.
For a hypothetical luxury furniture design manufacturer, let’s say that they have detected interest in the use of natural themes in furniture and wish to reflect that in their next range.
The use of this insight may flow across the business as follows:
- Design team: The design team notices a trend and a preference towards organic, nature-inspired designs from general research data. They can also see an apparent correlation in their own data which shows increased sales of products that are biophilic and made from eco-friendly materials. They select a theme – “Ocean Ripple” – for a stand-out, expressive dining table. They decide on an oak table with a natural finish that is reminiscent of the movement of ripples on the ocean surface. They also incorporate wave-like curves onto the edges and legs of the table to carry forward the nature-inspired theme.
- Manufacturing team: Having received the blueprints from the design team, the craftsmen collaborate with suppliers of wood from sustainable forests to secure the highest quality and more responsibly harvested oak. If necessary, the department also sources authentic hand-carving tools and upskills the team with training on traditional carving techniques designed to achieve the wave-like curves the design team has specified. There is a focus on eco-conscious production and waste minimisation during production, reinforcing the brand’s commitment to sustainability.
- Marketing: The marketing team begins their work upon receiving the design blueprints and the research from the design team. Their goal is to create a compelling story around the “Ocean Ripple” dining table. They aim to emphasise the serenity of being by the ocean and the meticulous craftsmanship in the marketing collateral. The goal is to create a narrative that resonates emotionally with customers and shows in the table the coming together of art, nature and sustainability.
- In-store: For in-store display, the marketing team creates a centrepiece display, highlighting the product by placing it next to other objects that invoke the nature-inspired and organic design of the “Ocean Ripple” dining table. Sales staff are thoroughly briefed on the table’s design concept, materials and creation process, enabling them to share its story and unique features with customers in a knowledgeable and engaging manner. If practical, the décor could be complemented with ambient sounds and imagery to enhance store visitors’ sensory exposure to the product, making their visit more memorable and reinforcing the luxury and sustainability ethos of the product.
- Online: The marketing team also optimises the company website to feature the “Ocean Ripple” dining table. They also create similar materials that resellers can use on their websites so that they have a degree of control over presentation and the narrative wherever customers can purchase the table from. Using high-quality imagery and interactive features, such as a 360-degree view and zoom-in capabilities, allows customers to appreciate the table’s craftsmanship and design details virtually. The product page tells the table’s story from the inspiration behind its design to the sustainable practices used in its creation. Altogether, customers are provided with a comprehensive online shopping experience that mirrors the brand’s in-store luxury feel.
Although a very specific example, the use of data by our hypothetical luxury furniture manufacturer shows how data-driven consumer insights can inform every aspect of an operation from the original design right through to the presentation of that product at different touchpoints to the consumer.
Approaches to take with your first-, second- and zero-party data
For many in marketing, there was no desire to change the status quo with regard to third-party data. However the world is shifting towards greater choice for consumers on how their data is used. So, where to start?
A company’s website is the cornerstone of any company’s marketing and branding activity. You can use it to gather valuable first-party data through tracking variables like user transactions, preferences and interactions (especially points during the journey where a sale is more likely to be lost).
This data enables companies to improve the customer’s online experience by creating content that reflects their personalities and resonates with their needs. It also allows you to offer personalised product recommendations when a customer is logged in. Every visit is a sales opportunity so why waste a visitor’s time showing them products they’re not interested in?
By integrating your website with your CRM, you can build up even more detailed individual and group profiles of customers by examining not just their purchases but their behaviours. This has the potential to improve online conversion rates as well as drive more sales from email marketing campaigns.
Collabs are an important feature of luxury branding and there’s no reason collabs should only be restricted to product collections. Consider forming alliances with brands that have your values and target the same market, albeit with different products and services. You and your partners will be able to exchange data with each other so you get an even more detailed picture of how customers behave and what captures their attention.
Last, zero-party data – the data you hold on your clients and prospects that no other company has access to. In there are the answers you need to interact with them better, engage with them more and find out their intentions, preferences and values individually, as part of a segmented tribe or as a whole. Use interactive tools like surveys and quizzes to collect more data. This will provide you with insights that no other brand has and enable the creation of hyper-personalised marketing campaigns.
Mapping a cookie-free future with Verb Brands
Luxury brands now have the chance to create stronger, more personal connections with their audience. They can do this through collecting and analysing first-, second- and zero-party data while showing respect for individual privacy.
This is a time of change and, over the past 10 years, Verb Brands has worked with luxury brands in the UK and around the world to help them reach and connect with their target audiences. We’re aware of what a significant change is that the deprecation of third-party cookies will have on many companies and, for our clients, we’ve already begun to prepare them for a cookie-free future.
We’d appreciate the chance to speak with you to find out about the first-, second- and zero-party data you have and how you can use it to unlock new sales revenues and brand-building opportunities. Please get in touch with us – we’d love to hear from you.