You may have heard that Google is phasing out third-party cookies in 2022, with the goal of protecting users who crave more privacy online. In a blog post explaining their thought process, Google points out that 81% of people feel that potential risks of their data being collected outweigh the benefits. Generated by another website, these types of cookies monitor your behavior and serve you ads of products you’ve previously viewed.
Google’s move is not exactly groundbreaking; Safari and Firefox phased out the use of third-party cookies years ago. But Google’s more significant market share will inevitably spell a devaluation of third-party data, or information collected by entities with no direct relationship with consumers. This kind of data is often bought and sold, heavily relied on by marketing pros to track website users across the internet.
So, what are companies to do? The death of third-party data doesn’t have to be a major setback. Decisionmakers need to change strategy to first-party data – data collected directly by them on their own platforms, like emails, phone numbers, geographic information and more.
The trust divide
Google phasing out third-party cookies is part of a much bigger conversation – a palpable divide between companies and consumers. We’ve all seen the movies and Netflix specials, heard stories of people’s information being used against them in frighteningly creative ways. Words like data breach, leak, phishing scam and even doxing (deliberately releasing personal information without consent) pop up in worrisome news headlines and stern warnings from IT departments.
We are afraid of businesses getting ahold of our personal data. The statistics echo these concerns: Only 10% of people say they trust CPG companies to protect the privacy of their data.
And yet, people’s hunger for personalized customer experiences – only made possible by insights into their data – keeps growing. As the metaverse is spreading into every facet of how we shop, learn and play, its impact is only just beginning to be felt.
Building personalized experiences takes personal data
Consumers want personalized experiences. They want to be recognized when they re-visit a store, for a feeling of continuity as they browse items online or their shopping apps. The conundrum is that they don’t trust vendors with their data. However, research is showing when personal data is collected ethically and vendors are transparent about how they use it, consumers are more willing to share.
Merkle found that 86% of consumers were willing to trade their information to receive personalized offers based on their interests, browsing or purchase history. To put it plainly, people will give up data if they get value in return.
To mitigate consumers fears and meet their desire to be recognized by and interacted with their favorite brands, companies who want to succeed must create strong relationships with customers, based on consent.
Opportunities for brands to build loyalty
Businesses don’t get credit for adhering to data privacy laws; they need to provide extra value. Brand owners have a great opportunity to build on their already-existing customer loyalty. If they can show their consumer base that they are collecting and using their personal data responsibly and ethically, the positive sentiment can go a long way.
Think of a major beverage producer, as an example: by refraining from using third-party data and only using first-party data, the brand can gain more of their customers’ trust and hence a bigger share-of-wallet. The deal-breaker is whether a company can manage the collection and use of customer data in a transparent way.
Trustworthy, clean data is key
Companies can use data transparency to build a data trust strategy. The data governance capabilities inherent in master data management (MDM) can account for how the data is collected, stored and used, who is accountable for it and meta data such as what the individual has consented to.
Imagine a scenario where a customer wants her name updated in a company’s system. The company might make the requested update in the CRM but fail to recognize that she is in the ERP under a slightly different name, perhaps using her middle initial. MDM prevents that oversight by providing a trusted, 360-degree view of the customer, allowing the company to fully carry out her wishes for her personal data.
Learn the customer
Accuracy is just as important as understanding who your customers are, within the context of their lives. What do they do for work? What their neighborhood like? What is their age, income bracket, favorite sports team? Using first party data – and managing it with MDM – creates a 360-degree view of the customer and doesn’t require a cookie trail. For a personalized – or even hyper personalized shopping experience, it’s essential to learn how customers are connected to other people, places and things for true context.
Even as the trust divide makes people doubt where their data is going or how it’s being used, we still want the superior customer experiences we’ve come to expect. And yes – if consumers believe they will get better service, experience and value from sharing their personal information, then they are often willing to do so.