As Third-Party Cookies Crumble, CDPs Reveal the Future of Marketing

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With third-party cookies dying, digitally-enabled businesses are asking themselves, “what now?” Hint: Customer Data Platforms (CDPs) may be the answer.

Many companies are still struggling to find a winning formula in their marketing and sales strategy, even with significant amounts of data and cutting-edge tools at their fingertips. The uptick in the adaption of marquee technologies, such as AI, ML, and NLP, belies the barriers to their successful implementation within a given organization.

The apparent paradox is explained by how some companies approach data collection, organization, and analysis.

Executives widely accept that data is the key to better marketing, customer engagement, and sales. For marketing professionals tasked with delivering increasingly real-time, personalized, and dynamic customer experiences, developing a deep understanding of their customers is critical. Knowledge is still power, and data now sits at the heart of the marketing ecosystem.

However, data can only strengthen customer insight and enable marketing precision when harnessed effectively. The ever-increasing speed, volume, source, and variety of the data that a company must capture, process, and analyze creates a challenge that often does not get the attention it deserves: known as data waste.

Data insights have a very short shelf-life. I have lost count how many insights and recommendations I passed to clients, only to have the information fall into a folder on a hard drive never to be looked at again. How can organizations still glean value from “old” customer data instead of writing it off in the pursuit of the next new tool or strategy or behavioral analysis? How can companies combine the new data with the old to create a complete customer profile while still keeping up with data privacy and data management legislative changes?

In other words, most businesses today don’t have a big data problem; they have a smart data problem. Marketers need a system that makes their customer data more accessible, actionable, and connected across channels. Plus, they must do so while maintaining a high level of data security and privacy.

The Demise of the Cookie

For years, marketers have been using cookies stored within a visitor’s browser to track the visitor behavior activity, improve the user experience, and collect metadata that powers the marketer’s powerful Martech tools. These marketing tools enable digital personalization and the secret sauce behind audiences having the right ads presented at the right time, on the right device through the right channel.

However, by adding tags to a page, businesses also can track user behavior across the web as the users visit unaffiliated digital properties. This additional tracking level enables a company’s Martech tools to create a customer profile based on digital activity and search habits. The data can then used for ad re-targeting, look-a-like audience creation, and behavior-based advertising common on Adtech platforms like Google Ads, Facebook Ads managers, among others.

Powering the Adtech suite are third-party cookies. These cookies have been under fire over the past few years as users, and legislative bodies place more value on data privacy. Today, users demand more transparency, choice, and control over what data a particular entity can or cannot collect. At issue is that businesses often enable many third-party cookies in a way that the user is entirely unaware.

Users now routinely use multiple connected devices: smartphones, tablets, desktops, laptops, and even game consoles, to surf the web. Most third-party cookie functionality is limited and restricts the cookie strategy profiling abilities beyond the original device. Because of the challenges the cookie faces, they are becoming a thing of the past. When Apple rolled out its iOS 14 operating system update, the company included additional restrictions on third-party apps that further limit marketers’ ability to track and monitor a specific user’s device and web-behavior. Google recently announced it would phase out third-party cookies on Chrome browsers by 2022.

Enter the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

Now businesses and their marketing teams must change how they collect, organize and analyze their customer data in a way that reflects current user trends and technologies and the changing regulatory environment.

Limited by Their Legacy Systems

Some marketing teams continue to be held back by their company’s legacy data platforms. Many F500 companies I have worked with over the last five years consist of the usual patch-work of add-ons and tools that often do not play nice together and generally do not provide marketers with the level of control, flexibility, speed, insight, and connectivity they need to manage their organizations digital business Transformation.

To succeed in today’s connected, fast-paced world, businesses and their marketing and advertising teams need a modern customer data platforms that offers:

  • A unified, comprehensive view of a customer profile that records customer history and interaction data across all available channels
  • Including known & earned PII and, most importantly, anonymous visitor attributes
  • An easy-to-use interface designed specifically for marketers
  • Smooth, real-time integration with other marketing tools and systems
  • Smart analysis and decision-ing capabilities

The Rise of CDP

Enter Customer Data Platforms. CDP’s work to create unified and continually updated profiles of both known and anonymous visitors. CDP’s process historical and real-time visitor data from multiple channels. Examples of the data types and sources a CDP will work with include:

  • User activity
  • Actions taken on a website or in a mobile app
  • Clicks on a social advertisement
  • Clicks on a banner
  • Transactional data, including purchase history.
  • Customer profile attributes, such as age, gender, birthday, date of first purchase, and other segmentation data
  • Customer communication
  • Communication with customer service
  • Social media activity directed at company accounts
  • Interactions with hosted chatbots

Then the magic of CDP happens, algorithms get to work cleansing and matching the data. The CDP organizes and filters data that is then enriched with the existing profiles or builds new profiles. All this work goes on to create a single, unified view of the visitor. This structured data is then automatically made available to relevant teams within the organization to enhance marketing, sales, customer service, and even strategic decisions, and in many cases without the aid of the cookie.

What are the Biggest Benefits of CDPs?

Even though much of the technology that powers CDP’s has been around for a few years, one of the most significant benefits to these dynamic platforms is that they represent a new marketing and customer-centric approach.

The demise of third-party cookie means that businesses and their marketing teams now need to do more to earn the data that they capture from their audience. Gaining user consent requires relevant content, engaging experiences, reasons to return, value-driven CTAs, and advertising that is more on target, personalized, and valuable to current and potential customers. A typical use case for CDPs enables campaigns designed for marketing and sales initiatives to meet customers in the buyer’s journey at the most opportune time, on the device with the best chance of a conversion with the most engaging relevant creative and copy.

This process is more work for the business; however, it is necessary to consider customer data is no longer viewed as a commodity but as a valuable and unique asset that must be earned and protected; it shifts the advantage of the business-customer dynamic to the side of the customer.

Although there are two sides to this equation, and the business side wins as well. With CDPs, marketing teams have access to a powerful interface for advanced segmentation that can produce better-customized recommendations and lead to optimized customer experiences. CDP’s can bring about actionable insights from a unified customer profile and use this knowledge to guide marketing decisions. Best of all, this process happens automatically, in real-time, across all of a company’s channels.

Such information aggregated among a market segment can reveal lucrative opportunities for future products and services, enhanced value propositions, and ultimately market growth.

CDPs do not replace existing data systems; instead, their role is to enhance current tools capabilities, mitigate risk from the demise of the cookie, and power marketers with near real-time best-in-class audience curation for journey orchestration. CDP’s stitch together existing customer data, anonymous floating attributes, and digital behavior across channels, devices, and tools. CDP solutions are rolling out from most digital solution providers, including Tealium, Segment, and Adobe Experience Platform.

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