Opinion: The non-negotiable value of first party data in a post-cookie world

Dimpy Yadav, General Manager Xaxis India, shares her insights on the increasingly phasing out third-party cookie data, explaining how brands can build on first-party data, going forward.

By now, any marketer worth their salt (or should that be sugar?) knows about cookies and the complexities surrounding them. The use of customer data represented by the third-party cookie has come under fire from consumers, governments, the walled gardens, and device makers - radically altering digital targeting as we know it.

Google has announced its long-awaited plans to phase out cookies. Advertisers and marketers will soon find themselves needing to adapt to a new cookieless world by adopting first-party data. But first-party data has always been here, it just hasn’t had its time to shine. Until now.

Marketing in the absence of third-party data

Most of us can relate to feeling like we are being listened to by our devices, and may have seen instances of sneaker ads or dental services stalking us after searching for them on the web. These curated and targeted experiences stem from third-party cookies and third-party data. 

Third-party data is aggregated from many different sources, often collected by an entity that doesn’t have a direct relationship with consumers. You can see where issues might start to arise. Third-party data has been a staple for marketers who have traditionally been dependent on third-party cookie for targeted advertising. However, with Google phasing out third-party cookies, marketers and advertisers will no longer be able to collect and amalgamate those tiny bits of data without user consent. 

Browsers like Chrome and government regulations such as the General Data Protection Regulation (GDPR) are limiting their use, clearing the way for first-party data. As Google puts it, cookies are going to “degrade.” Google's privacy policy has yet to overtly say that it’s getting rid of third-party cookie entirely, but enforcement of privacy constraints on Google’s third-party cookies will likely become increasingly strict very soon. 

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This digital revolution has permeated India as well, with the country’s digital economy expected to reach a valuation of $1 trillion dollars by 2022. Recognizing its significance and its potential to bring large disruptions in almost all sectors of society, the Government of India has envisaged and encouraged the usage of first-party data through its Data Protection Bill (DPB).

While India's and the world’s transition to a mature digital economy is underway, the processing of personal data has already become omnipresent. While data can be put to beneficial use, the unregulated and arbitrary use of data, especially personal data, has raised concerns regarding the privacy and autonomy of an individual. 

This was also the subject matter of the landmark judgement of the Supreme Court, which recognized the right to privacy as a fundamental right. Instrumentally, first-party data is gaining consideration under India’s constitutional privacy protection.

Finding an alternative

One thing is very clear: marketers need to prepare for a cookieless future by creating a first-party data strategy that allows them to activate this data once the third-party cookie is officially phased out.

Unlike third-party data that is often available to many different companies, first-party data is unique to each business. It’s data that you own and collect with direct consent from consumers, through interactions on apps and websites and in response to marketing initiatives like email and loyalty programs. 

When used sensibly, first-party data helps brands build direct relationships with their customers, creating value and boosting their advertising performance. Digitally savvy customers expect brands to know who they are and want personalized services that consistently acknowledge their needs and preference without abusing their trust, violating their consent conditions, or compromising their personal data privacy.

Along with the imminent move away from a cookieless future, first-party data promotes the use of consensual data that provides the user with the free choice to give personal information while allowing them to receive content relevant to them. Those that invest in building their first-party-owned audiences and utilising the data acquired from them will have an insurmountable competitive advantage.

Where do we go from here?

The shift to first-party data might seem like a no-brainer, but in reality, the shift from third-party to first-party can present several unexpected challenges. While 87% of brands view first-party data as very important to digital marketing, only a few brands are actually effective at consolidating and de-siloing their data – with 56% of the APAC brands believing they are below average or average at using their first-party data.

And while the third-party cookie is on its way out, publishers will continue to sell ads on their own sites using their first-party data and, likewise, marketers and advertisers will still be able to use their first-party data to target ads on third-party sites. This opens the doors for marketers to go back to basics and focus on contextual and moment-based communication and conduct passion group targeting with context as a focal point.

Top-of-the-funnel performance optimization will form a key part of the cookieless future, with strategies geared towards creating better customer journeys, trust, and awareness.

The value of first-party data for marketers and advertisers is unquestionable. However, we must continue to put consumer privacy and data protection legislation first with data strategies that are both compliant and secure. 

The emergence of a third-party cookieless world presents an opportunity for brand marketers to truly own the consumer journey via meaningful and relevant communication strategies. To survive in a cookieless world, marketers in India and around the globe will have to embrace the new regulations and evolve with them while recognizing the true value of first-party data.

The article is authored by Dimpy Yadav, General Manager Xaxis India

Disclaimer: The opinions shared in the article are of the author and do not necessarily reflect the opinion of the publication.