The internet as we know it is changing, and it is a driving force behind marketers scrambling to figure out how to approach zero party data in an evolving landscape.
The 2010s will likely be regarded as the wild wild west of data collection. Browsers had given advertisers a firehose of data to track consumers and deliver targeted advertising messages.
This has led to an explosion of data-driven marketing and innovative digital practices that ushered in a more personalized and sophisticated online experience. However, companies are now facing backlash from consumers who wish to have more control over the data businesses collect. Let’s be honest, we can all agree we’re ready to stop being followed all over the internet by that pair of pants we looked at once.
Gartner predicts that by 2023, 65% of the world’s population will have its personal information covered under modern privacy regulations. How should your brand handle upcoming internet privacy changes?
We’ll talk about three big changes happening now and how your brand should respond. This includes the phasing out of third party cookies, enacted and drafted privacy legislation, and shifting consumer expectations.
In this post you’ll find:
- The (Data) Cookie Crumbles: How Should Marketers Handle Google, Apple, and Others Ditching Third Party Cookies?
- What is Data Collected by Third Party Cookies?
- What Should Marketers Do with Third Party Cookies?
- How Can You Create a Zero Party Data Channel?
- Legislation like GDPR and CCPA Setting the Stage for Future Privacy Laws
- How Do You Stay on Top of Changing Privacy Laws and Regulations?
- Evolving Consumer Expectations
- How Should You Address Consumers’ Data Privacy Concerns and Earn Trust?
- How Can Vesta Help You Prepare for a New Era in Data and Privacy?
The (Data) Cookie Crumbles: How Should Marketers Handle Google, Apple, and Others Ditching Third Party Cookies?
Most marketers know by now that big tech players like Google and Apple are moving away from intrusive advertising tracking piloted by third party cookies. This effort is driven by everyday people demanding more privacy and transparency over who has access to their personal data and how it is used.
In 2021, Apple released its iOS 14.5 update with AppTrackingTransparency, which allows iPhone users to deny or approve third party tracking across apps. Apple’s browser companion, Safari, and other browsers like Firefox have already blocked tracking.
That leaves all eyes on Google, where Chrome remains the most used browser. Google will join Safari and Firefox in blocking third party cookies, however, unlike those browsers, Google intends to take a phased approach.
This has led to multiple extensions of their timeline while they figure out the best strategy moving forward, most notably through its creation of a “privacy sandbox” where websites can gather some information but ultimately will hit a wall where the browser cuts them off.
The stakes couldn’t be higher; third party cookies drive a giant proportion of online ads. The disappearance of cookies will leave many brands blind to data-backed insights, gambling with marketing dollars, and risking customer loss.
As of now, Anthony Chavez, a vice president at Google, wrote in the post: “We now intend to begin phasing out third party cookies in Chrome in the second half of 2024.”
What Data is Collected by Third Party Cookies?
For years, brands and website publishers have placed text files with small pieces of data (aka a “cookie”) on their websites that are then used to identify and store various information about a specific user.
When a user returns to a site in the future, the cookie will recall data from previous sessions to deliver a more relevant experience.
When a cookie is placed on a website by someone other than the site owner, it is called a third party cookie. Any information collected is considered third party data. These third party cookies are often set by ad-based vendors or networks that a site has partnered with to drive revenue.
Third party cookies monitor online activity and browsing across various sites to create behavioral tracking and serve relevant ad units. These cookies are available to any website that loads the third party server’s code, which means they can be tracked across domains to create user profiles. This is why your screen gets filled with ads for pants on multiple websites after a search.
Third party data has been a critical framework for brands to work with advertising networks to promote their products to people in their ideal target market. The primary goal is to drive conversion using a consumer’s stored data.
However, as we all know, consumers have grown weary of businesses “following” them and accessing information about their online habits. Big tech companies are now adjusting their strategies to meet consumer and regulatory demands for more privacy.
What Should Marketers Do Without Third Party Cookies?
One of the primary ways marketers should approach this new data era is by building up their own brand data channels. This includes cultivating touchpoints that collect first party data and zero party data.
First party data is typically passively-collected site metrics. It can include anything from login credentials and site preferences to pages viewed, scroll depth, time spent, and much more.
Zero party data is different from first party data as it is information that a consumer proactively shares with your brand or website. It relates to emotional leanings, lifestyle behavior, and personal values. Zero party data is considered the most prized data set.
Using zero party data, brands can deliver personalized engagement that drives emotional loyalty, which research consistently shows boosts customer lifetime value and keeps consumers from going to your competitors.
Senior Director of Marketing at Microsoft Advertising John Cosley said, “Zero party data is the foundation for a relationship built on trust and a value exchange. For consumers, it holds the promise of a personalized and more relevant experience with brands. In return, brands and businesses receive better insight and a longer-term relationship.”
With intentionally shared data, it’s important to remember there is extra workload and trust involved. Zero party data and first party data collection should accumulate over time and balance between giving and receiving to secure trust and deliver value.
How Can You Create a Zero Party Data Channel?
Online brand communities are an excellent way to build an enticing, interactive world between data and engagement. With the right online community platform, a brand community can be a living and breathing extension of your website, where consumers can feel deeply connected to your brand without worrying that their privacy and personal data are being exploited.
Frozen food brand, Veggies Made Great, created the VegHead Community as a gathering place for consumers passionate about Veggies Made Great products where they could also collect information surrounding shopping habits. This helps them understand buying decisions that are not easily accessible in other channels.
Put in action, Veggies Made Great launched a “Plant a Coupon” campaign through their community. This campaign identified shoppers who frequent specific retailers like Target and offered them a voucher for a free Veggies Made Great product. They also armed them with high-value coupons to “plant” at their local store for other consumers, prompting them to spread the word on social media.
With an engaging place to collect and act on zero party data, Veggies Made Great was able to generate retail distribution awareness, boost brand advocacy online, and drive conversion in-store.
Zero party data is just the beginning. Let’s switch gears and talk about privacy legislation.
Legislation like GDPR and CCPA Setting the Stage for Future Privacy Laws
In 2018, the European Union (EU) drafted and passed one of the world’s toughest privacy and security laws, known as the General Data Protection Regulation (GDPR). This legislation sent a strong signal that the EU is taking a firm stance on data privacy and security, with significant fines issued for businesses not in compliance.
The important aspect of GDPR to focus on is its seven protection and accountability principles. They serve as a good indicator of how other countries could follow suit. This includes:
- Lawfulness, fairness and transparency — data processing must be lawful, fair, and transparent to the data subject.
- Purpose limitation — You must process data for the legitimate purposes specified explicitly to the data subject when you collected it.
- Data minimization — You should collect and process only as much data as absolutely necessary for the purposes specified.
- Accuracy — You must keep personal data accurate and up to date.
- Storage limitation — You may only store personally identifying data for as long as necessary for the specified purpose.
- Integrity and confidentiality — Processing must be done in such a way as to ensure appropriate security, integrity, and confidentiality (e.g. by using encryption).
- Accountability — The data controller is responsible for being able to demonstrate GDPR compliance with all of these principles.
When it comes to the GDPR, the overarching theme is consent and security. As Steve Jobs once said, “Privacy means people know what they’re signing up for, in plain language, and repeatedly. I believe people are smart. Some people want to share more than other people do. Ask them.”
Since the implementation of the GDPR, legislation has expanded at the U.S. state level. The California Consumer Privacy Act (CCPA) went into effect in 2020, and the California Privacy Rights Act will soon follow, going into effect in 2023.
The CCPA gives consumers more control over the personal information that businesses collect and how it is used and shared. It also governs consumers’ right to delete personal information collected and opt out of the sale of their personal information.
Virginia is seeking to make a similar impact by instituting privacy legislation, which will go into effect in 2023. Another 30 states have started down the path of developing privacy laws.
In New York, a law proposed would tax Meta (Facebook), Google, and other companies for using personal data. It would tax companies for the revenue they earn on consumer data. If the law passes, it would apply to any company that derives profit from controlling or processing personal data, including Facebook, Google, Microsoft, and many others.
How Do You Stay on Top of Changing Privacy Laws and Regulations?
New security and privacy regulations will no longer be legalese for the legal department to decipher. The marketers of the future will need to understand data regulation as competently as they do advertising jargon.
Marketers are understandably concerned over the prospect of complying with dozens of state-level regulations. Federal regulation is on the horizon to battle this complexity.
The challenge for marketers to stay up-to-date will require careful thought and effort. Marketers need to catch up in this arena, as McKinsey found in a recent study that only 17% said their companies have a dedicated data governance committee that includes risk and legal professionals.
When faced with the challenge of data work happening in an uncoordinated fashion among many different departments, Verizon created its Analytics Center of Excellence dedicated to developing strong data practices. These kinds of internal structures are a prime place to ensure that there is a balance between innovative data-driven marketing and changing privacy expectations.
Philip Jenkins, director of Verizon’s Analytics Center of Excellence says that the goal of the center has been “to make our data more powerful so that we can have better outcomes — what we call ‘simple, smart and connected experiences’ — with our customers, so that we don’t waste their time, we make more personalized offers, and whatever actions we take are more relevant to what’s important to them.”
Building a company strong in data ethics and up-to-date privacy standards won’t happen on its own and cannot be a side activity. Organizations need to have dedicated teams who focus on data policy.
Evolving Consumer Expectations
Government regulations are almost always reactionary measures taken after a groundswell of citizen demand. To stay relevant with consumers and maintain market share, brands cannot rely solely on regulatory bodies to dictate data and privacy strategies.
Brands should take a proactive and thoughtful approach to understand what consumers expect in real-time. As one executive said to McKinsey, “The bar here is not regulation. The bar here is setting an expectation with consumers and then meeting that expectation—and doing it in a way that’s additive to your brand.”
It used to be that a brand was considered trustworthy when people could believe in how the company was run or how its product was manufactured, or service was performed. And for younger consumers, in particular, whether corporations were focused on the footprint they left on the planet.
Today, however, brands are no longer just manufacturers or service providers. They’re technology companies in disguise. Some brands openly admit this, like when Dominoes famously coined themselves a “tech company that sells pizza.”
While consumers certainly care how your product is made and how you market yourself, trustworthiness means something more when you become a technology company.
Being a trusted brand today is also about your data practices and privacy transparency, and it is an integral part of any company’s interaction with its audience.
All organizations should come together to create a data usage framework that captures a shared vision for the company’s data philosophy.
How Should You Address Consumers’ Data Privacy Concerns and Earn Trust?
A great step to make your brand more trustworthy is to create a brand mission statement on data collection or a Data Bill of Rights.
Consumers want to know not just the who, what, where, and how of data collection but also the “why.” Why does your brand believe data is useful? How does it connect with your overall brand story and your unique value proposition? Data is an undeniable part of our lives now. Take a stand on how your brand believes data plays a role.
Many global brands are pivoting to make sure data ethics is a pillar of their brand experience. IKEA’s retail chief digital officer spoke on data strategies saying, “It is crucial for businesses to think beyond legal compliance and consider ethical aspects when it comes to consumer data. It’s no longer good enough to think only about what we can do with people’s data, the question must be what should we do.”
IKEA is not alone. Unilever’s general counsel for global marketing and media, Jamie Barnard, said “Demonstrating your commitment to ethical principles is courageous and will ultimately build trust.”
Barnard continued that “Pioneering companies are looking beyond compliance, as tough as that sounds. If people think a company’s data practices are unethical, then a demonstration of legal compliance will not protect their reputation. This is why brands have to set and follow a code of ethics.”
Another proactive approach to understanding privacy and data expectations is to build an always-on engine for collecting consumer feedback. Online brand communities powered by the right platform are an excellent way to access consumer insights through surveys, polls, discussions, and more.
Using Vesta’s online community platform, Unilever’s Sir Kensington’s created its Taste Buds community to tap into zero party data insights using surveys, polls, and other engagement activities.
Sir Kensington’s has conducted focus groups to direct product development efforts and fielded brand sentiment and loyalty surveys to elevate their consumer knowledge. In less than one year, they collected a whopping 638,000 total survey data points! With this data, Sir Kensington’s better understands what resonates most with their audience.
A proactive strategy to collect consumer feedback arms this challenger brand with a massive weapon to compete against established market players.
How Can Vesta Help You Prepare for a New Era in Data and Privacy?
When the social movement for “free software” accustomed users to surrendering data in exchange for free services, few users were aware of their data’s value and role. We are now entering a new era where consumers are not just concerned but downright passionate about securing control over their online habits.
Vesta helps you solve the marketing paradox of designing an effective strategy that builds emotional loyalty while also creating owned data channels that respect consumer privacy and don’t rely on third parties.
Our all-in-one, online brand community platform secures your consumer relationships, mobilizes your brand advocates, and captures zero party data to accelerate the ROI of all your marketing efforts.
Interested in Learning More?
Learn more about zero party data with our article What is Zero Party Data – Everything Marketers Need to Know.