Third-Party Cookie Alternative for Direct Marketers: Q&A with SeQuel’s Digital Media Manager, Jake Bawolek
In today’s Q&A guide, we address the impending removal of Google’s third-party cookies. Jake Bawolek, SeQuel’s Digital Media Manager, will provide valuable insights and share a third-party cookie alternative to help you successfully adapt your prospecting strategies.
Cliff Notes: The End of Google’s Third-Party Cookie
Google Chrome’s third-party cookies are small pieces of data stored on a user’s browser by websites other than the one they are currently visiting. Though the original purpose of cookies was simply to store a user’s website preferences and shopping cart items, marketers have long leveraged these behavioral crumbs to anonymously store user behavior on various sites and deliver personalized, hyper-targeted digital advertising − and accurately track the results.
However, with consumers desiring more privacy and control over their personal data, the clock is ticking on third-party cookies. In February 2020, Google announced it would be phasing out third-party cookies from Chrome, citing the need for consumer-centered, privacy-forward solutions. Meanwhile, Safari and Firefox have been blocking third-party cookies as default settings since March 2020.
Google’s multiple postponements of the phaseout have led to inaction from many cookie-dependent advertisers. As Steve Yap, Head of Google’s Technology Platforms puts it, “The industry has been drunk on the cookie for quite some time now, but we’re now at an inflection point.”
After the January 4, 2024 restriction of third-party cookies for 1% of all Chrome users, it appears that cookie buzz is wearing off, and marketers are now “taking the new 2024 Chrome deadline seriously” and “testing new plans.”
How will the removal of third-party cookies affect audience targeting?
Bawolek: For advertisers relying on third-party cookies for audience targeting (which Hubspot research suggests may be as high as 83% of all advertisers), the signal loss will be a double whammy.
On one hand, audience scalability and matching precision will be weakened, as cookies are a key ingredient in identity resolution. With fewer identity signals, we can expect the targetable audience pools to shrink, and segmentation will be less precise, much like how Apple’s iOS 14 disrupted Facebook advertisers in 2021. The outcomes are lower conversion rates and increased customer acquisition costs, particularly in prospecting campaigns.
Secondly, third-party cookies are a key input in conversion tracking. Most digital advertising pixels rely on third-party cookies to help identify that a user who fills out a lead form or makes a purchase, is the same user who was served a digital ad impression. Diminished measurement means weakened ability for both humans and machine learning to optimize campaigns based on results.
What third-party Cookie alternative can marketers use to continue prospecting effectively?
Bawolek: A main reason for Google’s phaseout delays is their prolonged development of a valid alternative to third-party cookies themselves. Google Topics, Privacy Sandbox, data clean rooms, and most recently Google PAIR have all emerged as alternatives but have had mixed reactions and limited usability. For many proactive digital marketers, these cookie alternatives are insufficient, and there is a need for cookieless, future-proof prospecting strategies.
At SeQuel, we are positioned very well to provide third-party cookie alternative prospecting strategies for our clients. Given our background in direct mail, we have been testing the integration of offline and online data activation and measurement for many years, long before any announcement of third-party cookies deprecation. This puts us a few steps ahead in this new age of digital prospecting.
Through our testing, we’ve found that offline data is almost always more accurate, comprehensive, and reliable than cookie-based online segments. In some cases, we’ve even seen offline prospecting segments perform nearly as well as a client’s first-party retargeting segments. We suspect this is because offline data (which has long been used as the fundamental component of direct mail campaigns) is tied to an individual’s name and physical address, quite possibly the most accurate identity anchor accessible to marketers.
Can marketers leverage offline data to improve digital targeting?
Bawolek: What many marketers may not realize is that they can also activate these powerful audiences online to create relevant, high-performing digital advertising campaigns. As mentioned earlier, we’ve been doing this for years – testing all kinds of approaches that harness the power of both offline and online techniques.
Offline lookalike models utilize second-party purchasing data to generate lookalikes, which are based on first-party seed audiences. These consumer insights span many dimensions of permissioned data, including demographics, lifestyle, purchase behavior, marketing channel usage, social media engagement, and more. Essentially, it’s everything that third-party cookies offer, but executed offline instead of online.
Using a deterministic identity graph, we can link these offline audiences to their online identities, without third-party cookies.
How is digital campaign performance measured when using offline data sources?
Bawolek: A unique benefit of onboarding offline audience lists is that you have a list of real people to match results back to. Using a first-party list of actual purchasers, we can measure actual business results, not just pixel conversions. We call this your “single source of truth,” and it’s really an exclusive benefit of using offline data.
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Offline lookalike models present new opportunities for marketers to improve their targeting, personalization, measurement, and overall direct response campaign performance.
Are you ready to take your digital prospecting game to the next level? Download our free e-book, Prospecting with Precision, or contact a SeQuel strategist to learn more about third-party Cookie alternatives for direct marketers.