Third-Party Cookies are Dying, But Personalization Is Alive and Kicking

by Barry Levine
May 19, 2020

For some years, “1-to-1 personalization” has been an ultimate goal for many vendors and marketing. But getting to that point hasn’t been easy, and it’s getting even harder what with third-party cookies crumbling and privacy expectations rising.

Late last year, research firm Gartner shot down the idea of 1-to-1 personalization for some 80% of marketers who had invested in personalization. The reason: the cost of actually reaching that level of performance was too great, and the return-on-investment remains “hard to quantify for marketers.”

It’s not that Gartner was advising against personalization altogether. It was pointing out that the data collection, data management, identity resolution, and real-time delivery and orchestration required to deliver experiences personalized for each individual at every contact with a brand was a heavy lift, with few apparent rewards.

Instead, Gartner recommended that marketers develop a clear personalization strategy and roadmap that is more reasonable and more clearly rewarding.

It includes tailoring recommendations for segments of users, with an emphasis on segments showing the greatest potential, such as lifetime value. Also suggested: analyzing customer journeys, to determine specific moments where a “more personalized experience could deliver value.”

But it’s not just the cost-benefit calculation that is pushing back against 1-to-1. An Accenture report in 2018 found that 41 percent of consumers found it creepy to get a text from a brand or retailer while walking past a physical store. Similarly, 35 percent thought it was creepy to see an ad on social media for something they’ve recently browsed online.

In the same report, however, Accenture said 91 percent are more likely to shop with brands that send them relevant offers and recommendations.

Content is Context, Again

In other words, any consideration of personalization’s goal needs to account for the fact that, while many consumers welcome relevance, there clearly is a limit.

Little by little, marketers are beginning to better understand where that “red zone” of creepiness is, in given contexts for given users. Even if it were technically feasible and worth the cost/effort, some kinds of 1-to-1 could raise plenty of red flags for wary consumers.

Both the Gartner and the Accenture reports support the idea that, while 1-to-1 is out of reach for most brands and possibly not favored by many consumers, some level of relevance to groups of users can work and work well. If relevance is in the comfort zone, there are proven ways that marketers can satisfy relevance with little risk of getting creepy.

One version of relevance has been active since advertising began: contextualization.

It’s where TV advertisers have shown commercials for men’s razors during football games, because most viewers are mostly men. Similarly, a maker of sneakers advertises on web pages carrying sports news, since readers of that kind of content are more likely to be physically active.

Content is context, and context is relevant. 

A Renewed Focus on First-Party

While third-party cookies are going the way of the dinosaurs, their evolutionary successor is not yet known. Google, the Interactive Advertising Bureau, LiveRamp and others have launched efforts to find a successor that enables tracking with consent, but it will take time to emerge and be accepted.

In the meantime, brands can certainly adopt non-creepy levels of personalization that apply to two large groups. One is contextual-based users, discussed above, and the other is logged-on customers.

Customers and their first-party data are a goldmine that brands are now rediscovering. But it’s not just upselling to existing customers.

First of all, your customers have colleagues and friends. If your brand’s experience, quality and value are outstanding, your customers can be encouraged to spread the word to their personal networks. Your customers can be your best sales agents, a kind of targeted recommendation you don’t get from a personalization engine.

Second, since it’s so easy to switch between competing brands these days, and since customer fickleness can be such a big issue, customer retention is essentially another form of growth.

Mobile carriers, cable services and credit card companies know this, which is why they have specific customer retention teams who take over a call when a customer indicates the possibility of switching. By focusing on keeping the customers you have – using their first-party data to meet their needs – brands can build a loyal base that counters customer attrition.

Looking at Lookalikes

Finally, analysis of your customers can help you find lookalike prospects, even without third-party cookies. Lookalikes frequent the same kind of content, and often have similar demographics and purchase decisions. Understanding all of the dimensions of your best customers allows you to understand the characteristics of similar prospects and use those characteristics to find new customers.  

If a majority of your customers for men’s razors also drive SUVs, for instance, then advertising around content about new SUVs could help reach them.

Consumers want relevant choices, but don’t want to feel spied on. Browser makers and privacy watchdogs are reducing the role of third-party cookies and unconsented tracking. And marketers are trying to reconcile tangible ROI with the difficult goal of 1-to-1 individualized marketing.

Over the last few years, “personalization” became a mantra for vendors and marketers. Driven by vendors and ambitious marketers, the implied end state was 1-to-1.

But we’ve now reached a point in the history of personalization where marketers need to ask, “What kind?” And then be prepared to tailor personalization to the actual needs of your brand and your customers.

Photo by Siz Islam on Unsplash

Barry Levine writes about marketing tech, ad tech and related topics. He has covered this space as a staff Senior Reporter for Marketing Land, MarTech Today and Search Engine Land, as a staff Senior Writer for VentureBeat, and as a reporter for Marketing Dive, ClickZ, RampUp, CMSWire and NewsFactor. You can find him at LinkedIn, and on Twitter at @BarryLevine.

Third-Party Cookies are Dying, But Personalization Is Alive and Kicking
With third-party cookies ending and customer privacy concerns ascending, what happens to the promises of personalization for marketing?
Circling the Pack but Keeping it Open
We offer some transparency around what's happening here at Maark during this time of unprecedented disruption.
On Twitter, the Good Guys Are Also the Bad Guys
Twitter is turning us all into disciplinarians, preachers, and politicians instead of communicating in good faith.