A cookieless future: How UK businesses can adapt to the end of third-party cookies

In the wake of Google’s decision to phase out third-party cookies, UK businesses are facing a shift in digital advertising and data collection strategies. With concerns about privacy and compliance looming large, how are companies reevaluating their approaches to prosper in a cookieless future?

With Google deciding to phase out third-party cookies this year, businesses must readjust their advertising and data-collection strategies. Our first article on the use of third-party cookies highlighted the increased importance that third-party cookies have had on marketing strategies in recent years. A majority of 78% of marketers confirmed this.

With the deprecation of this practice, are UK businesses prepared for a cookieless future? What steps will they take to adapt? Can tools like CRM software help leverage data without invading privacy or failing to meet compliance requirements? We surveyed 138 UK marketers to understand how businesses are preparing for a cookieless world. You can find the full methodology at the end of the article.

Businesses are concerned about, but prepared for, third-party cookie depreciation

Given the importance attributed to third-party cookies, it’s no surprise that 61% of surveyed respondents are very concerned (26%) or extremely concerned (35%) about the impact of cookie discontinuation on their company. Only 9% of respondents are not concerned at all. 

Diverse expectations exist regarding the impact of third-party cookie discontinuation on business performance. 

A quarter of surveyed marketers believe that third-party cookie changes won’t affect business performance. 39% of respondents anticipate a positive impact. However, for the remaining marketers who predict a negative impact on business performance, preparing for the end of third-party cookies is imperative.

This apprehension may have prompted proactive preparation to mitigate risks. Nearly half (49%) of marketers surveyed say their company feels well prepared for the end of Google third-party cookies, and 44% feel moderately so. This article will explore ways in which companies are preparing for this change.

The end of third-party cookies will influence marketing spend, revenue, and competition 

Given marketers’ different expectations regarding the removal of third-party cookies and its impact on business performance, we also delved into their presuppositions regarding expenditure, revenue and competition due to this change.

The majority of companies expect higher marketing spending after third-party cookie abolition

Three in four surveyed marketers anticipate increased market spending due to the inability to use third-party cookies. This can be due to their need to increase their spending on other types of data collection strategies, tracking technologies, and subscriptions to receive privacy-compliant consumer insights. A small group of 9% predict a notable increase of more than 50%. These businesses should carefully plan budget allocation to prepare for these changes in spending. Not every business will increase their spending due to this though. While 7% foresee no change, 18% say that they anticipate their marketing spend will decrease.

Most marketers expect varied changes in revenue from their cookieless strategies

Most marketers (87%) say their company anticipates varied company revenue changes after the end of third-party cookies. Just over half, (52%) of marketers expect an increase in revenue, and 36% don’t expect these revenue increases to exceed 20%. 

Conversely, while 13% of marketers say their companies do not expect changes in revenue, 35% are bracing themselves for decreases, primarily below 15%.

This underscores the need for businesses to revise their project planning and implement strategies, such as those that focus on organic growth or leverage other types of data collection, to mitigate any potential negative effects.

Many businesses anticipate boosting marketing expenses and also a rise in revenue. This indicates a recognition of the benefits of data collection and the importance of building quality relationships with customers with such as CRM platforms. Although these investments may demand higher initial spending, they often result in improved targeting and greater ROI.  

Over half of marketers expect more online competitors in a post-cookie landscape

When asked if the elimination of third-party cookies would impact competition in online marketing campaigns, 17% of respondents say they believe eliminating third-party cookies won’t affect competition. Nearly a quarter (23%) expect a decrease now that businesses cannot leverage third-party cookies. 

However, 55% of surveyed marketers foresee an increase in competition in online marketing campaigns. This may be due to reasons such as increased competition for placements on websites as part of contextual advertising strategies or an initial lack of targeting precision by companies who struggle to rely on alternative marketing and advertising strategies.

To mitigate this risk, businesses should enhance their online visibility and engagement to attract potential customers and increase brand awareness. Tools such as SEO software and social media management tools can help businesses create engaging, relevant content and foster relationships with their audience to stay competitive in this new scenario. 

Businesses plan to invest in advertising opportunities and alternative data collection methods

The changes brought upon by the deprecation of third-party cookies will mean that businesses must re-assess their marketing strategies. If businesses are taking steps to prepare for a cookieless future, how are they doing it? Here are the three most common measures:

1. Investing in new marketing and advertising opportunities: 57% of surveyed marketers say their company is planning on exploring alternative channels and platforms that don’t rely heavily on third-party cookies. These can include contextual advertising or benefitting from influencer marketing with appropriate influencer marketing tools.
2. Developing new means to collect data: Given the importance of customer data, 51% of surveyed marketers state their companies are focusing on gathering more transparent and user-consented methods to gather valuable data insights. 
3. Utilising Customer Data Platforms (CDPs): With 46% of surveyed marketers saying that their companies are turning into CDPs to centralise and manage first-party customer data, these tools can help in creating a unified customer profile, allowing for better personalisation and targeting while respecting privacy regulations. 

First-party, second-party, and contextual data will be key for data collection

The end of third-party cookies does not signal the end of data collection for businesses. A Capterra survey showed that customers are actually willing to share their data if it means receiving better services. 

Data privacy and user consent are crucial when collecting data. There are several ways businesses are adopting compliant methods to maintain their digital marketing strategies and keep customer profiling active. 

With customers willing to share data, there are numerous ways that companies can plan to collect —or continue collecting— customer data after the end of third-party cookies. 

First-party data: Leveraging data collected directly from customers, 69% of surveyed marketers expect to use the interactions between customers and their company’s website to help them in their marketing strategies. Data such as purchase history or contact information are considered as first-party. 

This data can help businesses get a clear idea of their customer base and enhance personalisation based on their interactions. What’s more, it’s more cost-effective than purchasing data from third parties and it is privacy protected. 

Second-party data: Even though marketers can collect data from their own websites, 64% of surveyed respondents say they plan to collect or continue collecting second-party data. This type of data consists of first-party data that comes from another organisation. It tends to be obtained from trusted partners and can serve to expand the scope of data the company has collected. It can also be valuable as it expands a marketer’s dataset and can help increase reach and target potential prospects that haven’t been identified yet by a company. 

Contextual data: 60% of surveyed marketers will turn to contextual data collecting in the absence of third-party cookies. Contextual marketing occurs when consumers are served with targeted advertising based on the environment in which an ad can be displayed. This can include the location of the user, the time of day, or the content of a website. Marketers will hope to increase click-through rates and conversions while decreasing user annoyance by linking adverts users will see to their demonstrated interests. 

People-based data: Marketers can leverage first-party data and zero-party data and incorporate them into CRM platforms to develop profiles of specific users. For example, an email address can be attributed to one profile, and the more activity that digital identity carries out, the easier it will be to deliver ads that are tailored to that profile. With this in mind, 55% of marketers say their company plans to collect customer data this way. 

Zero-party data: 52% of marketers plan to deploy zero-party data collection methods, gathering data that a customer intentionally and proactively shares with a business. This data can be obtained through surveys and online forms, for example, and is provided by the customer rather than collected by a website.

Redefining strategies is challenging but marketers see the benefits

Adapting to a cookieless marketing environment poses challenges for marketers. For 45%, redefining marketing strategies will be the biggest hurdle, followed by tracking the right data (42%), relying more on first-party or zero-party data (41%) and readjusting their budgets (36%).

Choosing suitable tools to aid adaption is imperative, and many respondents understand that the results may be worthwhile.

When asked about the main benefits of transitioning to zero- or first-party data collection instead of using third-party cookies, marketers highlighted how zero- and first-party data can be more accurate and help them deliver more personalised and targeted campaigns. 

Although targeting may be narrower, there’s potential for a qualitative leap that can strengthen customer relationships, while complying with privacy laws. 

CRM software will be a priority investment when replacing third-party cookies 

Businesses have various tools at hand to help them overcome the challenges of third-party cookie deprecation, such as:

Customer relationship management (CRM): 78% of surveyed marketers say their company is investing in CRM tools to unify first-party data and strengthen customer relationships in the upcoming privacy-first, post-cookie landscape. CRM tools can track customer interactions, preferences and purchase history, enabling businesses to personalise marketing efforts and nurture leads without third-party cookies. 

Email marketing: 70% of UK marketers will invest in email marketing tools in a post-cookie environment. These tools remain valuable for engaging customers and driving conversions. Businesses can communicate directly with their audience and leverage first-party data collected through sign-ups and subscriptions. By crafting targeted and personalised email campaigns, businesses can maintain engagement and nurture leads.

AI-/machine-learning-powered software: As an investment that 65% of surveyed marketers are considering, artificial intelligence (AI) and machine learning can help fill the gap left by third-party cookies by analysing first-party data more effectively. These tools can identify patterns, predict customer behaviour, and segment audiences based on various attributes and interactions. By leveraging AI-powered marketing tools, businesses can deliver personalised recommendations and optimise their marketing strategies.

As UK businesses brace for the impending end of third-party cookies, proactive adaptation is paramount. By investing in alternative data collection methods, leveraging software, staying updated with privacy practices, and embracing personalised marketing strategies, businesses can overcome the challenges ahead.