Cardlytics Guide to a Cookieless Marketing Strategy

The rise of digital marketing has evolved side by side with third-party cookies. And now–they're parting ways. 

Evolving privacy concerns are shaping policy decisions across the big tech landscape that will change how marketers handle digital channels. An entire industry is shifting from reliance on cookie-based marketing data to a future that currently feels a bit unclear.

You have options, but if you're asking—now is the time to support an omnichannel cookieless marketing strategy.

In this guide to a cookieless strategy, we'll discuss why third-party cookies are a thing of the past and how performance marketing programs with an omnichannel approach are the path forward.

What is cookie-based marketing?

In the digital world, a cookie is a small piece of code designed to store user data. In 1994, when a Netscape engineer invented the cookie, the goal was to improve the user experience on the web. 

Cookies can track things like:

• Page Visits
• Length of Time on Page
• User Location
• Income 
• Gender
• Interests
• Social Media Likes
• Age

By 1996, developers had figured out how to use cookies to extract valuable data for marketers, and by 1999 the third-party cookie had revolutionized digital marketing capabilities. For the last two decades, the marketing world has revolved around cookie-based marketing, often at the expense of data privacy.

As momentum grows behind data privacy as a human right, fueled by policies like the General Data Protection Rights act passed by the European Union in 2018, Big Tech is feeling the pressure to take third-party cookies out of the equation–leaving marketers no choice but to adapt.

Preparing for a cookieless future

The end of third-party cookies is a significant change for digital and programmatic advertising. Without cookies, marketers must find new ways to gather demographic and psychographic data to build complex customer profiles. 

The ability to track attributions to measure campaign effectiveness or to retarget and redirect traffic effectively will also be diminished. This means that return on investment for ad spend will suffer as conversion rates decline.

The fallout from the depreciation of third-party cookies will force change as the marketing world explores new options to recover lost ground in audience profiling, retargeting, and attribution tracking.

Alternatives to third-party cookies include:

• Cultivate First-Party Data Streams
• Utilize Aggregate First-Party Data Sources 
• Pair Contextual Targeting with First-Party Data
• Watch for New Sources

How big tech is moving us towards cookieless marketing

Once a place of anonymity, the internet has morphed into a world full of tools to track every click and pixel for someone else's benefit. 

It's an invasive practice that grew alongside the internet while effective data privacy policies were slow to adapt. That is–until Big Tech companies like Google, Apple, and Facebook made policy changes that would push us towards a cookieless future.

Apple set a precedent with its iOS 14 updates. For the first time, this tech giant rolled out changes designed to protect its users' privacy. An App Tracking Transparency Framework (ATTP), Wifi MAC address randomization, and Apple App Store permissions and disclosures put iPhone users in control with who they shared their data with.

Google matched suit by developing Google's Privacy Sandbox to foster innovation and facilitate the development of privacy-first marketing solutions in preparation for a cookieless future. This tech-facilitated development project produced several great ideas, including:

• Federated Learning of Cohorts (FLoC)
• TURTLEDOV
• SPARROW
• Dovekey
• PARRROT
• Fledge

Each of these initiatives addresses a different area of concern for digital privacy, providing an alternative that serves as building blocks for future cookieless tech stacks.

The innovation process is experimental. Every new advancement is a learning opportunity to discover what works and what doesn't. Google FLoC (Federated Learning of Cohorts) was the first attempt at a true cookieless alternative. 

FLoC was designed to protect data privacy, but it was quickly discovered that a fundamental design flaw actually made it easier to fingerprint and track users. Google suspended development on FLoC in July 2021, effectively shifting resources to Google Topics API instead.

This proposal utilizes a temporary, browser-based solution that shares topical interests safeguarded with pro-privacy protections. With Google Topics API, advertisers can access the important data they need for audience targeting and retargeting without third-party servers.

Policy moves towards privacy, limiting cookie-based marketing

Policies that protect personal privacy aren't new. As far back as 1789, the US Constitution included amendments addressing these protections. The only thing that has changed since then is how information is collected, stored, and used. 

The digital world is continuously evolving, and along with it, how we apply policy changes. More recent legislative actions like the General Data Protection Regulation (EU) or CCPA (US) are modernized policy updates to protect personal privacy as a human right in the digital age.

In the late 1980s and early 90s, policy moves established a National Do Not Call Registry and the Health & Medical Privacy (HIPAA). When Web 2.0 arrived in the 2000s, many states adopted data breach notification laws. And as recently as 2018, the EU passed a first-of-its-kind privacy act for the digital world, setting a precedent for other global leaders to follow suit.

With each new policy, the rights of individuals gain a little more protection, and the responsibilities of organizations that collect, use, and store personal data become greater. After the GDPR went into effect (2018), most online websites began displaying opt-in notices regarding cookies. 

This was one significant step in bringing personal privacy concerns out of the peripheral and into focus for everyday users. In the US, California was the first state to pass privacy-specific legislation similar to the GDPR, with a few states like Colorado and Virginia following suit. These policy changes designed to give individuals control over how, when, and with whom their information is shared have a naturally limiting effect on the function of cookie-based marketing systems. So, that is to say, every step in the direction of pro-privacy interactions is a step away from cookie-based marketing.

A cookieless marketing strategy for the future

Not all cookies are getting the crunch. Pro-privacy maneuvers are specifically targeting third-party cookies that collect and share unauthorized data. That means it will take a little more effort to collect data–but quality, first-party sources are still out there.

Customer loyalty programs provide a path forward

In a high-effort, high-reward environment, customer loyalty programs shine as a quality-rich data source. This sets the stage for building a cookieless marketing strategy that prioritizes personalization and engagement over blanketed demographic reach. 

With this level of detail, the downfall of third-party cookies is enabling the rise of omnichannel integration. We're moving away from generalized tactics and siloed strategies fed by voluminous third-party data streams. And we're working towards hyper-personalization that caters to a specific, highly-engaged, opt-in audience.

Personalization is great, but efficiency is still important

Without third-party cookies, marketers are apprehensive about finding cost-effective ways to reach their audience. These feelings are valid–the cost of curating first-party data streams can be higher and is often spread across a much smaller audience.

But what if you can grow the lifetime value of a customer to offset the cost? An omnichannel marketing strategy that relies on first-party data fed from a well-designed loyalty program offers a cyclical, self-feeding sales cycle that can extract that value.

What if your customers received a notification reminding them of special offers in your app when they stepped foot in the store? With geo-location data, it's possible. What if your purchase decision process in the store was facilitated by scannable QR codes that helped your customers find the things they really wanted? 

And what if they received an SMS follow-up after leaving the store, giving a time-based second chance offer on something they shopped for but didn't purchase? With an omnichannel strategy, it's all possible.

It's time to rethink the customer journey

The key to a loyalty-driven cookieless strategy is to redefine the customer journey. Instead of focusing on the 'awareness to conversion' journey, the new strategy will focus on the 'conversion to advocacy' journey.

Nurturing your most loyal customers with a seamless experience that transitions easily between digital and physical touchpoints will be the key to success in a post-cookie world.

How Cardlytics can support your cookieless strategy

The end of third-party cookies signals a major shift in how brands market their products and services. This change doesn't necessarily mean the end of targeted campaigns. If you look at the end of cookies as an opportunity, it's a better chance to serve your best customers with highly personalized experiences. 

When you invest more into serving your loyal fanbase, brand affinity grows naturally. Those satisfied, engaged customers are more than happy to share their positive, attention-grabbing experiences across various social platforms to bring you new traffic in a very authentic way.

The first step to building your cookieless strategy is to find a high-quality source of first-party data. With the power of firsthand Purchase Intelligence™ provided directly by banks, Cardlytics provides exactly what brands need to make the switch.

Our platform has been built with a pro-privacy mindset from day one. By partnering with top banks, we can provide access to high-quality first-party data from real consumer purchases, providing valuable insights to share of spend across brands and competitors. Our data is vital to growing a healthy, sustainable loyalty program, providing you with a high-value audience to power your cookieless strategy.