Google’s announcement on the elimination of third-party cookies as part of their privacy sandbox initiative may have been one of the most significant disruptors in the digital landscape's recent history. Although full implementation will not occur until 2023, the race for CPGs to adjust is on, and no brand wants to be left behind. So, what do you need to know about this new cookie-less reality and how does it affect your marketing strategy? In this blog post, we’ll be going over what it means and how to turn it into an opportunity for long-term success.
What are Cookies?
Before we get into the details, we’ll give you a quick breakdown of what cookies are and the purpose they serve. In a nutshell, cookies are text files with small pieces of data that website's place on a user’s device to store specific information. They are most often used to remember basic data about the visitor like an item added to the shopping cart in an online store, and as a result help optimize the overall user experience. This information has been posing as a useful tool for digital marketers to build and deliver a personalized user experience and retarget consumers with the most relevant content based on their past online behaviour. It was a win-win for both consumers and brands that allowed for a more personalized and relevant advertising experience.
Due to rising consumer awareness and growing privacy concerns however, Google announced its official phase out of third-party cookies would begin in January of 2022. So does this mark the end of CPGs ability to acquire this valuable consumer-facing data? The good news: it doesn’t. In fact, this might quite possibly mark a new reality in which CPGs reduce their reliance on third-party data and replace it with a new (and pivotal) source of information: their consumer.
So, what does this cookie-less future mean for CPGs?
These changes in platforms and regulations mean that the need for CPGs to move into the driver seat and create direct relationships with their consumers has never been more important. Building the foundation that allows them to safely and effectively collect consumer data not only helps them adjust their advertising strategy, but helps them power lasting relationships with their most valuable consumer. The key here is building compelling touchpoints that incentivize consumers to share their information and assure them that it will be handled safely.
“Brands that want to reduce their reliance on third-party data will need to decide how much they are going to invest in acquiring “zero-party” data—information that consumers explicitly share with a company—and first-party data, such as purchase information…But it will also require offering consumers something of value in return for their data and building trust that this information will be used in secure ways.” - McKinsey & Co
While consumers may have grown weary of brands collecting their data through third-party cookies, they’re not opposed to sharing their information willingly. This is particularly true when a compelling value exchange is involved. The vast majority of consumers will happily share information about their preferences, lifestyle, taste profiles, eating habits, and purchase intent for example, if it means it's transparently used to curate a personalized experience for them.
With consumers actually motivated to provide insight, you can drive personalization and brand loyalty to new levels and solidify a direct relationship with consumers that ultimately increases their lifetime value. The key here is creating touch points and programs that consumers actually value and want to participate in. The “because we want to know more about you!” approach will no longer cut it and you’ll need to create a convincing value proposition that makes sharing information worthwhile. But what does this value consist of and how can you easily create it?
For starters you may already have channels in place to leverage without even realizing it. Think surveys, opt-in forms, product finders, email preference centers, and yes, even your product sampling programs. After all, what better value proposition than offering consumers a chance to claim a sample that fits their unique lifestyle and have it delivered directly to their doorstep, for free.
Enter digital product sampling
If we take a product sampling program as an example, think about how consumers feel when you offer them a complimentary sample of your product. It’s an instant delight that offers them an opportunity to discover new products for free. With newer digital sampling models, this is taken to a whole new level of delight by delivering samples that best suit their unique needs and preferences directly to their doorstep to try in the comfort of their home. Knowing that there is a high value incentive in it for them, consumers willingly and voluntarily share their data and because of this, they don’t consider it intrusive. The average Sampler user shares 26 data points and about 17 on their first login so not only are you giving your audience the memorable experience of unboxing and engaging with your product at home, but you’re sparking a lasting relationship with them.
It also eliminates the guesswork for you as a brand and enables you to rely less on purchase history and algorithms to guide your strategy and more on the information that your valued consumers are openly sharing with you.
Here are some examples of what your consumers might share with you while claiming their sample:
- Who they are: their age, demographics, skin type, dietary preferences, shopping habits
- Why they choose your brand over others
- Which retail stores they shop at most often
- What they thought about your product
- How likely they are to recommend your product to their friends
- What their purchase intentions are
All of these insights can be put back into your sales and marketing efforts and even help redefine your targeted audience. If growing retail distribution is important to you for example, you can look at retailer specific data (i.e. where consumers shop most often) and use that information to support conversations with retailers to prove the demand for your product.
The cookie-less future is already here and CPG marketers who don’t embrace it will inevitably lose their grip on valuable data insights. The exciting news however, is that consumers are giving brands a golden opportunity to get to know them better and more importantly, serve them better. Adopting channels that enable consumers to transparently share their needs and preferences for their benefit, like digital product sampling, will make the defining difference between those who get left behind and those who win in 2022 and beyond.