TL;DR
- Increasing privacy regulations will continue to force change on organizations’ customer experience due to third-party cookie deprecation and the impact of technical changes on first-party data.
- Parts of the user journey will become untrackable, as will the ability to associate various touchpoints—particularly across websites. As such, personalization will become much more difficult, negatively impacting conversion rates.
- Privacy changes are ultimately resulting in reduced effectiveness in digital marketing performance, due to the inability to target on third-party sites.
- ROI measurability has and will become more difficult.
- Traditional measurement models have become less accurate; leading organizations are moving towards new models such as Unified Marketing Measurement (UMM).
- Marketing attribution will become more difficult due to first-party cookie duration limits.
- Opportunities for business include showcasing their serious and meaningful commitment to upholding users’ privacy.
With privacy regulations, technology changes, and consumer expectations well underway and only increasing, marketers are understandably concerned about the impacts to their customer experience—especially from the targeting, personalization, and measurement perspectives. Understood as the totality of interactions, as well as the emotions, that a customer has with a brand across the customer journey, customer experience is a key competitive advantage for many brands, resulting in greater customer lifetime value and customer advocacy. Below we provide an overview of the changes taking place, as well as their practical implications.
The first and most important point to mention is that as a result of both third-party cookie deprecation, as well as limitations on first-party data, there will be an overall decreased availability and fidelity of customer data. As a consequence of third-party cookie deprecation, the accuracy of digital marketing performance will suffer due to a decreased ability to target customers on non-owned (third-party) websites. By extension, this inability to connect user behavior on a third-party site to outcomes on a brand’s owned site will affect ROI measurability, making it more difficult for marketers to get as granular a view of the impact of multi-marketing touchpoints on overall business outcomes. Anonymization and pseudonymization requirements can make it more challenging to connect and analyze customer data across different touchpoints.
Given third-party cookie deprecation, some measurement models will become increasingly less accurate and may even become obsolete, leading more brands to adopt new forms of measurement. Brands should shift from more granular analyses to more general modeling that does not rely on third-party cookies to identify users. One such traditional, econometric model is MMM (Marketing Mix Modeling), with more advanced brands using other attribution models such as UMM (Unified Marketing Measurement). These econometrics-based statistical tools use aggregate data as input, and are therefore more durable vis-à-vis privacy changes.
Most of the impacts discussed above are a consequence of third-party cookie deprecation; however, we would be remiss not to acknowledge the impacts that technical changes have and will have on first-party data. These include, for example, multiple browsers’ (e.g., Safari, Firefox) decreased first-party cookie duration limits—in practice, this means that brands now have a shorter window of time in which to recognize that a user has returned to its site. Effectively, this will skew the number of new vs. returning users in favor of new users, and has implications for attribution as well. As a result, customer experience visibility is more fragmented, particularly in the case of high-consideration products, where prospects may return multiple times to a website.
With first-party cookie duration limits, a brand’s visibility of the full consideration phase may be limited, meaning that a personalized experience will become more difficult to deliver. Similarly, brands may face limitations on using customer data for personalized advertising campaigns or tracking customer behavior across multiple platforms. Finally, consent options themselves impact the user experience, as users grow frustrated with consent pop-ups and options that increase friction.
There are, however, some opportunities within these challenges. Brands that do well in protecting user privacy and are effectively able to communicate these efforts can enhance customer trust. When customers have confidence that their personal information is being handled securely and used responsibly, they are more likely to engage with a brand, ultimately having a positive impact on the overall customer experience (see Google and Ipsos 2023 Privacy Report for more). When customers feel informed about data practices, it can positively influence their perception of the company and their experience. In the current landscape, brands who are able to create and execute meaningful first- and zero-party strategies, leverage the insights, and gain customer trust will be in a more competitive position.
