Cookies Are Ending and Ads Are Underperforming: How Should Businesses Respond?

Contents

1. How should businesses respond to the impact on digital advertising?
2. Two recommendations for responding to the end of cookies:
3. First-party data becomes the strongest driver of revenue growth
4. True digital transformation in retail: omnichannel replaces multichannel

When the COVID-19 pandemic broke out worldwide in 2021, people started working and studying remotely. In 2022 came the Russia-Ukraine conflict, renewed pandemic alerts, global inflation and the end of Taiwan’s demographic dividend, and businesses began looking across borders to break through. Consumers who couldn’t go out shopped online, ordered food delivery and met over video calls. Within just two or three years, these digital behaviors went from something people adapted to, to something they were used to. After these years of rapid change, businesses realized that digital transformation can’t wait. Most of us have tried at least some new digital tools to help our businesses transform, and from every strategy shift and turning point, we’ve learned one thing for sure: the world changes in an instant.

How should businesses respond to the impact on digital advertising?

The end of cookies is a major challenge for businesses because it affects digital marketing strategy and privacy policies. In recent years, brands have faced low social media reach and the decline of third-party data. In response to privacy concerns, Apple has started blocking third-party tracking, the EU has tightened the GDPR, and Google is about to suspend third-party cookies. All of this will further limit how third-party data can be obtained and used. As third-party data disappears and the easy gains of digital advertising fade, businesses have started focusing on member management to build up first-party data.

Two recommendations for responding to the end of cookies:

1. Use first-party data: Businesses can rely on the data they own, their first-party data, to better understand their audiences, customer needs and behavior. This supports personalized marketing and more valuable content.
2. Diversify your marketing strategy: Don’t rely on a single digital marketing channel. Use a diversified strategy, including social media, content marketing and SEO, to reduce your dependence on cookies.

First-party data becomes the strongest driver of revenue growth

“Over the past few years, Google has worked with Boston Consulting Group (BCG) to study how brands achieve outstanding results with first-party data strategies. We found that when brands apply first-party data to key marketing functions, they can see up to a 2.9x revenue uplift and a 1.5x cost saving. Yet despite these clear benefits, most brands have still not realized the full potential of first-party data.”

“First-party data belongs to your business alone. It is data you collect and own with consumers’ direct consent, from sources including consumers’ interactions with your apps or websites and their responses to marketing programs such as email or loyalty programs. With first-party data, brands can build direct relationships with customers, create value and improve advertising performance.

To stay competitive in today’s fast-changing consumer market, companies must aim to be digital-first and drive transformation proactively. Now that digital transformation has changed everything about how consumers find products, compare prices and buy, how should marketers communicate? And how can an omnichannel digital transformation strategy help you reach your sales growth targets?

Successful businesses are using a wide range of digital practices to respond to a rapidly changing digital environment. In retail, the line between physical and digital is no longer clear-cut; instead, a seamlessly connected ecosystem is taking shape. Are you keeping up with this trend of “digitizing the physical”?

True digital transformation in retail: omnichannel replaces multichannel

Many companies split physical stores and e-commerce into two departments, which often leads to customer complaints such as: “I’m already a member at the store, so why do I have to register again to shop online, and why can’t I use my points in both places?”, “Why can’t I use my online shopping credit offline?” and “Why aren’t online promotions in sync with in-store ones?”

Today’s consumers shop through physical stores, websites, social media and apps, and 76% of customers expect a consistent experience across channels. Customers also expect omnichannel retail to offer delivery options, including ordering online and picking up in store, as well as shopping in store.

Omnichannel and multichannel are two different retail concepts. How do they differ?

1. Omnichannel: Omnichannel means a retailer provides a consistent shopping experience across multiple sales channels. Whether in a physical store, online, in a mobile app, on social media or through other channels, customers can seamlessly buy products, look up information and enjoy services. Omnichannel aims to eliminate gaps between channels so customers can freely choose where to shop, while keeping the shopping experience consistent.
2. Multichannel: Multichannel means a retailer offers products and services across multiple sales channels, but these channels are not necessarily seamless or consistent. For example, a retailer may sell through physical stores, an online store and a mail-order catalog at the same time, yet the shopping experience may differ from channel to channel.

With an integrated omnichannel strategy, businesses can offer a highly convenient, personalized cross-channel shopping experience at any point in the customer’s purchase journey, whether customers are shopping online, on a mobile device or in a physical store. The idea behind omnichannel retail is to provide a frictionless, personalized customer experience at the moments that matter.

To stay competitive in today’s fast-changing consumer market, companies must aim to be digital-first and drive transformation proactively. Businesses shouldn’t limit themselves to thinking about how to market online and how to push products offline; instead, the principle is “wherever consumers are, that’s where we are.” Now that digital transformation has changed everything about how consumers find products, compare prices and buy, how should marketers communicate? And how can an omnichannel digital transformation strategy help you reach your sales growth targets?

Overall, omnichannel focuses on providing a seamless, consistent shopping experience, while multichannel simply means a retailer operates across several different sales channels. In practice, the difference between multichannel and omnichannel lies not only in how well the channels are integrated, but also in how the membership structure is designed and how far the databases are integrated, among other things. Getting this right meets consumers’ personalized needs, raises customer satisfaction, and improves business value. In today’s highly competitive retail environment, many retailers are working to implement an omnichannel strategy to meet consumer needs and become more competitive.

Further reading:

• 7 steps to CDP mastery: the CDP maturity model
• Big data drives decisions: how MarTech helps brands succeed in digital transformation