What the next stage of Internet privacy means for business

NO MORE blindly accepting cookies without reading the terms and conditions. Google is joining other Internet browsers to eliminate third-party cookies, first for 1 per cent of its Chrome users – or 30 million people – from Jan 4, before reaching all users by Q3 this year. Part of the tech giant’s Privacy Sandbox initiative, this move aims to meet increasing demands for user privacy and safety online.

Data privacy and protection is more critical in today’s environment of ubiquitous scams and phishing campaigns that often misuse people’s personal information, rattling people’s confidence in giving their data away.

Since the 1990s, cookies have been part of our online experience, enabling servers to identify and remember people as they make their way across various websites. The end of third-party cookies means that businesses can no longer track a user’s online activities across websites, and data collected will be kept within the user’s device instead of being sent to advertisers.

This transition to a more privacy-safe online environment is a huge turning point for companies and publishers which have long depended on third-party data to understand consumer preferences and interests – from searching a medical condition to adding beauty products to a shopping cart.

This is especially so for Asian businesses for which third-party data continues to be a cost-effective method of marketing and customer outreach. About eight in 10 brands in the Asia-Pacific say they expect their business to be negatively affected when cookies are retired, according to an Adobe survey in March 2023.

Google’s latest move could re-orient companies’ data relationship with consumers and transform the entire Internet business model altogether. But this could be a good thing.

A win for consumers is a win for business

Four out of five people say they do not have control of their own data, according to US-based marketing firm Tinuiti. Conventional wisdom has us believe that privacy is long dead – and that consumers are indifferent. After all, how many times have we accepted cookies in order to get to where we need online?

However, consumers do care about privacy – and they will take their business somewhere else when companies do not deliver it.

Some 40 per cent of global respondents, including 52 per cent of business-to-business respondents, have stopped doing business with a company that was not protective of their data, according to a McKinsey report from 2022.

Granted, companies using third-party cookies is not equivalent to poor cybersecurity. The use of cookies is standard practice in marketing today, especially as the buying and selling of digital advertising space is often automated. Close to half of marketers are still spending at least half their budgets on campaigns that use third-party cookies.

Yet, in an age where consumer expectations are sky-high, a company that prioritises data privacy and eschews data mining will have an edge over others.

Google’s move to phase out cookies reflects a larger trend of increasing privacy concerns and global regulatory pressures. Consumers want to feel safer about their personal data while browsing online, and companies can take the opportunity to change how they ask for and use consumers’ information, reframing their data relationship with consumers.

Make content valuable again

Today, more than 90 per cent of money spent on digital display advertisements are run through automated software. The endless scroll of online pages and ease with which companies can target consumers across channels have seen advertisements become cheaper and lower in quality. Tech people were in charge, no longer the editors, and it became a “scale and numbers” game: it’s all about reach, views, and clickthrough rates.

This has made brands lazy, with many opting for cheaper “spray-and-pray” approaches. Instead of investing time and effort into producing high quality and well-researched content, brands would rather create catchy, clickbait articles. Often third-party data can be a crutch for businesses. Without being able to rely on it now, there is an opportunity for businesses to focus on creating resonant interactions with their customers.

This means companies need to go back to basics.

When permission needs to be given for brands to understand more about and interact with people, consumers will be significantly more selective, forcing brands to focus on truly making their lives better. Brands that can prove their worth will succeed.

Businesses should aim to become experts in their categories and demonstrate their expertise through providing valuable content that is meaningful, precisely targeted and based on a deep understanding of consumer needs.

The impending death of cookies would not only lead to business focusing efforts on value creation where it ought to, but could also have wide-ranging effects for the entire online media ecosystem, as the content business model will evolve significantly.

The move away from generating clicks to communicating meaningful content is good news for consumers, publishers and brands alike.

Looking ahead at a cookieless world

Without the easy availability of third-party data, brands need to make a concerted shift towards first-party data, which can result in richer insights into consumers and content they actually care about. Examples include subscription data, purchase data, app data, and customer relationship management (CRM) data, all of which a company would have exclusive access to. This means investing in marketing technology systems to gather data from customer interactions on a company’s own platforms.

For more personalised, up-to-date information, zero-party data can help a business hear it straight from the horse’s mouth. This refers to conducting surveys and focus groups to collect data that consumers are willing to provide, directly understanding their attitudes and preferences.

The Internet has evolved vastly from its early days, and it’s high time we let the era of cookies rest and resume control of our content again in this new age. Let’s get back to meaning and quality.

The writer is managing partner of MullenLowe Singapore