Personalized: Customer Strategy in the Age of AI
Personalized: Customer Strategy in the Age of AI offers a playbook for delivering advanced personalization at scale.
Last week, Google announced that it was canceling its plan to eliminate third-party cookies in its Chrome web browser. Instead, it is working on a plan that would allow consumers to opt out of them more easily.
“Even though this decision means that third-party cookies remain, it’s another step on the long, steady march toward the death of third-party cookies,” says BCG Managing Director and Senior Partner Mark Abraham. “We’re not there yet, but we’re very much in the twilight of third-party cookies. The fact that consumers will be more easily able to opt out means that companies will simply have access to less of them over time.”
According to a BCG study, a majority of marketers estimate that the ongoing changes to third-party cookies are putting at least 20% of their data used for targeted marketing at risk. Google’s announcement addresses the concerns of marketers while also responding to the privacy concerns of consumers. The immediate challenge to marketers is mitigated, but they still must prepare for a cookieless future in the long term.
Brands that have adapted their marketing and no longer use third-party cookies have seen their digital marketing performance improve by 10% for mature enterprises and up to 100% for small and medium-sized businesses, based on BCG experience.
Third-party cookies enable companies to track consumer activity across every internet site they visit, including their transactions and browsing history. Many companies use third-party cookies to understand consumer behavior, build personalized profiles, and tailor their marketing outreach.
Other web browsers, including Firefox and Safari, have already eliminated third-party cookies. Google, which still controls about 65% of global desktop browser volume, initially said in 2020 that it would follow suit. But it pushed back that plan several times and now has officially shelved it, meaning that third-party cookies will remain in Chrome for the foreseeable future.
Here’s how companies can revamp their marketing playbook to succeed with—or without—cookies.
Maximize first-party data. Leading companies are investing to build digital relationships with their existing customers through their own apps and websites. They can identify customers through an email or login and track their transactions and browsing history directly—data that is the gold standard for understanding consumer behavior.
Look at zero-party and second-party data as well. Increasingly, companies supplement first-party data with what is known as zero-party data, which entails directly asking consumers about their preferences. For example, Stitchfix asks new customers about their style preferences, and media brands like Netflix and Spotify ask whether viewers liked or disliked a particular movie or song.
In addition, companies can use second-party customer data, which comes from partnerships that companies strike with brands that have a similar customer profile. For example, Starbucks customers can connect their Starbucks Rewards accounts with their Marriott Bonvoy and Delta SkyMiles accounts, enabling certain data sharing across these partners.
Win the battle of loyalty programs. Loyalty programs have exploded in the last several years, with new programs launching and existing programs seeing major redesigns to attract members, boost sales, and capture customer data. The challenge is that as programs proliferate, the universe is becoming fragmented, with consumers joining more programs without necessarily spending or engaging more. Companies need to make sure that their program is sufficiently compelling and offers real value to consumers in some way, rather than just rolling out a copycat offering.
Get better and faster at testing new campaigns. Experimentation is becoming critical in precision marketing, and companies need to build strong capabilities in rapid measurement and automation. Quite simply, the brands that test more campaigns and learn from them faster will win. Leading companies use agile teams, sprint-based pilots, and dynamic optimization to run hundreds of campaigns at once and get results back in real time—not just reporting on click-throughs but also on incremental sales.
Don’t alienate consumers by overwhelming them. Spam abounds, and generative AI makes marketing content even easier to generate, meaning the problem is likely to get worse. But just because companies can send a marketing message to consumers doesn’t mean they should. A recent BCG analysis found that about two-thirds of consumers have received an inaccurate or inappropriate marketing message in the last 30 days. Without curating marketing outreach and targeting consumers accurately, brands are at risk of alienating them—and losing their business forever.
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