What Is a Third-Party Cookie?

Third-party cookies are created and placed on websites by someone other than the website owner (a third party). These cookies collect user data and allow marketers to develop detailed visitor profiles and create personalized advertising and retargeting campaigns.

What Is the Cookiepocalypse?

The “cookiepocalypse” refers to the depreciation of third-party cookies and how it affects advertising and marketing practices. As a result of new privacy laws, browsers need to change to stay compliant. Safari, Microsoft Edge, and Mozilla Firefox stopped supporting third-party cookies a few years back. Google Chrome, which owns over 64% of the market share, will stop supporting cookies by 2024.

Here are three reasons why this is a problem for automotive dealers:

• Data Loss: As technology and privacy policies change, more customers will opt out of your systems. Data loss reduces your ability to analyze and target user behaviors in your advertising.
• Increased Customer Acquisition Costs: It increases customer acquisition costs due to reduced ad targeting and campaign measurement. Less relevant ads reduce return on investment (ROI) and force dealers to use expensive channels such as app stores, social media sites, and marketing tech platforms.
• Decreased Revenue: Acquiring high-value, new customers using outdated third-party targeting and personalization is tied to revenue, and the “cookiepocalypse” puts that at risk.

The Case for First-Party Data

With the slow death of cookies, automotive dealers will need to increase their reliance on first-party data. First-party data is information your dealership collects about customers from online and offline sources, such as your company’s website, app, CRM, social media, or surveys.

First-party data shows a clearer picture of the consumer. However, while essential to own and activate, this data is not always handed to brands by the consumer. In most cases, dealers only have one or two sources of older first-party data: DMS and CRM data. The problem with this data is that it looks backward. What about the present and unknown predictive future in-market data?

With legislation against the “sale of data,” purchasing traditional audience data has already become legally messy and will no longer be possible.

The Benefits of First-Party Data

The beauty of first-party data is it enables dealerships to market, optimize and measure your advertising dollars. Here are just a few of the benefits of leveraging first-party data:

• Lowering dependency on third-parties
• Increased advertising accuracy
• Owning your data and controlling it as a business asset
• Increased return on ad spend (ROSA) with better targeting
• Optimizing and measuring your ad campaigns
• Additional insights and analytics of your website visitors and in-market retargetable audiences

The Data Famine

The challenge is that the world still lives in a desert of first-party data. As you just learned, the only first-party data you own is in your DMS from CRM, and you have to ask yourself, “How accurate is this data, and do I have enough?” In reality, dealerships don’t have enough first-party data to make most investments worthwhile.

There is a pronounced move towards first-party data as cookie-based audiences become less accessible. Retargeting won’t be as meaningful as the audiences on Facebook and Google get smaller and smaller. They will also become more expensive to reach since there will be fewer opportunities due to the deprecation of third-party cookies.

Now is the time to get ahead of the data famine and start building ways to collect more first-party data to leverage the new solutions introduced into the market.

How Can You Leverage First-Party Data?

• Create Customized Audiences: Collecting first-party data allows you to reach prospects who visit your digital properties, purchase often, and spend the most on your products and services.
• Monetize Audiences: Leveraging first-party data allows you to activate immersive household marketing across various channels such as display, direct mail, CTV, Social, Audio, and Video.
• Measure Your Marketing Performance: Marketing to first-party data sets allows you to measure the return on ad spend. Measuring marketing performance is essential to understanding which marketing campaigns are working and which are not.
• Future-Proof Your Dealership: Collecting first-party data helps open new revenue streams and protects you from outside forces such as pandemics and changing laws and regulations. No one can take your first-party data away from you. It can’t be sold and can’t be de-platformed.

So, Where Do You Start?

If you’re starting to feel a little overwhelmed about how to get started with first-party data, here are seven questions you can ask a potential data partner:

1. What is the impact of losing third-party cookies on their technology? Do they have a plan?
2. What kind of data am I getting? Not all data is created equal. Make sure to see examples of the data and know where they are getting it. Stay away from IP addresses and mobile IDs.
3. Is your data legally compliant? Ensure your vendors are CCPA-compliant, have a consumer opt-out plan, and the information is checked, validated, and audited.
4. Is it clean data? Ask vendors you are vetting about their data hygiene program. For example, do they run addresses through the NCOA? Are they checking with the USPS to ensure the household is a valid, occupied residence?
5. How will the data be sent? What’s their process for accessing your data? Have your data vendor walk you through the process. Ensure the information is accessible to your marketing team while remaining gated and secure.
6. How much of a heavy lift will it be for my team? Many data platforms require a heavy lift on the end-user’s part. You don’t want this process to be too much work for your teams.
7. Can you help me activate the data? Ask your partner what they can do with first-party data to support your dealership’s growth. Collecting your first-party data is only one part. Activating your data is crucial.

The bottom line is third-party cookies and ad identifiers are going away. Dealers, their agencies, and vendors must respond tactically and strategically. Addressable advertising is the default in the digital world and relies on identifying users to serve the right message at the right time. With the demise of third-party data, utilizing first-party data from consumers is critical for success in acquiring and retaining customers for your dealership.