Is the Cookie hype out of all proportion?

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By: Wise Marketer Staff |

Posted on July 17, 2013

Online marketers have gone from denial to grudging acceptance as they face up to the slow demise of the web cookie, but this is perhaps no bad thing, according to Russell Loarridge, managing director for Janrain Europe, who argues that cookie-based marketing is something of a blunt tool at a time when much greater finesse is needed.

Marketers are being encouraged to exploit in-depth consumer information to improve customer relevance and engagement. However, at best, cookies provide the basic age and gender information; they do not deliver attitudes, behaviour and activity. Cookies cannot enable the depth of targeting that could and should now be achieved.

Rather than fretting about their demise, marketers should be using this opportunity to become far more effective using better techniques to identify consumers. Permission-based models such as social login can transform customer insight and enable innovative targeting based on the customer's own social network profile data.

Social login has already begun to change the web marketing landscape: once a consumer agrees to share personal information, there is very little tolerance for irrelevant marketing. The onus is now on marketers to ensure that their content and offers truly reflect each consumer's validated demographic and, increasingly, even their psychographic profile.

Cookies crumble
Third party cookies are under a full-blown attack. Firefox already blocks third party cookies by default, Microsoft has implemented 'Do Not Track' by default in Internet Explorer 10 onward, and Apple's Safari browser has blocked third party cookies for more than a decade. And AdBlock has counted more than 10 million installations on the Google Chrome browser alone.

But is this really such a bad thing? Cookies may have been traditionally used for behavioural targeting, but to what value? In an era of growing consumer sophistication and resistance to non-permission based marketing, isn't cookie-based targeting a marketing model that has had its day?

While 52% of ad agencies and 43% of marketers use third-party data in their digital campaigns, according to an eXelate and Digiday study, consumers are increasingly uncomfortable about third party tracking. In 2008, 57% of consumers did not want to be targeted. By 2012, this level had increased to 68%.

Still, organisations continue to invest heavily in tracking cookies and use the extrapolated information to target advertising, but the results are not impressive. Even the most sophisticated segmentation and analytics can misinterpret the limited information provided by cookies: without even the most basic demographic information, such as age and gender, it is no wonder 98% of consumers have been mis-targeted in digital marketing.

Make it relevant
As cookies are increasingly blocked, targeting will become harder to achieve and even less relevant - further increasing the risk of consumer disenfranchisement. Furthermore, marketers are increasingly recognising that targeting can be based not only on basic postal code, age, gender information but also a range of psychographic factors such as activity, interest option attitudes (AIOs), values and behaviour. These attributes have never even been considered by cookies but are now available via other routes - most notably opt-in.

Given increasing concerns about cookies, there is a clear need to shift the model. Permission-based marketing offers consumers the chance to opt-in to a relationship with a brand or retailer. One approach is to use opt-in registration to attain new, more accurate information, based on first person declared data. Alternatively, or in tandem, organisations can offer social login, enabling consumers to use their social media identity to register and log in to a brand's website. This model is a simpler and quicker way of accessing favourite sites, improving the consumer's online experience. Furthermore, with the organisation able to ask for permission to collect data from the consumer's profile, social login provides the chance to build a new type of consumer profile that reflects the interests, activities and opinions that individuals are willing to share online.

In addition to transforming the quality of data available, opt-in changes consumer expectations. By sharing personal information, consumers expect something of value in return such as personalised recommendations or targeted adverts or offers. By delivering on these expectations, brands can improve customer loyalty and advocacy while also improving business results.

Where next?
Considering the industry's reliance on third party cookies, making a song and dance about their demise is understandable - but pointless. Instead of bemoaning the death of what is an increasingly inefficient tool, marketers need to forget the third party approach and actively embrace a new model of permission-based marketing.

Social login not only transforms the relationship but, critically, provides the platform for the essential move from inferred targeting through demographic to psychographic targeting to achieve real, valuable customer interaction and engagement - and that is exciting. With social login, marketers can become more sophisticated than ever. They can exploit an unprecedented depth of customer information to create a new era of personalised and highly relevant consumer interactions. But remember, with this model marketers must be more sophisticated to reflect the consumer commitment to the relationship.

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