This post is sponsored by Expedia Group Media Solutions
Over the past few years, there’s been a lot of talk about sunsetting third-party cookies. This has grabbed the attention of travel advertisers and marketers, generating anxiety about the future of addressability and attribution.
Why are advertisers concerned? For almost 30 years, the digital advertising industry has relied on third-party cookies to understand, target, retarget, track and report on consumers’ purchasing journey. Because of this, third-party cookies are a well-established cornerstone of personalized digital advertising.
But even as third-party cookies were removed long ago from Apple’s Safari and Mozilla’s Firefox web browsers, Google recently announced that it won’t sunset third-party cookies in Chrome after years of committing to do just that. Instead, it is going to provide an option in its browser that will allow users to make their own tracking decisions.
While advertisers may be breathing a sigh of relief, it’s still important to understand how first-party data helps marketers reach users who don’t permit third-party cookie tracking.
Let’s take a deeper look at how first-party data enables advertisers to build strategic and effective campaigns that connect them to travelers they want to reach.
What is first-party data?
First-party data can be collected by any domain owner through user interactions like searches and bookings. A domain owner like Expedia Group with brands like Expedia, Hotels.com or Vrbo collects user data from visitors to these sites. In addition to searches and bookings, first-party data can also be collected against a variety of user interactions, including engagement with site content or product-listing filters that indicate users’ travel interests and booking preferences.
First-party cookies collect and store this user data, helping domain owners create personalized site experiences to deliver more relevant online content or shopping experiences. These first-party cookies are not impacted by third-party cookie deprecation because they are owned and operated by each domain owner. This means that first-party cookies will continue to be essential for creating user profiles for enhanced targeting and personalization.
The role of personalization and first-party data
If you’re a domain owner, deploying first-party cookies to enrich the onsite experience makes repeat visits more likely because users are enjoying the experience more than they would without cookie-enhanced personalization. Creating rich, relevant onsite content inevitably leads to higher page consumption. This means that more ads are delivered to create a larger impression capacity that a business can monetize. By leveraging information users explicitly provide or that can be inferred from their interactions, domain owners can enrich users’ experiences while also improving their site content and enabling advertisers to deliver relevant promotional content.
Third-party data and its increasing scarcity
Domain owners have the right, subject to data privacy laws governing their jurisdiction, to collect first-party data. Third-party cookies play a much different role. Historically, when they were universally supported by browsers, third-party cookies stitched together data from multiple websites and advertisers used these cookies to measure conversions and understand user interactions on different domains.
How do these cookies contribute to your online experience? Think about a time when you shopped for a pair of shoes. Inevitably, almost immediately upon visiting another site, you start seeing all kinds of advertising for shoes. Perhaps you went to Zappos and didn’t buy anything, but immediately these third-party cookies enable Zappos to retarget you based on your recent visit and can even do so with enough precision to identify the type of shoe you looked at. That same third-party tracking cookie in your browser also allows Zappos to follow you around the internet, serving you ad after ad until you presumably buy something or delete that tracking cookie from your browser.
With the advent of data privacy law, the use of third-party cookies for data collection is becoming much more limited and has become increasingly compromised as more browsers have deprecated support. As more data privacy laws take effect worldwide, third-party cookie tracking is becoming less available with every passing month.
Why first-party data is critical for advertisers
Third-party cookie limitations would have a tremendous impact, particularly around attribution and reporting in terms of what can be understood beyond the domain owner’s site. If you are a domain owner, effective first-party data collection and activation have become a critical strategic pillar of your web strategy. How you wire up your sites to collect valuable first-party data and store that data against individual user profiles has become imperative.
For example, think about a search on Expedia.com for a group of four people, and two of those travelers are kids. We might infer that this search represents a “family traveler,” which becomes a deployable first-party data point even though a family classification was not an explicitly collected data point. As this example illustrates, sound first-party data collection is about looking for signals that you can collect with confidence, whether it’s a data point from a clearly classified user input, like a filter, or one that is inferred.
In practice, this means that when that person comes back to Expedia.com or another Expedia Group travel brand, our first-party data profile for that user will be used to recognize them as a family traveler, and an advertiser can deliver an ad containing a family trip promotion.
Building a first-party data strategy
If you’re a domain owner, it’s important to understand your first-party data strategy. Certainly, you’ll want to enrich users’ experiences when they return to your site and, if you support advertising, you’ll want to consider what types of sponsored content would be meaningful to users based on what you know about them. Third-party cookie deprecation might make it much more difficult to reach users beyond your domain, but it gives you more control over your first-party data.
Why it’s taking so long to sunset third-party cookies
Removing third-party cookies from browsers, particularly Google’s Chrome, is a massive change that disproportionately affects the digital advertising industry. Google announced the removal of third-party cookies but quickly realized the industry wasn’t ready.
Looking at this from Google’s perspective, the company has a massive advertising business that was built using third-party cookies to power many of its solutions. So, is there an alternative to what third-party cookies do? Outside of first-party data, there isn’t a clear answer. And don’t forget that Google is a service provider in the tech industry with customer relationships on the supply and demand side of advertising. They have massive potential liability if they don’t navigate this transition well, and prior to their recent decision not to deprecate cookies, they were relying on a third-party regulatory body to dictate when they made this move. For Google, it’s incredibly complicated to unwind what has been such a pervasive and dominant part of the digital advertising industry, leading to the decision that full deprecation of third-party cookies no longer makes sense.
How to use first-party data to drive revenue
There’s no way around it: The ongoing deprecation of third-party cookies is going to impact the way you execute your marketing campaigns. The absence of third-party cookies makes advertising more complex and makes performance more difficult to understand.
Today, it’s still easy to understand your marketing spend, but this will get increasingly more difficult. You’ll have to do a more isolated analysis of your media spend as you go from channel to channel. There won’t always be third-party cookies to enable an apples-to-apples comparison of campaign performance. This means that your understanding of user identity will be key.
The good news is that you have time to prepare how you’ll execute your strategy. It’s clear that first-party data is key in this new era of digital advertising, and Expedia Group Media Solutions can give advertisers traveler trend and behavior insights that are based on our exclusive first-party data. This information is invaluable to advertisers because it can very precisely target specific traveler profiles and audience segments. We are and will continue to be a leading resource for understanding travelers’ booking journeys, travel industry trends and other insights that will help you meet your revenue goals.
Our leading travel media network and full-funnel advertising solutions help you attract, engage and convert travelers in a highly fragmented industry. Learn more about Expedia Group Media Solutions.
About Expedia: Expedia Group™ Media Solutions is the world’s leading travel media network that connects marketers with hundreds of millions of travelers across Expedia Group brands and through offsite targeting capabilities. With our exclusive access to 70+ petabytes of Expedia Group traveler search and booking data points, we offer advertisers actionable insights, sophisticated targeting and full-funnel results reporting. For more information, visit www.advertising.expedia.com.