Now that we are fully into the swing of 2022, Google’s final nail in the coffin of the third party cookie in 2023 no longer feels very far away. As a result, marketers are exploring new ways to solve the age-old challenge: how to spend money to attract and acquire new customers that will deliver company revenue and the highest marketing ROI possible? While there may have been a tried and true formula in the past (based on third party cookies), that formula is being upended. Consider these market conditions:
- The third party data market is a $19B industry. According to McKinsey, the loss of third-party data will leave marketers, ad agencies, and publishing and media vehicles in the dark about behavioral and demographic insights that currently help them create target audiences and segments.
- 83% of U.S. marketers are still reliant on third party cookies for their acquisition and growth strategies, and have not yet shifted their approach (according to Statista).
- 44% of marketers predict a need to increase their spending by up to 25% in order to reach their same acquisition goals as last year (as noted by Hubspot).
But hold up, marketers, let’s think about this for a minute.
Before we ratchet up spending to blindly go after new potential prospects as we run for the hills from “Cookiegeddon,” let’s consider the ROI longevity of those marketing dollars we are so eager to spend, and take stock of the bigger picture.
Google’s end-of-life for the third party cookie is just one step in our industry’s long line of trends away toward more transparent and privacy-first solutions in digital marketing. Regulations such as GDPR and CCPA rose up with the tide of greater consumer awareness and demand for more control over how their data is used. Ultimately, this is good for brands, as it’s forcing marketers to cultivate more authentic relationships with consumers, and invite them into a consensual and more mutually beneficial relationship. While this likely will result in a smaller prospect pool overall, if managed well, that pool will be a more engaged audience – and a more profitable one over time.
This trend toward authentic relationships with consumers couples nicely with another trend we’re seeing: the rise in Customer Lifetime Value (CLV) as a key metric for measuring the health of a business. When brands focus on CLV, marketing goals become less about cramming the top of the marketing funnel with any ordinary prospect, and more about finding and targeting the right prospects (think quality, not quantity). High quality prospects turn into high quality customers. High quality customers spend more with you over time, make your company more profitable, and make the CPA you originally spent on that prospect worth its weight in gold.
Peter Fader (marketing professor at Wharton and leading expert on Customer Lifetime Value), sums up the objective nicely: “In the world of customer centricity, there are good customers, and then there is everybody else.”
So how can marketers identify, reach, and acquire “good customers,” especially now when the old ways of third party cookies are falling by the wayside? Windfall has put together a five-step guide to help you optimize your acquisition and engagement strategy – and help you acquire the right people who are likely to be most profitable for your business over time. While you can download the full report, here’s a summary of the steps we recommend:
- Unify and Augment Your First-Party Data: Make sure that your first-party data is deduplicated across all of your datasets and then enhance it with second-party and deterministic, ethically sourced third-party data.
- Apply Machine Learning to Identify Your Ideal Customer: Take your analysis one step further by applying machine learning to your customer data to identify your ideal customer profile, measure customer lifetime value (CLV), and more.
- Target the Right Consumers for Net-New Marketing Campaigns: Identify new potential customers who match your ideal customer profile through machine learning modeling.
- Track Performance with Lower-Funnel Metrics and Matchback Attribution: Effectively track conversions and leads through matchback and offline attribution modeling.
- Iterate: Refresh your data and modeling on a regular cadence to ensure accuracy and maximize performance.
Want the full guide to learn how to maximize your advertising and marketing approach to prepare for a cookieless future and a world of rigorous data privacy?
Download our ebook now: Fortify Your Data Strategy in the Face of an Evolving Privacy Landscape