Saying goodbye to cookie-based advertising

Sherry Huang, Caitlyn Sullivan on March 31st 2021

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Since its beginnings, Twilio Segment has advocated time and time again for companies to leverage their own first-party data, rather than participating in third-party data sharing solutions, such as DMPs.  

With growing legislation and anti-tracking initiatives launched by Apple, Google, and Mozilla, we’re excited to see a new focus and future for consumer privacy across the internet.

Especially in the last few weeks following Google’s privacy announcement, we’ve heard growing concern from advertisers around the future of cookie-less advertising. As many of our customers know, Segment unlocks a new way for advertisers to rethink and future-proof their advertising strategies by leveraging first-party data. 

As the market reacts and responds with no-cookie solutions, from The Trade Desk’s Unified ID 2.0 to Google’s Federated Learning of Cohorts (FLoC), we’ve made significant investments in building direct integrations to sync first-party data to prominent ad platforms, including Google, Facebook, Snapchat, and – starting today – Pinterest.

We may not have all of the answers. The one thing we do know is that brands can deliver both respectful and personalized customer experiences with first-party data, and we’ve already seen great results from our advertisers that leverage this data in a myriad of ways.

“At Redbubble, we've gotten ahead of the coming changes in third party tracking by leveraging first party data and server side tracking methods to enrich our understanding of our customers in a responsible way. It's comforting to know that we are better prepared for the coming changes, and it wouldn't have been possible without Segment.”

Collect first-party data early

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When a customer interacts directly with a brand and decides to provide that brand with their information, they presumably do so knowingly. Some companies may be hesitant to implement first-touch authentication strategies, thinking that this is detrimental to the customer experience. However, today’s digital consumers do recognize that providing their customer identity to brands rewards them with better personalization and a privacy-forward experience.

According to Daniel Newman, Principal Analyst at Futurum, “People have to want to be tracked and targeted, and they will want to be tracked and targeted by brands that are more transparent, deliver better experiences, and do so with a greater level of integrity.”

As a result, digital brands are now introducing strategies to encourage users to share information early. For example, many media companies now gate their articles, and more digital retailers offer exclusive inventory to logged in users, such as The RealReal. By obtaining user information early, companies and advertisers have a much easier way to navigate through the demise of third-party data practices. As Newman challenges, “Any business in any industry needs to think about why someone would want to expose their data--what real value is being created?”

Retarget customers with user lists and audience suppression

That being said, we’ve witnessed many of our advertising users leverage Segment’s first-party data and integrations to power their retention strategies.

For example, digital retailer Stylepit claims, “Segment proved to us that our first-party data was more valuable than any third-party data – even third-party tracking cookies – could provide. We couldn’t believe the advertising results we witnessed by using in-house data models and Segment.”

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Equipped with unified profiles of identified customers from Segment Personas, advertisers can build out various segmentations to produce audience lists. From there, they can deliver lists such as “No Purchase in Last 30 Days” directly to leading ad platforms like Facebook or Snapchat. Learn more in our Segment Recipe: Win back churned users by coordinating your ad and email campaigns.

Even for publishers, we’ve witnessed our customers building out their own interest-based, or even intent-based audiences, to drive their own ad revenue. Just as Google, Amazon, and even Walmart leverage their own first-party data to power advertising via interest-based audiences, other publishers can do the same.

Acquire new customers through lookalike audiences

Retargeting known customers isn’t the only way to harness the power of your first-party data. Many large advertising platforms (including Google, Facebook, Snapchat, and Pinterest) offer what are called “lookalike” or “actalike” audiences, or other users identified by the ad display platform similar to your existing customers.

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In essence, lookalike audiencing is like first-party data sharing in a privacy-centric way. By sending a hashed list of your customer list to an ad platform, the ad platform then “matches” and identifies the customers shared between the company and ad platform. From there, the ad platform clusters the matched users and uses its own valuable first-party data to deliver ads to users you don’t have.

Think about it: with high-quality first-party data, you can reliably and accurately identify your highest-value customers. The “walled gardens” of Google and Facebook also have a vast amount of high-quality, first-party data that can help you extend your reach. You never share what you know about your customers with them, but they can use their advanced models to target and identify like users to come back and convert on your site.

To learn more about increasing your advertising efficiency, check out this Segment Recipe, or register for our webinar with Stylepit, which nearly doubled ROAS with lookalike audiences via Facebook.

Measure performance in a privacy-first way

Speaking of conversions, it’s about time we say goodbye to the client-side tracking pixel. In recent years, a growing set of our customers have completely eliminated pixels from their site for performance and privacy reasons. 

However, this poses a new challenge for advertisers: without the pixel, how can they measure ad performance?

Luckily, a growing number of publishers have built server-side conversion tracking options to address the need. We’ve been working closely with customers and partners to shift their traditional client-side methods to exclusively server-side implementations.  

By shifting to server-side implementations, companies achieve the most accurate mid- to low-funnel conversion activity tracking, as pixels fail when browsers crash or an ad blocker is present. Sending data from a company’s back-end is the most reliable and trusted source of all conversions.

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Moreover, server-to-server transfers give businesses more control over the data they share; companies select which events to pass to advertising platforms, rather than third-party pixels tracking every movement. At the same time, this helps build better trust to consumers; users must choose to identify themselves with your brand before any conversion data can be sent through. 

While we recognize the status quo in client-side pixels, we are aligned with the future of digital advertising - one that client-side pixels are not a part of. With that, we’ve committed to building only server-side conversion tracking integrations for advertising platforms moving forward. Last year, we launched our Facebook Conversions API destination and released our beta integration with Snap’s Conversions API earlier this year.

Gear up for the next era of digital marketing

To date, we’ve unlocked advertisers with first-party data to retarget known customers, acquire new users via lookalikes, and shift to server-side implementations. 

But this is just the beginning. We’ve been working closely with partners across the industry to reimagine a world in which advertisers and publishers can work together to take control of their own first-party data and intelligently deliver richer, more personalized customer experiences across the digital landscape without having to sacrifice consumer privacy.

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