For more than two decades, advertisers have continued to refine the ability to deliver effective marketing to consumers. In a world where advertisers have had unlimited access to consumer data collected from their internet activity, advances in technology have helped digital marketers become increasingly effective at delivering 1:1 marketing. We’d expect that your dealership enjoys greater ad efficiency and effectiveness through the data-driven marketing approaches you’ve adopted in the past few years.

But in the last few years, we’ve also watched a steady shift. The rise in consumer awareness and data privacy legislation necessitates change in the way digital marketing vendors collect, use and share data. And ultimately, it impacts how digital advertisers do business. Why? The infrastructure for much of today’s most effective digital marketing is built on data collected from 3rd party cookies. (But not all – we’ll dig in to this later.)

Google Chrome will be the last and biggest internet provider to deprecate 3rd party cookies and with it the free-flow of consumer data for advertising purposes. That doesn’t mean digital advertising is dead. In fact, some innovative players, like Client Command, are positioned to adapt and drive dealer success, AFTER Google “flips the switch.” Deprecating 3rd party cookies does mean significant shifts in how you think about marketing effectiveness and data. (Let’s be clear, over time these shifts will benefit consumers AND dealers.) But before we dig in to that, let’s quickly cover the ins and outs of a 3rd party cookie.

What Are 3rd Party Cookies?

First things first – a cookie is a small bit of data that relays information about a computer and computer network. These cookies track behavior across devices and websites and enabling effective technology to connect those behaviors and build fingerprints of individual consumers.

Cookies come in more than one flavor. A 1st party cookie tracks specific users visiting and engaging with your dealership website and shares that data only for the purposes of impacting the experience on that website. They are usually used to identify a user between VDPs, remember selected preferences, or identify abandoned form fills.

A 3rd party cookie is stored under a different domain than your website. It is placed on your dealership website by a third party. This gives that 3rd party company the ability to track users across your website and others to learn preferences, and behavior pattens and display more relevant ads between websites.

How are they Used?

Since the inception of the internet, there has been a free market of consumer data across websites through 3rd party cookies. This has enabled companies of every shape, size and industry to build their online marketing programs on the ability to track online users and then target them with ads. Most likely, 3rd party cookies are the primary source of data your marketing agency uses to purchase digital advertising for your dealership.

Why Are They Going Away?

The ability to track and use 3rd party cookies has been immensely useful to digital advertisers. Why? There were no controls on what data could be shared with whom. So, technology is able to track the quadrillions of website visits and share that data with companies. While it may not seem like a huge thing to share 3rd party cookies or tracking data, the fact of the matter is that many users feel that the application of that data is invasive to their personal privacy.

It all comes down to the idea that users should be able to choose what data they are willing to share on the web. This is why regulations are currently being updated across many platforms and search engines – and why your dealership marketing will be impacted too. Changes in data privacy regulations make using 3rd party cookies more difficult – or even impossible.

How Does This Impact Your Dealership Advertising?

Truth is, it will take some time to understand the full impact. Why? The biggest players, specifically Google, are working behind the scenes and releasing only incremental peeks into their product roadmaps for a cookie-less world. Big tech companies are building their strategies to be proactively positioned when Google “flips the switch”. What we do know is that any way we dice it, the deprecation of the 3rd party cookie (when it happens) will require a shift in how every company, including your dealership, approaches digital marketing. Knowing this is an ongoing storyline, let’s set the stage for what’s on the not so distant horizon.

Shift towards 1 to Many

3rd party cookies give technology access to online consumer data that tracks web activity and enables technology to build a digital fingerprint. Even with less than sophisticated tech, marketers can get pretty darn accurate using 3rd party cookies – helping everyone, even those with limited marketing acumen, move closer and closer to 1:1. Without 3rd party cookies, that landscape will change. Targeting specific people at the 1:1 level will gradually move towards targeting the many, in some way, shape or form.

Here are a few different paths already beginning to take shape. (And because this is a new frontier, we are defining new terms.)

Interest-Based Group Targeting: This appears to be the approach Google is taking. Their FLoC technology will target groups of consumers showing similar interests. Advertising investments would be targeting 1000s, maybe 100s of users identified as a prospect because of similar interests.

1: Many: Digital Marketing companies with limited access to 1st party cookie data will have enough data to be able to target the hundreds of devices, maybe the high tens. This is especially true for technology companies who have not leveraged the past few years – when Firefox and Safari initiated the 3rd party cookie deprecation — to proactively address precision and the future.

1: Few: Companies with more access to 1st party data, with identity resolution capabilities, and a proactive approach committed to precision for dealers and privacy for consumers, are developing solutions that further limit that scope. Client Command is positioned to hone its privacy-bundle technology within the Active Shopper Network® to continue targeting in the single digits, when Google flips the switch.

If you’re thinking this must mean you will lose the ability to be efficient in your ad spend, that’s not necessarily true. In fact, it leads to another shift.

Shift towards 1 to Many

3rd party cookies give technology access to online consumer data that tracks web activity and enables technology to build a digital fingerprint. Even with less than sophisticated tech, marketers can get pretty darn accurate using 3rd party cookies – helping everyone, even those with limited marketing acumen, move closer and closer to 1:1. Without 3rd party cookies, that landscape will change. Targeting specific people at the 1:1 level will gradually move towards targeting the many, in some way, shape or form.

Here are a few different paths already beginning to take shape. (And because this is a new frontier, we are defining new terms.)

Interest-Based Group Targeting: This appears to be the approach Google is taking. Their FLoC technology will target groups of consumers showing similar interests. Advertising investments would be targeting 1000s, maybe 100s of users identified as a prospect because of similar interests.

1: Many: Digital Marketing companies with limited access to 1st party cookie data will have enough data to be able to target the hundreds of devices, maybe the high tens. This is especially true for technology companies who have not leveraged the past few years – when Firefox and Safari initiated the 3rd party cookie deprecation — to proactively address precision and the future.

1: Few: Companies with more access to 1st party data, with identity resolution capabilities, and a proactive approach committed to precision for dealers and privacy for consumers, are developing solutions that further limit that scope. Client Command is positioned to hone its privacy-bundle technology within the Active Shopper Network® to continue targeting in the single digits, when Google flips the switch.

If you’re thinking this must mean you will lose the ability to be efficient in your ad spend, that’s not necessarily true. In fact, it leads to another shift.

Shift towards Data Quality

In a world with easy access to consumer data, quantity of data takes center stage. How much do you have and how effectively can you process it? It’s not that quality hasn’t mattered in a 3rd party cookie world, but when the supply valve is cut off and the quantity is reduced, quality gets more attention. (We don’t have to look outside the industry to see how lower quantities of vehicle inventory have shifted focus to quality, and in some refreshing ways!) Similarly, data quality is garnering more and more of the spotlight and could bring even higher overall value to your business.

In automotive, we are protective and I’d argue, defensive about the quality of our data. How many dealerships believe they sit on a gold mine of accurate, up-to-date and comprehensive data repositories, aka their DMS and CRM? I’ve seen enough of these systems to know a typical dealership’s data management does not check all three boxes. So, there is work to do in building a data engine equipped for a cookie-less world.

Here are a few strategies for enhancing data quality:

Identity Resolution: What many dealers don’t understand is that data engines that make precision the most possible even in today’s environment do not rely solely on 3rd party cookie data. Rather, they build robust customer profiles from 1st party cookie data, 3rd party cookie data AND offline data. Dealers should be investing in identity resolution technology, either building it internally (which is cost prohibitive for many) or working with a partner (such as Client Command and our Active Shopper Network®).

1st party data: The first step is building strategies that garner email addresses. The next level is giving a user a reason to create a log-in and use it while visiting your dealership website. This begins to build what you’ve likely heard referred to as a “walled garden”. And no, you will not compare to the size and scale of Amazon, Google or Facebook, but you will enhance the quality and quantity of data being fed to whatever data engine you partner with or build.

In Conclusion

A new world is on the horizon and it was a long time coming. The deprecation of the 3rd party cookie will impact your data and digital advertising strategies. And like all progress, we should not expect the full benefits of this new world to be felt immediately. But, these shifts will not only benefit consumers from a data privacy perspective, they will help savvy dealerships thrive. So, let’s do that.