The future of online shopping will be greatly affected by the upcoming shift to a cookieless environment in digital marketing. This means that you will have to adjust your strategies and find new ways to make PPC campaigns successful, as the way user data is collected and tracked will change. To understand the significance of this shift, let’s take a closer look at first-party cookies and how you can use this data for better PPC campaigns.
The Data Collection Challenge
Why is first-party data important? There’s a growing challenge that e-commerce businesses are facing due to the gradual demise of third-party cookies. The latter has been the backbone of online advertising and third-party cookies are being phased out due to increased user privacy concerns and the tightening of data protection regulations. As a result, you can no longer rely on third-party cookies for tracking user behaviour and retargeting.
The move towards a future without third-party cookies highlights the significance of using first-party data for successful PPC campaigns. With restrictions on third-party data, the importance of first-party data keeps growing. So what’s ahead for the e-commerce businesses in the cookieless world, especially for the success of their PPC campaigns?
What the Future of E-Commerce Collection Holds
Looking ahead, it is evident that the future of PPC will be marked by significant transformations, each with the potential to reshape the way businesses approach digital marketing. Three trends will shape the future of e-commerce and PPC advertising.
- a more widespread automation
- a more precise and granular audience targeting
- the full adoption of first-party data collection.
One of the most prominent changes on the horizon for PPC is the widespread adoption of automation. Automation has been steadily gaining ground in the digital marketing realm, and it is poised to play a central role in the future of e-commerce collection. Automated advertising systems and AI advertising solutions are designed to streamline and optimize various aspects of PPC campaigns, from bid management and market expansion to ad creative optimization, including ad copy optimization.
Check these blog posts for more automation tips for ad optimizations and lead generation:
Precise and Granular Audience Targeting
Another crucial aspect of the future of PPC is the emphasis on more precise and granular audience targeting, with an increased role of ad personalization. This is especially important because people’s attention is spread out across different online platforms and devices.
You will need to use data and segmentation more and more. This means you will need to collect information from the interactions with customers to understand how they behave and what they like. Previously, this used to be a time-consuming process, but with the emergence of AI, it became much more streamlined.
With AI-powered audience segmentation and predictive analytics, you can find and target very specific groups of people.
Full Adoption of First-Party Data Collection
As was mentioned, online privacy is becoming more important. That is why third-party cookies are dying out. It is crucial for businesses to set up both efficient and ethical (compliant) flows and tools to collect their own data. So, you will need to:
- invest in technology that helps organize and analyze the data coming directly from your sources
- be transparent with customers about how you use the data and follow privacy laws to build trust.
Now, let’s talk about first-party data collection in more detail.
What is First-Party Data?
Let’s define our terms first.
- Zero-party data is the data that customers choose to share with you—you can get it from quizzes, website activity, customer profiles, etc, provided no consent is needed from the users to share the data
- First-party data is the data about your customers collected from your own sources (storefront, etc.) with the obligatory consent from the customer
- Second-party data is the data your business partner gathers and shares with you
- Third-party data is the data collected by one party and sold or shared with you.
So, first-party data is information that you collect from your own sources directly from the users. First-party data examples include such details as
- contact details
- website interactions
- purchases, etc.
Again, all the above data is shared with the e-commerce business with the consent of the customer, so it is important to ensure the ways it is shared are compliant.
How is First-Party Data Collected?
First-data collection does not start and end just on your website. E-commerce companies capture first-party data in various ways, including
- analytics systems (e.g. Google Search Console and Google Analytics 4)
- mobile apps
- text messages
- social media.
To make sense of this data, most companies use a tool called a Customer Data Platform (CDP), like Salesforce. A CDP smoothes the process of first-party data capture and brings all the company’s data together in one place, helping them understand their customers better and improve their marketing efforts.
Benefits of First-Party Data in the Cookieless World
First-party data wins over third-party data for important reasons:
- Improved targeting. By using detailed customer information, you can create targeted PPC campaigns. This means your ads are more likely to reach the right people at the right time, increasing the chances of conversions.
- Personalization. With first-party data, you can personalize your ad copy and landing pages to better connect with your audience. Personalized ads perform better and lead to higher conversion rates.
- Enhanced ad relevance. When your ads closely match search queries and user intent, Google rewards you with a higher Quality Score. This can lower costs per click (CPC) and improve ad placement.
- Reduced ad spend. By targeting the right audience with the right message, you can reduce ad spend on irrelevant clicks, ultimately improving your return on investment (ROI).
The cookieless world is bringing a significant change in online advertising and user data tracking. With the decrease in third-party cookies, you need to comply with stricter privacy regulations and user preferences to improve your reputation and customer trust. This change will prompt you to prioritize the creation of first-party data through consent-based interactions, which will help you build stronger customer relationships. You can also use innovative methods for personalized marketing, such as contextual advertising and AI-powered recommendation engines, to ensure a more sustainable and efficient advertising environment.
First-Part and Third-Party Data: What is The Difference?
First-party data offers higher accuracy, relevance, user trust, control, data enrichment, and the ability to build long-term customer relationships. Here’s how it compares to third-party data.
First-party data, collected directly from interactions with your own audience, is highly accurate and reliable, reflecting real customer interactions. In contrast, third-party data obtained from external sources is often less accurate and lacks depth and context.
First-party allows for a granular understanding of customers, resulting in personalized marketing campaigns. Third-party data, on the other hand, is generic and lacks the depth required for effective targeting.
Using first-party data is generally compliant with privacy regulations and builds trust with customers. In contrast, the use of third-party data raises concerns about privacy and consent, potentially leading to legal challenges and eroding user trust.
E-commerce businesses own and have full control over their first-party data, allowing them to manage and protect it according to their privacy policies. Third-party data, however, is owned and controlled by external entities, making businesses reliant on these sources vulnerable to changes and restrictions.
First-party data can be enriched with additional information over time, enabling more accurate audience segmentation and personalization. Third-party data lacks the flexibility for easy enrichment, limiting the level of personalization achievable.
Collecting and using first-party data makes it easier to build long-term customer relationships. Tailoring messaging to customer preferences creates a personalized shopping experience that encourages repeat business. Relying solely on third-party data may result in fewer personal interactions and lower customer loyalty.
How to Use First-Party Data
Let’s talk about the necessary steps necessary you need to take to start using first-party data. The whole process is broken down into two phases.
- Preparation. At this phase, you need to develop your first-party data strategy.
- Implementation. This is where your first-party data plan comes into action.
How to Set Up First-Party Data Strategy
To use first-party data for marketing, you need a plan. Follow these steps:
- Define the goals for first-party data collection. Before gathering data, it is crucial to decide how it will be used to help marketing goals. Some possible uses include increasing brand awareness, preventing customers from leaving, targeting potential customers, and launching customized ads.
- Understand what data you collect, where you collect it, and how you collect it. Just knowing what information you gather, like demographics, product interest, or internet use is not enough. Understand where exactly and how you collect data. Define the sources, from which the data will be coming, and choose first-party data collection techniques that suit the purpose.
- Set up PPC bids and targets. Create PPC bids and goals using Google’s Smart Bidding strategies like Target CPA, Target ROAS, Max Conversions, and Max Conversion Value. Analyze your campaign using first-party data before refining your smart bidding targets. Instead of only using website conversion data, connect your CRM data with Google Analytics for more precise smart bidding targets that show how pay-per-click activity affects your profits.
- Make a checklist. Meet with your team, set goals, and create a list of improvements. This lets you focus on one issue at a time.
- Divide tasks and assign roles. Assign teams to handle each problem, like customer service or advertising. Make sure everyone can access data and work efficiently.
Steps to First-Party Data Activation for Better PPC Campaigns
Now, that you are prepared, you can proceed to implement your first-part data strategy. To do that, you will need to
- divide your data into groups to create personalized ads for each audience—divide your first-party data into specific groups based on demographics, behavior, or purchase history. This allows for more personalized ad campaigns
- follow data protection regulations and be transparent with user data to maintain customer trust
- create ad copy and landing pages that match each audience’s interests and language.
- start using a combination of platforms like Google Analytics, your CRM, and other systems, as well as data collection platforms and AI engines to get the most transparent data picture possible—integrate this data into your PPC platform, like Google Ads, for better targeting
- take advantage of features like Customer Match in platforms like Google Ads—upload email lists and directly target specific customers, especially those who have engaged with your brand before
- continuously monitor and improve your PPC campaigns by testing different strategies and adjusting bidding schedules.
You must prepare for a future without cookies. You need to use your own data and adjust PPC campaigns to succeed. This change is a chance to make personalized and effective ads. Third-party cookies won’t work anymore, so you should collect and use your own data to do well in the future.