By Andy McNab, VP EMEA, Fanplayr
After Brexit and the upheaval of the pandemic, brands want to capitalise on the significant increase in online sales that has been such a major feature of the last 15 months.
On the face of it, there is little to worry about. Online accounted for a record 35 per cent of retail sales in January, according to the Office for National Statistics, while market data company Statista estimates growth will continue at 3.5 per cent per year.
Now, however, brands face another big disruptor – the decision to axe third-party cookies by the big browsers. The decision comes fully into force next year when Google joins Safari and Firefox in pulling plug on third-party cookies. It will effectively end the flow of data that has enabled personalisation, optimised website interactions and driven internet advertising. It is no comfort that the browser companies have acted to be certain of compliance with privacy and data protection legislation such as the EU’s GDPR (General Data Protection Regulation) and the CCPA (California Consumer Privacy Act) in California.
This does not make it easy to address the continuing challenges of e-commerce. Although the UK has the most advanced eCommerce market in Europe, basket abandonment rates are still as high as 75 per cent and brand competition is fierce. It remains tough to convert website visitors into customers. Statista says globally in 2020, 88 per cent of online shopping orders failed to convert into purchases.
If brands turn to their advertising partners to navigate them through this stormy sea, they may find they cling to traditional PPC and SEO tools. The adtech and martech industries are still adapting, even if they claim to be cool with Google’s move. Perhaps they are waiting to see what emerges from search behemoth’s Privacy Sandbox – a test-bed for “personalisation that also protects user privacy”. Google has, however, acknowledged the potential impact of its actions. Analysis by the company of the 500 largest Google Ad Manager publishers globally over three months found that where no cookie was present, revenues fell by an average of 52 per cent compared with traffic where there was a cookie.
This may seem like an insurmountable crisis, but it isn’t. Ad agencies that are more advanced in their understanding of e-commerce technology are already grasping the full potential of the first-party cookie when it is allied to AI-driven behavioural analytics.
A first-party cookie is generated whenever a consumer visits a brand’s site. This cookie stores only the unique ID of the user so is not affected by privacy restrictions, remembering each visitor and their visit but without using any other information. It may not track a consumer across the web as a third-party cookie does, but it enables a brand to track what a visitor does on its own site, including dwell time, speed of movement and page views, as well as more obvious features such as interest in specific products. Historical data added to the analysis includes what customers did on previous visits and the interval between those visits, establishing patterns where possible.
AI makes this data actionable, enabling fast, real-time interactions that increase conversions by more than 100 per cent and drive up average order values substantially. It enables brands to intervene with an offer or recommendation that is both relevant and perfectly timed.
Brands can work out what works best with individual customers and set rules that automate the right offer or recommendation. Because it recognises the consumer on each visit, it is not a technology that wastes resources and undermines profitability with blanket discounts. A brand can limit the use of discounts and offers to consumers in return for a positive action such as placing an item in their basket. Or it can target those who are displaying “Exit intent” in their behaviour but are identified as potential buyers from previous transaction history.
With an integrated platform, brands can also use behavioural data to personalise marketing content in SMS messages and emails they can send to consumers who consent, which delivers far better results through precise targeting.
This coupling of first-party cookies and AI delivers a solution that is faster, more accurate and responsive than existing technology relying on third-party cookies and far less reliant on rigid profiling. It is also much more effective at boosting the bottom line.
With the end of third-party cookies looming, brands definitely need to up their game, or they risk dependence on outdated techniques employing a mass of undifferentiated consumer data. The exciting momentum in online sales could well be lost unless brands grasp the full potential of behavioural analytics platforms using their own first-party cookie data.