Redefining Digital Engagement in a Cookieless World: The Power of AI and Zero-Party Data

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Navigating a New Digital Landscape: The Decline Of Cookies

One long-anticipated change for digital marketers is finally taking center stage: third-party cookie deprecation. These powerful bundles of data play a pivotal role in marketing and advertising by tracking user activities such as preferences and browsing habits.

For years, the industry has relied on third-party cookies to shape digital engagement with customers. In 2022, 75% of marketers reported they heavily rely on the approach, with 45% adding they invest at least half of their marketing budget on cookie-based activities (Statista). 

As we witness the cookie crumbling to nonexistence and as governments around the globe scramble to regulate rapidly advancing AI technology amid intensifying pressure for stronger consumer data protection, marketers are presented with a critical opportunity. This pivotal moment means re-evaluating how data is used in digital engagement strategies, setting the stage for more dynamic and impactful approaches. 

With Google’s cookie deprecation already underway, the time for businesses to start planning is now.

Embracing New Data Strategies: Beyond Third-party Cookies

The evolution of data strategy in marketing requires a deeper focus on first-party and zero-party data. First-party data encompasses information collected from direct interactions and behaviors of consumers with a company, such as transactions, account creations, and website visits. It provides a comprehensive view of customer behavior, including both active engagements and observed actions. First-party data can also establish a personal identity where the user provides an email address or contact information.

In contrast, zero-party data refers to information consumers deliberately and proactively share with companies, indicating their preferences, interests, and needs – but is often non-identifiable. This explicitly shared data often occurs through consumers entering search queries, engaging in chat sessions, or any other directly provided data.

Many companies have expressed the desire to increase first-party data, matching up behaviors and identities for consumers who engage with their brand. Unfortunately, this process can often cause significant friction for consumers before they’ve gotten any real value from their interactions. Just think of every website that asks you for your email address when you land on their site. Like any relationship, trust must exist before a brand can successfully gather first-party data that helps establish the consumer’s identity. There will always be a delicate balance marketers must strike between personalization and privacy.

And there is a better way.

Marketing & Game Theory: Zero-party Data 

Game theory offers an interesting lens to consider the evolving approach to consumer data in digital marketing. By differentiating between discrete and continuous games, we gain insights into consumer interactions and their opportunities for deeper engagement.

Clicks, dropdown selections, and ad clicks can be considered discrete games, each action like a separate turn in a board game. Whenever a customer clicks on a menu or interacts with a site, it’s a distinct move. These actions are measurable and provide marketers with data, but often, that data is only measuring the moves that the consumer can make. This data lacks consumer voice.

Searches and chat interactions represent continuous games or ongoing conversations with various paths. What can start as a simple query can evolve into a series of searches, each influenced by the results of the last. Unlike the single moves in discrete games, continuous games are dynamic, each step influenced by the previous and shaping the next. This evolving nature of searches and (AI-powered) chats offers a complex understanding of customer intent.

AI will help marketers finally engage in continuous games, enabling brands to respond to anticipate and guide consumer interactions.

The goal of marketers should be to invite consumers to ask the brand questions, have a chat, and to share with them as many direct answers as possible… before asking for any first-party data.

Building Trust via AI-driven Dialogues 

People build trust with each other through meaningful dialogue. When consumers ask a brand a question and get an honest and direct answer, they share zero-party data (via the query or chat), and the brand can personalize the experience in their response. This approach ensures quality interactions over simple clickstream data or impressions.

The ability of the AI to “keep the conversation going” opens the opportunity to “suggest” to customers additional products or services that are appropriate to the dialogue. These real-time dialogues allow for better comprehension of consumer needs and tailored solutions. 

Afterall, the point of a continuous game is to keep playing.

While the best interactions between brands and consumers will always be face-to-face, human-to-human, AI-powered search and chat capabilities are helping marketers scale at least initial dialogues to help consumers faster. Once trust is gained through this, they can then ask the consumer for a piece of first-party data.

Preparing For The Future: A Fresh Perspective On Digital Marketing

Cookies were creepy. We all know that.

It’s a crucial time for brands to reconsider how they engage with their target audiences and earn customer trust. Surveillance is unnecessary and often provides marketers with the wrong data with which personalization was misguided.

While we as a society often speak of the underlying consumer concerns with AI and the privacy risks it presents, the rapid advancement of technology is the key to a fresh industry outlook that prioritizes the consumer. Combined with a first-party data strategy, marketers have an opportunity to pave the path for personalized customer experiences that respect privacy while also delivering on brand engagement and overall business goals.

About the Author

Christian J. Ward is the Executive Vice President and Chief Data Officer at Yext.

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