Third-Party Cookies - BBT Digital
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A Quick Read on
Third-Party
Cookies
Clarity in chaos
Contents Page
3 Introduction
4 First-Party Cookies
5 Third-Party Cookies
7 Cambridge Analytica, The Social Dilemma
and the Growing Groundswell of Public Opinion
9 Third-Party Cookies Equate to Big Revenue
11 Understanding Big Changes
14 What Business Leaders Need to Think About
16 Once You Truly Know Your Data, You Can Protect It.
18 The Experience Customers Expect in 2021
22 Local Proof Points
25 In Conclusion: What It All Means for Your Business
26 Our Prediction
2 | Third-Party Cookies
Third-Party Cookies What are they and why should you care? Everybody loves cookies; from afghans and anzac biscuits, to a chewy chocolate chip or crunchy gingernuts. But over the past 20 years, by far and away the ones we humans have consumed the most of, are online varieties - that is, first and third-party cookies. These kinds of cookies, by definition, are text files containing small pieces of data such as a user ID number and the site name, which enable the site to link your PC to data stored on their system such as a username and password. 3 | Third-Party Cookies
First-Party Cookies While they aren’t as indulgent for sweet lovers, there are some quite tasty facets of first and third-party cookies. Take first-party cookies for instance; often taken for granted, but they bring sweet satisfaction in just how smooth they make our browsing and online shopping experiences, by accessing key pieces of information such as the items we’ve added to a shopping cart, our username/password details, language preferences etc. They’re called first-party cookies because they’re created by the host domain i.e. the website you’re visiting. 4 | Third-Party Cookies
Third-Party Cookies Third-party cookies on the other hand, are created and tracked by a third-party, not the host domain you’re browsing. This happens when the site you’re browsing publishes some script on a webpage for another (third) party. Third-party cookies are mainly used to track your web activity and for online advertising. In addition, many companies also use third-party cookies to provide online chat support through a third-party service. While some internet users prefer to maintain their privacy and data security, so choose to turn off or delete third-party cookies, this does mean their browsing experience isn’t as customised. For example, if you changed your status in social media to ‘engaged’, all of a sudden you’d get served ads for all sorts of wedding paraphernalia - this means ads you see are 5 | Third-Party Cookies
personalised, relevant, and possibly even helpful. It certainly offers something for the keen bride or groom to sink their teeth into! Third-party cookies have been good for business too, generating a swag of advertising revenue, and many platforms offering sophisticated targeting capability have been able to charge a premium for their advertising space. This has proven to be a very effective advertising channel for many companies, and in NZ there have been significant changes in media spend as clients have taken funding from traditional TV, radio, newspaper etc., and place a growing proportion of spend into targeted, digital advertising - based on using third-party cookies. However, there is a groundswell of opposition to third- party cookies and big businesses are starting to make significant moves against them. As a business owner, this is something you need to be aware of and understand, as it’s likely you’ll need to make some changes to protect your business. 6 | Third-Party Cookies
Background Cambridge Analytica, The Social Dilemma and the Growing Groundswell of Public Opinion Cambridge Analytica maybe sounds familiar? You may recall the name of this political data-analytics firm after it was involved in a scandal with Facebook in 2018. In short, Cambridge Analytica was found guilty of improperly obtaining data from over 87 million Facebook users - this data was used by Cambridge Analytica in high profile events such as the 2016 Trump campaign and Brexit. 7 | Third-Party Cookies
The Cambridge Analytica scandal was well publicised around the world, bringing the topics of personal data and information security into everyday conversation. No longer were these concepts something only IT people or conspiracy theorists discussed, with households across the country starting to debate the pros and cons of this activity. Whilst momentum within mainstream media died down on the topic, the incident left many feeling more wary of giving out their personal information. Fast forward to 2020 and the topic is back on the radar, with the release of The Social Dilemma on Netflix - a docu-drama covering social media and the way these platforms exploit their users. This show became a hot talking point particularly amongst families with teenage kids, who are heavy social media users. This brought questions to the surface again about what personal information we should share, and how this may be used by others for their personal gain - and whether this is to our own detriment or benefit. 8 | Third-Party Cookies
Third-Party Cookies Equate to Big Revenue While social media and third-party cookies are entirely different topics, social media platforms commonly harness third-party cookies to add oomph to their data analytics and profiling. By tracking browsing history and understanding what a user is interested in, what they’re watching, what they’re looking up on Google etc, they form a comprehensive view of that user. This information makes it easier to target advertising messages to people with particular profiles and interests. The more effective this targeting, the more valuable the data. Social media companies have the inside scoop on our interests just by looking at who we choose to follow and interact with, so further harnessing third-party cookies to collate richer user profiles allows these companies to make huge profits from our online behaviours. As much as personal awareness plays a part, there is a lot of social expectation to partake or be left out, when it comes to social media usage. In using these platforms, the issue is we don’t get any say in how our data is used or not - there’s no ability to opt out. 9 | Third-Party Cookies
But now some notable changes are happening to further support the privacy of individuals and provide more choice when it comes to the collecting and sharing of our personal data. 10 | Third-Party Cookies
Understanding Big Changes Apple iOS14 and the NZ Privacy Law updates. Apple is leading the charge in a recently released iOS 14 update, which includes a new privacy initiative requiring consumer permission to track user data across applications owned by different companies. So, at a device software level, third-party data can be blocked by the user. Apple’s revenue currently comes from device sales and subscriptions - not from selling customer data or advertising. So taking this position doesn’t negatively impact Apple’s bottom line, and may give them preference amongst individuals looking for greater privacy. Compare this to the likes of Google and Facebook, whose revenues do rely significantly on advertising and the use of personal data. The government’s been working on our privacy too, and New Zealand’s new Privacy Act came into effect in December 2020. Notably, the changes include: 11 | Third-Party Cookies
Notifiable Events
A breach causing (or likely to cause) serious harm
needs to be notified to the Privacy Commissioner
and the affected individuals. Failing to do so, may
result in fines of up to $10,000.
Disclosing Information Overseas
An organisation or business may only disclose personal
information to an agency outside of NZ if the receiving
agency is subject to similar safeguards to those in
our Privacy Act. If not, the individual concerned must
be fully informed that their information may not
be adequately protected and they must expressly
authorise the disclosure.
Extraterritorial Effect
Overseas businesses and organisations which ‘carry
on business’ in NZ will be subject to our Act’s privacy
obligations, even if they do not have a physical
presence here. This impacts offshore businesses
such as Google and Facebook.
New Criminal Offences
Misleading an agency to access someone else’s
personal information, or destroying personal
information knowing a request has been made
to access it, are deemed offenses and subject to
fines of up to $10,000.
Unnecessary Identifying Information
Businesses and organisations should not collect
identifying information where it is not necessary.
12 | Third-Party CookiesIn short, there are serious implications here for any New Zealand business or organisation collecting or holding personal information, and we all have a legal and ethical obligation to ensure our people and systems are upholding the provisions in the NZ Privacy Act 2020. This is becoming more widely discussed at the executive and board level with directors now being held accountable - the law enables prosecution of directors for neglecting their security and privacy responsibilities. Companies can be fined for breaking the law, but potentially more harmful, are the damages to a brand’s reputation. Protecting your data is protecting your business, so what should you be doing to secure your business data? 13 | Third-Party Cookies
What Business
Leaders Need
to Think About
First things first, understand your data.
Your team should know the answers to
at least these questions:
What data do you hold on your company? On your
customers? On other individuals e.g. prospective
customers, suppliers, staff?
What data do you hold that is personally identifiable?
Where is the data stored - in a single place or across
multiple systems?
Who is responsible for maintenance and security of
these systems?
Who has access to the data across these systems?
Do these individuals know how to handle the data
appropriately? Is training required?
14 | Third-Party CookiesWould you know if there was a breach? How? Is there a process
to manage and report breaches? What does your organisation
do about near misses?
Have you outsourced services or data management? You’re
still responsible for data security and privacy so can you
answer the above questions for any of your data being held
by a third-party?
Depending on your starting point,
this may seem like a lot to consider.
However, smart businesses have
been on top of their customer data
for years – knowing what data you
have, treasuring it, and harnessing the
insights from this information enable
you to put your customer’s experience
at the heart of your decision making.
15 | Third-Party CookiesOnce You Truly Know
Your Data, You Can
Protect It.
1. Understand 2. Protect
Know your data inside & out Identify the risks to this data
3. Roadmap 4. Plan
Build a roadmap to better Have an up-to-date plan
manage and protect your data for privacy breaches (do you
against these risks need to consider insurance
for breaches?)
16 | Third-Party CookiesRemember, breaches do happen and they happen a lot, and not just to big global names like Facebook, Google and Microsoft. Even recently, the NZ Stock Exchange was down for four days and our own Reserve Bank was attacked at the start of 2021. But most privacy breaches don’t make the headlines despite the negative impacts to the business and it’s customers. Even more reason to be prepared and have a plan. When it comes to risk, some common systems that immediately spring to mind are your accounts and CRM systems, as both hold confidential customer data. Another area that many organisations overlook initially are purchased lists. It’s still relatively common for marketing and sales teams to buy lists for use in customer acquisition activity. For example, lists of non-customers can be sent targeted offers via direct mail, or contacted directly over the phone or by email with special offers, all in the hopes that these non-customers can be converted to customers. If your organisation has been using these sorts of lists, you need to treat them the same way as any other personally identifiable data. It’s not all stick though, with plenty of carrot on offer for your bottom line. As well as doing the right thing, when you get to really know and understand your data, you start to uncover valuable insights into how your business really runs and where the opportunities exist for improvement. Harnessing your business data can return valuable operational efficiencies, and by lifting the customer experience you can increase customer loyalty and spend. 17 | Third-Party Cookies
The Experience Customers Expect in 2021 The speed of change in this space has only accelerated in 2020 due to the global pandemic and it’s fair to say consumer expectations have gone truly digital - that is, consumers now expect organisations to be able to service them in a completely online manner. While industries like retail and banking have strong histories in providing a digital customer experience, many businesses and organisations are under-developed in this space, still relying on more traditional methods for interacting with customers. Despite hopes of COVID-19 being eliminated, the convenience and flexibility of a digital customer experience has become even more entrenched over the last year. To satisfy customers and achieve growth, businesses that haven’t already, will need to adopt digital solutions for sales and customer care. Paradoxically, while this may mean fewer in- person interactions for some businesses, moving to a digital customer experience can actually enhance the humanness of the interaction. How does that work? 18 | Third-Party Cookies
Digital setups can invoke a
more humanistic interaction
A cohesive setup of your digital systems can
provide a more seamless interaction for your
customers than they’re getting across traditional
business structures which are limited by various
systems capabilities and the roles, responsibilities
and permissions of different team members.
When someone interacts with your business,
they don’t think they’re having a series of separate
conversations with you, it’s all one discussion
focused on trying to solve one problem. Historically
business structures and systems haven’t supported
this, but that’s changing with so many technology
solutions available to help businesses take a more
conversational, human approach to the customer
experience they deliver. People are not only open
to interacting with your organisation over digital
platforms, they expect the ability to do so.
19 | Third-Party CookiesNot only does this make life easier for staff and customers, it gives the business an end-to-end digital view of the customer interactions. Think of the insight that offers you operationally, and how that could translate to a better customer experience, increased loyalty, happier staff etc. What’s more, a digital customer experience is far more scalable than relying on individual sales people to know and remember details. Structured databases help your whole business get closer to the customer. Customers do have high expectations and to deliver to these you’ll need more than just one team owning the customer experience. It’s no longer just about the sale, the after-sales servicing is what drives happy customers, great ratings and referrals, and repeat purchasing. If they’ve made the decision to share personal information with you, make it worth their while! Customers are becoming more and more choosy about who they share what data with but one thing is for sure, they expect that if they’ve shared their information with you, that you’ll not only put it to good use, but you’ll also respect their privacy and keep the data secure. 20 | Third-Party Cookies
Hello, you’ve reached customer support, how can we help you today? 21 | Third-Party Cookies
Local Proof Points Vodafone NZ is a customer focused organisation - they haven’t always delivered to their lofty goals and lots of articles have been published about new systems and approaches the company has implemented to keep growing their capability (and results) in this area. A few years ago Vodafone NZ realised it had to improve the productivity of its team members - the answer was to deliver a more seamless customer experience. They implemented a new digital system which consolidated customer information from several legacy systems into a single repository, giving staff more visibility of every single customer interaction, and accurate, up-to-date details on all of the customers’ services - a single view of the customer! The results? As well as increased productivity amongst call centre team members, customers’ enquiries were able to be handled significantly quicker. It’s no surprise customers started scoring Vodafone NZ higher on the quality of service provided. 22 | Third-Party Cookies
The decision to position itself as one of the most customer-centric companies in New Zealand, is why Air New Zealand is held in such high regards by Kiwis. Some years ago under the leadership of Sir Ralph Norris, the company went through a dramatic culture shift from "we fly planes" to "we fly people", catapulting Air New Zealand from the brink of insolvency in 2001 to one of the most innovative and profitable airlines in the world. The customer mindset is ingrained into the culture with customers at the heart of everything they do. They regularly win ‘Airline of the Year’ (airlineratings.com) with world-leading customer innovations such as the self-service kiosks and biometric bag drop for a faster check-in, and the Airband which tracks progress of unaccompanied children as they travel, and updates their guardians. It’s no secret Air New Zealand have invested heavily in technology to deliver improved customer experiences - and this customer focus continues to deliver positive results for the business. With nearly 300 retail outlets across Australia, New Zealand and Canada, Michael Hill always recognised that a great in-store retail experience helped drive customer loyalty. They needed to make their shipping and warehousing processes more efficient in order to deliver the customer experiences they envisioned. 23 | Third-Party Cookies
Implementing new cloud based systems immediately gave the team more visibility of its supply chain and inventory availability. So when COVID-19 struck and many stores were temporarily closed, Michael Hill was able to manage each retail store as a warehouse location for customers ordering online and picking up at a local store or requesting delivery. The company benefited, not just during lock-downs, from increased efficiency, improved margins and stellar customer experiences. 24 | Third-Party Cookies
In Conclusion: What It All Means for Your Business It’s simple - you need to have a plan to manage your data. Breaches are happening all the time and if you’re prepared, they’re much less debilitating. The smart way to get started is by understanding the customer journey, as that way you also get the benefits of understanding the effectiveness of each interaction and where the opportunities exist to improve things. Get close to your customers If you haven’t already, map out your customer journey from both your perspective as well as theirs. This helps you identify all of the information that’s passed over, and where it’s going. From there you can make a plan to both secure and protect it. Have a data strategy This is the point at which you have the opportunity to get ahead of the competitors - now you know what data you have, think about how you analyse and learn from it. Creating regular visibility of this information 25 | Third-Party Cookies
is where you create the win-win - information you already had can now be used to discover trends and changes, generating valuable insights. Insights that can be harnessed to save time and effort for both your customer and your own organisation. Our Prediction Businesses that embrace the customer journey and have a data strategy will win over time. Like any relationship, the more effort you put into it, the stronger it becomes. The only difference in this era, is that the effort isn’t best when put in by individuals, but through smart technology which enables you to scale quickly and move at pace. Great customer relationships help your business grow - not just from loyalty and repeat custom, but also by helping you attain new customers. Without third- party cookies and data, targeting new prospects will become far more challenging and many organisations will need to rely more heavily on testimonials and referrals, as well as classic mass advertising. 26 | Third-Party Cookies
Let’s talk!
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beautifully smart and impactful digital solutions.
09 930 6293
mike@bbtdigital.com
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