Brands Need New Answers As Consumers Shun Cookies

In the past, consumers didn't get much of a choice about sharing their data. Visit a website, and it may studiously monitor your clicks behind the scenes. Leave the website, and it could still follow you all around the web. Return to the website, and be punished for showing too much interest or embracing competition.

All that has changed since the introduction of data protection laws in Europe and with the demise of third-party cookies (Google is phasing them out this year, the last of the major participants to do so).

With these changes, website owners must seek permission from visitors to track data that isn't strictly necessary for their sites to function properly - and websites are not allowed to (and often unable to) harass consumers with ads once they've left their site.

The EU's General Data Protection Regulation (GDPR) law has been in place since 2018 and has applied to both companies based in the EU, and to any American companies serving consumers in the EU. Now, similar data privacy laws are coming into effect across the United States, meaning these rules will also apply to most domestic companies.

Cookies leave a bad taste

As companies comply by adding cookie permission banners to their sites, they might notice a dramatic dip in the amount of data they're able to collect. In the U.K., where consumers are accustomed to having to opt-in to cookies, 63.0% of consumers decline at least some of the time, while 35.0% decline habitually. Gen Z consumers (aged 18-25) are least willing to give their permission: 43.1% opt-out of first-party cookies "always" or "most of the time."

It's an illuminating glimpse into the future for U.S. companies. While these requirements are still at their nascent stage in America, we can already see a similar response from consumers here. Attest's most recent research finds that nearly a third of Americans will not give permission for cookies when asked by a website.

The likelihood to opt-in can be influenced by the type of website, with some deemed riskier than others. For example, 47% of consumers would deny cookies on social media sites, where they know their data could (or likely will) be sold-on to advertisers and potentially beyond.

Americans don't (yet) trust companies with their data

A primary reason that consumers are reluctant to opt-in to first-party cookies is that they don't want to be targeted with advertising (36.6%). But they also have serious trust issues when it comes to data sharing. More than 36% of respondents decline cookies because they don't simply trust the website or the brand with their data.

"Creepy" behavior by advertisers and conspicuous cases of data breaches -- releasing vast volumes of consumers' closely-held personal data to unknown attackers -- make sharing data and trusting websites ever more challenging.

If we zoom out and look at how Americans feel about data privacy overall, we find that an overwhelming 84.1% of people are concerned about it when interacting with brands online. Even Gen Z digital natives feel strongly about it (82.7% are concerned).

This lack of trust also makes people reluctant to share their email addresses by subscribing to brands' mailing lists. Just over 85% of consumers opt-out of being added to a company's mailing list at least some of the time, while 58.0% say they opt-out habitually.

Finding a new data source

The big issue for brands is how they replace the data that's no longer being collected from their websites - and how they can accurately target consumers with advertising without access to digital dossiers and detailed diagnosis about individuals' web browsing habits.

Companies will have to build up a picture of their consumers in other ways, new ways, and more "classical" ways (think more Mad Men, than The Matrix). In Attest's report The zero-party data revolution, we look at how zero-party data can fill that gap.

The term "zero-party data" was coined by Forrester Research, and it refers to data that a consumer "intentionally and proactively shares with a brand." They share this data voluntarily, through interactive methods like consumer surveys and online forms. This happens with full transparency, awareness, and consent from consumers (the exact opposite of how the third-party cookie monsters eat up every available datapoint).

Our research finds that Americans are much happier to share their data actively than through passive data collection methods. Nearly 48% would prefer for a brand to capture their data via a survey, in comparison to only 18.8% who prefer cookies, and 18.4% who favor social media monitoring.

The zero-party data goldmine (is also the only choice)

Collecting data through consumer surveys opens up all sorts of possibilities. It gives brands the ability to actively engage target customers on a wide range of topics, instead of having to rely on web visitors' clicks and related inferences for insights. With zero-party data, brands can build fully-formed and entirely customized customer profiles, to make their advertising far more effective.

And there are other benefits, too. Using transparent methods to collect data appears to provide brands with a halo effect. Nearly half of consumers trust a brand more with their data when asked actively to share data (with transparency on where it goes and how it's used), and 57.8% would feel more at ease using the brand's website.

In the modern world, brands benefit from gathering data actively, not passively

This increased trust has a knock-on effect, making nearly 50% of consumers more likely to take actions that help marketers - for example, opting-in to a brand's mailing list. So, not only are consumers happier to share the data that helps brands target them with marketing, but they also become more receptive to marketing and brand love in the process.

The next steps for brands and marketers are simple: embrace transparency, tell consumers where the data goes and how you'll use it, and show consumers the benefit of choosing to share data. These are the choices consumers now make when they visit your website; help them make a win-win choice.

Jeremy King is the CEO and founder of Attest.