Adobe Study: Brands that rely too heavily on third-party cookies are leaving money on the table today, risking long-term business harm

Image credit: Adobe Stock/Jacob Lund.

While the timeline for the end of third-party cookies remains uncertain, there’s no doubt that deprecation is well underway. And while it’s reasonable for brands to continue using third-party cookies for marketing while they’re still available, many are over-investing in the strategy instead of building new marketing muscles. A new Adobe study finds that companies that aren’t diversifying their strategies are leaving money on the table today, and hurting their chances of gaining competitive advantages in the future.

Our research surveyed 2,667 full-time marketing and consumer experience leaders across eight countries — the United States, United Kingdom, Germany, France, Australia, New Zealand, Japan, and India. While there were some variations between countries, the overall sentiment was substantially consistent between regions: Many marketers aren’t taking the necessary steps to evolve their data strategies, despite serious near- and long-term impacts on their businesses.

Most brands still rely heavily on third-party cookies.

Across all countries, 75 percent of marketing and CX leaders still rely heavily on third-party cookies, and in India and New Zealand, the reliance is even higher (82 percent). Though deprecation is on the horizon, 45 percent of leaders are spending at least half of their marketing budgets on cookie-based activations — and 64 percent actually plan to increase spending on cookie-dependent activations this year.

Companies are leaving significant money on the table.

Eighty-three percent of leaders at cookie-dependent companies say that at least 30 percent of their total potential market is in environments where third-party cookies don’t work, such as social media platforms and on Apple devices, and nearly half say that 50 percent or more of their potential market is in cookieless environments. Beyond the immediate consequences of being unable to reach 30-50 percent of potential customers, the impacts of this mistake will only compound with every passing quarter as the cookieless frontier continues to expand.

The end of third-party cookies will hurt businesses that are unprepared.

An overdependence on third-party cookies is about to backfire on brands — over three-quarters of leaders expect the end of third-party cookies will hurt their businesses, in some cases profoundly: 16 percent said it will “devastate” their businesses, 23 percent anticipate significant harm, and 37 percent predict a moderate negative impact. In some regions, the numbers are more concerning; 80 percent of leaders in surveyed APAC countries (excluding Japan) say the impact of third-party cookie deprecation will have negative impacts on their business with 34 percent of brands saying it will devastate their business.

Ambiguity over cookie deprecation is causing confusion, and in some cases, inaction.

Many companies are now on the path to abandoning cookies: 59 percent of global leaders said they are either accelerating their readiness for a cookieless future or keeping it a high priority. The remaining 41 percent — two out of five leaders — are not. Some say they’re not changing out of a perceived lack of urgency. Others plan to change but are delaying cookieless preparations.

Many heavy third-party cookie users believe they don’t have a choice.

Over half (51 percent) of cookie-using leaders say they view cookies as a “necessary evil,” even though many realize that continued overreliance is a losing strategy for the long-term. Just under half of respondents (49 percent) say they can’t get the resources to evolve their strategies, a number that rises to two-thirds of leaders (66 percent) in Japan.

Customer data platforms (CDPs) are helping brands prepare for a cookieless future, and a cookieless now.

As the world transitions from third-party cookies to more comprehensive strategies grounded in first-party data, companies that aren’t using CDPs – applications that combine first-party attribute, behavioral, preference, and even consent-based data from partners, to create actionable customer profiles — are at a competitive disadvantage. Of companies without CDPs, 40 percent said they struggle to deliver personalized experiences across channels, and 34 percent say they can’t use their marketing investments efficiently. Investing in a durable data strategy is the only way for companies to get a more complete view of their consumers, and create lasting connections built on value and trust.

CDPs are delivering real ROI today.

97 percent of leaders whose companies use CDPs report positive results: 47 percent say they’ve already gained more direct relationships with customers, 40 percent note a rise in customer loyalty, and 33 percent increased the number and value of completed transactions. CDPs also improve internal workflows: 42 percent said CDPs enabled better and faster work across marketing and IT, and 32 percent are realizing more efficient production of ROI.

Move forward now or get left behind.

While marketers’ continued reliance on cookies isn’t surprising, public sentiment and the regulatory environment have shifted — consumers have become more conscious about companies’ aggregation of data, and trust has become the glue that binds customers to brands. Slowly but surely, companies are learning that they must collect data and deliver experiences in ways that build trusted, reciprocal relationships, and give consumers ultimate control over their data, including how their data is being used. The trend is clear: Customers are moving to platforms that are not reliant on third-party cookies, and brands that ignore this trend are leaving money on the table today and putting their businesses in jeopardy in the longer term.

On one hand, competing priorities and a potential recession on the horizon may make it feel hard to change strategies — even those with inherent flaws. On the other hand, overcommitting to a strategy that prevents companies from reaching a growing number of potential customers presents immediate problems for any business, and will make it increasingly difficult to compete moving forward. While a wholesale change in strategy takes commitment and long-term investment, the benefits are undeniable across all currencies that matter — from customer loyalty and satisfaction to a better bottom line.