As third-party cookies fade, the cold start problem becomes an opportunity

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This article was contributed by Alexandre Robiquet, CEO and co-founder of Crossing Minds

We’re all aware of the immediate popups on the websites we visit: Will we accept all cookies, including third-party cookies? The answer is usually quick but reluctantly yes. Without accepting third-party cookies, we will not be able to interact meaningfully with those sites. But with the rise of new consumer data privacy laws, this popup has come to represent more than just an agreement. It symbolizes the huge, pressing challenge that is now plaguing online businesses: “Cold Start.”

Cold Start – Often referred to as Cold Start Problem – An event in which businesses do not have the right technology to deliver truly personalized online experiences for new or anonymous users. This is due to the lack of current information on those customers’ past purchases or preferences. When a customer first enters a website, any “personalization” that the customer sees is not really specific to them. But the stakes are high: in an ecommerce landscape where consumers expect tailored experiences for them, the lack of meaningful personalization when it comes to conversions and revenue can have dire consequences. In fact, 91% of today’s customers say they shop with brands that offer offers and recommendations that are relevant to them – but on average, 68% of visitors to the site are new users.

Over the past two decades, businesses have been trained to believe that a third-party cookie – a vehicle through which to access customers’ personal information – is the best way to overcome a long-running cold start problem. Unfortunately, this strategy has also opened up new cans of worms, resulting in customers who either feel espionage due to ultra-personal recommendations or who become frustrated with poor recommendations based on their age or gender. In both cases, allowing third-party cookies to extract personal information is a sacrifice that consumers have been making for years, without fully understanding the results.

But things are changing. The power of third-party cookies is rapidly declining due to continued tightening of consumer privacy laws, such as the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR). Facebook made headlines for its loose privacy protection that led to the Cambridge Analytica scandal. And Google has announced plans to phase out its use of third-party cookies in Chrome by the end of 2023.

Customers are also fed up with third-party cookies; A recent survey found that 86% of consumers feel increasingly concerned about their data privacy, while 40% express a lack of confidence that companies will use their data ethically. While first-party cookies – which are stored directly through the website visited by the consumer – can help create a solid customer experience without disclosing users’ data, third-party cookies pose a clear threat to their privacy. Is.

Clearly, keeping private information private is no longer just a service to customers – it is essential to a business. Yet, after their trial-and-true, cookie-centric strategy slipped under their feet, companies are scrambling to pivot.

A change in mindset is needed. Businesses should adjust their thinking to the cold start and no longer see it as a problem, but accept it as an opportunity. Critically, this does not require major changes to the current platform architecture to accomplish. By simply embedding technology like AI into the platform, businesses can get started with customers and personalize seamlessly at the outlet – all without asking for their private information.

How does this work? Instead of focusing on WHO There are customers, companies should focus What They are doing it once on the website. With increased access to live data through interactions on platforms such as short quizzes or clever content filtering and product indexing, businesses can understand what consumers really want and deliver instant exciting experiences.

Encouraging early insights about customers will help paint a more detailed picture of what they want in the future, allowing companies to add more value. True Personalization for each customer touchpoint – website, email and beyond. Ultimately, this will result in better relationships between businesses and their customers.

Language selection is also important. We usually classify something as a “problem” when no better option is available – hence the cold start “problem.” But today, there is a better alternative to traditional methods of personalization: accepting cold start as a secret weapon to improve customer experiences and build long-term loyalty.

We stand at the beginning of a turning point. The demise of third-party cookies is ready for a change in how companies interact with their customers, and it all starts with a cold start – once there was a problem, now there is an opportunity.

Alexandre Robiquet is an experienced AI scholar and CEO and co-founder of Crossing Minds.

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