Cookies are crumbling: First-Party Data is the future of marketing, says Adobe Experience Cloud's Chief Anil Chakravathy

Anil Chakravarthy, executive vice president and general manager of Adobe's Digital Experience business, started at Adobe just months before the global pandemic began. For the next year, Chakravarthy and his team helped marketers adapt to the rapid acceleration of digital-first engagement spurred by the global pandemic. If adapting to 2020's “digital acceleration” wasn’t challenging enough, now there's another crisis impacting marketers: the transition to a future without cookies.

Chakravarthy recently discussed the cookie-less future during an extended interview with Protocal (excerpted below). 

Overview: The coming cookie-less future

Chakravarthy says the cookie-less future is already here and marketers need to adapt or get left behind:

“You've already seen what [Apple] has done. And Google is very serious about where they are headed with [cookies and] Chrome. The timeline might vary, but  . . .the way digital marketing happens has to change, and has to change substantially.”

Chakravarthy believes that the future of marketing will be first-party data given voluntarily by customers to the business organizations they trust. He also notes that some organizations have always relied primarily on first-party data:

“There are companies that already have lots of first-party data. For example, member-oriented companies. You have a membership organization, and you know every member ID — it's not a new idea; membership-oriented companies have been around for hundreds of years. Those kinds of companies have always collected data; that's basically first-party data. So you really then have to gravitate towards first-party data.”

Chakravarthy notes that customers now have more control over their data, and can decide who they want to market to them. That puts more of the burden on marketers to maintain customer opt-in by collecting and using customer data responsibly:

“From a consumer's perspective, I have to decide whether I'm going to identify myself to you as a business, and if I value you enough to identify myself so that you can then tell me what you're trying to sell me, and whether it's worth giving up my information in order to do that.

As a business, [you] have to then use that data responsibly. The answer is not rocket science. You have to have first-party data, you have to have the consent of the person providing you the data. And then you have to make sure that the business processes in which you're using the data, including digital marketing and so on, are consistent with the consent you've received.”

Adapting to a world without cookies

Chakravarthy notes that many companies have already adapted to a world of increased privacy protections for customer data. These companies are already ahead of the curve on a cookie-less future:

“Many of our larger customers who operate internationally, because of GDPR, they're already there. And then many of the customers in California, with CCPA, they're kind of already there. I think the big "aha" that we have seen in the last couple of years is that people say, "Tracking — I let the data move, people within the business do what they need to do, and then I track what is potential privacy issue or violation and so on — I can't do that, that's too difficult. So I have to do it at the source." In other words, I have to make sure I have better controls when I gather the data [and] distribute the data for use.”

Adobe itself is responding to heightened demands for data privacy by changing its data control processes:

“We use something “called DULE: data usage labeling and entitlement. And that basically governs what data a marketer has access to, via which channel. Again, it's not easy, because it means a big change in how the process has worked in the past. But it's really the best way of addressing the new requirements and handling first-party data responsibly.”

Timeline of cookies crumbling

When asked to describe how fast the change to a cookie-less future is happening, Chakravarthy expects a rate of change similar to the pandemic’s acceleration of digital transformation (i.e., fast):

“I think the next year and a half is going to be as packed as the last year and a half was. What people are going to realize is that some of them will have to reprioritize the second-half [of 2021] budget in order to focus on this. Almost everybody will say, "Hey, I'll do a pilot in my second half. But I really have to bake this into my 2022 budget, and make sure that I invest in 2022 for this transition." We definitely see clear evidence of customers saying they need to prioritize this.”

B2B Marketers: Focus on first-party data

Chakravarthy and Adobe are clearly betting big on the importance of first-party data for marketers as a cookie-less future arrives:

“I think the first-party data is always the cleanest, right? If I have your authorization [as a customer], and I got the data directly from you, and you told me what you want to use it for, that is the cleanest. So that's the sweet spot. 

Then from there, you sort of widen the circle. I have first-party data, but I had to get it through other things. Maybe I can't do it in one shot, but as I engage with you, can I collect your consent? Then, second-party data is a little bit harder. I have to make sure if I get the data, even before I use it the first time, I have to get some consent from you. But I think it's going to move in concert with the privacy changes.”

Stakes are high in a cookie-less world

Chakravarthy ends by noting that the stakes are high and failure is not an option as marketers adapt to a cookie-less future:

“Ultimately, there is a huge incentive for everybody to make this [cookie-less future] work. Because virtually everything is digital. And if you can make this work, it'll have a significant impact.”

To learn even more about an approach to first-party data and how to market effectively in a world where cookies are crumbling, reach out to us here.