When Google announced its plans to phase out third party cookie in January it was set to be the BIG news that rocked the industry in 2020.. but that was before COVID-19. Whilst much of the year has been spent dealing with the fall out of the pandemic – the phase out of third-party cookies rolls on and is set to wreak havoc on data driven marketing as we know it.
So, what are some of the biggest challenges and opportunities that exist due to the demise of the 3rd party cookie? And how can brands better prepare for the changes? Whilst there is a host of information out there on the topic much of it is highly technical and its fragmented.
We’ve set out to demystify the jargon and answer some of the most commonly asked questions about the topic – to help marketers and digital teams grapple with the challenge ahead of them.
Catch me up - why is this happening?
Ok so let’s start with some context. In recent years, the highly unregulated data industry has felt the wrath of regulators who are rapidly evolving legislation to protect user’s privacy. In their announcement to the market in January, Google stated their goal is to make the web more private and secure for users and the phase out of cookies enables them to do that. Google isn’t the first to block 3rd party cookies – Safari and Firefox have come before them but this is the most significant.
Are all cookies impacted?
No is the simple answer. Google is blocking 3rd party cookies accessing the browser – whilst 1st party cookies remain intact. What’s the difference? 1st party cookies are set by the domain (website) whilst 3rd party cookies are those that are set by a domain that is not the one that you are visiting.
How big will the impact be?
According to Statista Google Chrome commands a massive share of the browser market, with 70% of usage on desktop and 41% on mobile. It's coverage alone is telling when it comes to the size and scale of impact for the industry. However, coverage is really only the tip of the ice-berg. For the last 25 years, marketers have relied on third-party cookies for users’ analytics, cross-site and behavioural targeting, retargeting and any other sort of data-driven advertising, much of the AdTech and MarTech industry has been built upon it. This is set to disrupt the entire industry supply chain and like with any major disruption there will be winners and losers.
How will this impact me as a marketer?
When so much of a supply chain for an industry is no longer functional it means there is substantial change on the horizon.
While cookies aren’t and have never been perfect, the advertising ecosystem relies on them for targeting, managing frequency and bid optimisation. Many experts believe this change will drive a shift towards a people-based model. Whilst people-based marketing is not a new concept, it didn’t have the conditions to thrive, that is there was no impetuses to move towards it until now. But people-based marketing won’t be the silver bullet – yes on one hand it will provide more precision but on the other marketers will be dealing with more fragmented audiences than before which ads to the complexity.
Brands who have heavily built unknown and anonymised data assets to drive personalisation and advertising effectiveness via DMPs will also be heavily impacted as these are heavily reliant on the use of third-party cookies.
Will measurement be affected?
Digital has prided itself on its accountability and measurability – it has driven its mass appeal and adoption by marketers but also been its Achilles heel (as it has driven digital to be perceived as a short-term tactic) all at the same time. Cookie based measurement and tracking approaches will go down with the cookie, we will see the death of metrics like post view tracking (thank goodness) with publishers and agencies scrambling to build new approaches to measure, attribute and demonstrate return from digital investment.
Will there be identifiers that replace a third-party cookie?
The third-party cookie served as the workhorse of the independent advertising tech (adtech) ecosystem. Cookies are how ad tech companies communicate with one another in order to trade programmatic ads and is what the whole industry has been built upon.
The industry is now rapidly innovating to develop alternatives to provide brands and marketers with robust ways to connect the customer experience and personalise in lieu of third-party cookies.
Universal IDs (which allow the industry to match data across platforms based common hashed identifiers) is touted as a solution to address the challenges presented by the phase out 3rd party cookies however to be viable enough partners are required to become relevant in scale and a feasible industry alternative.
ZeoTap is one such provider which has launched a solution, known as ID+.
I’ve heard contextual targeting is making a come-back – so do we still need to worry about data driven marketing?
Whilst some feel that the industry is likely to revert back to advertising opportunities of yester-year others aren’t so sure. In a recent interview with AdNews, Rob Noman, a 30-year industry veteran ex GroupM has suggested “anyone who thinks a cookie and data driven marketing is going to be replaced by a return only to a contextually driven market is deluding themselves. Context will be important but it will be context plus data”
What can we expect to see from publishers and advertising solutions?
Expect to see a lot of innovation in this space over the coming few years, as maturity builds new and the ecosystem takes shape.
What we do however know is the changes will likely mean that quality data and addressable audiences will be scarcer than it has historically been and audience fragmentation is likely to be exacerbated. In a cookie less world, publishers are increasingly focussed on building their addressable audiences through authentication and registration strategies. We are also seeing new alliances and partnerships forming, where a group of publishers work together to build a walled garden (which is essentially an environment where tech and data is not accessible by others). The Ozone project is one such example in the UK where the likes of News UK, The Guardian, Bauer & others have partnered to build what they term as a transparent, brand safe platform in the UK.
In his recent interview with AdNews Rob Noman also introduced the concept and emergence of data bunkers. A data bunker effectively helps marketers, publishers and other players match up consumer data in a way that’s meant to better preserve their privacy. InfoSum is one such provider in the UK – which allows a bunker to be set up inside a customer database – meaning data can be shared with partners without needing to be sent around. The emergence of data bunkers will see brands build closer and tighter knit relationships with publishers of choice to drive targeting and personalisation to core audiences.
Where to from here for marketers?
The path your organisation needs to take will depend on a host of factors; your current context, strategic direction and key areas of focus. As you navigate the maze, it’s important to remain focused on your key objectives and goals and not get caught up in the hype. If you are unsure where to start based on the changes, here are some starting points.
Re-define your data strategy – First party data is going to become even more important than it already was. With data sharing still on the table with publishers and other identifiers in the works now more than ever brands need to have a clear strategy to drive authentication and registration which can be utilised to connect and personalise the experience. What’s more brands should consider mapping the experiences and tools that are powered by 3rd party cookies to identify the true impact to their brand and how they start to untangle their brand from the eco-system.
Ensure you have the right partners in place – In times to change you need the right partners around you. If your media agency doesn’t seem to grasp the concept or impact of the change, then its possibly time to look for an alternative agency – this is not the time for passengers. Agencies will play a vital leadership role in this changing environment and it is important you are in the hands of those who are attune with the changes occurring and how best to position your brand for success.
Start having open dialogue with publishers now – Understanding publisher roadmaps now will help you to navigate the change and determine whom to effectively partner with. Explore how they are anticipating to match data and what kinds of data will be available in the future
Do you research and stay close to what is happening– there is a plethora of information available – two of the best webinars and podcasts we have come across are available below:
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