How do you solve a problem like… the death of the third-party cookie?
We ask readers of The Drum – from brands, agencies and everything in between – for their advice on real problems facing today’s marketing practitioners. Today, we ask how marketers will navigate the demise of the third-party cookie.
How can marketers prepare for the crumbling of the third-party cookie?
With the third-party cookie on its way out, tech giants such as Google are hurrying to bake up an alternative. But whichever solution eventually takes precedence, the implications for digital advertising and the architecture of the internet itself are huge.
It also poses hard question for marketers. As the token falls out of use, personalisation approaches that rely on third-party data will be put under pressure. But targeting the right audiences at scale is still the goal of most digital marketers. So, what‘s to be done?
How do you solve a problem like... the death of the third-party cookie?
Allison Murphy, senior vice-president of ad innovation, The New York Times
At The Times, we have been preparing for this change for years and even set our own deadline for eliminating third-party targeting. Cookies have been horribly flawed in terms of privacy and efficacy since they first appeared, and their impending death has been a long time coming. Instead of looking to ’replace the cookie’, the industry needs to explore areas such as contextual targeting and more advancement in attribution and measurement methods that don’t require tracking users.
Next generation solutions need to default to solutions that allow data controllership to sit with the players that are responsible for the customer relationship. Brands should be able to access and use their own data, as should publishers, without jumping through hoops or being forced to share data along the way.
Justine O’Neill, director, Analytic Partners
Due to shifts in sales and consumer behavior in recent years, companies have resorted to quick metrics such as cookie-based tracking or MTA in their marketing mix. With consumers demanding more privacy, leading to the phasing out of third-party cookies, many advertisers are afraid of the future.
Adopting a holistic measurement framework, such as commercial mix modelling with touchpoint analytics, will allow marketers to continue to follow the customer journey without as many black spots. Rather than relying on third-party cookies, marketers should focus on methods they can control, such as first-party data and optimization of their CRM database. Here lies the key to converting inactive customers or upselling within individual segments, as well as effectively targeting new customers.
Isabelle Baas, managing partner for digital, data and technology, Starcom
For a number of years we’ve worked with our clients on building and maximising their own data to drive marketing efforts. We’ve reduced reliance on third-party data, gained greater insight into what factors drive their growth, how to connect this insight into all marketing activity and measure effectiveness. Data driven strategies and commerce solutions are helping our clients to drive greater ownership of insight and activation. We’ve been testing advanced cookieless solutions, new contextual capabilities and identitying solutions to maximise addressability. We’ve invested in modelling, automation and advanced analytics and performance is up. There is more to be done and some of the granularity of insight will go away, particularly in measurement, but I feel we are on the right track.
Oliver Walker, vice-president digital analytics, Merkle EMEA
One of the most significantly impacted areas is in media measurement, conversion tracking and, in particular, the ability to stitch together different interactions to build a ’path to conversion’. Whereas previously platform-based tools were able to provide raw data files, we will now start to see an attribution-based view being modelled out.
Our recommendation is to take the data from these tools and pivot to an always-on incremental testing approach. This will be the only true way to understand the impact of different channels. This, combined with a more traditional media mix modelling approach reimagined for the digital world, can start to inform how you should spend your marketing budget.
The second massive area of impact is around audience targeting. This doesn’t have to mean pivoting to identified email addresses necessarily – there’s a lot that can be done with the behavioural data we get from marketing and website interactions. There is no single solution to cookie death. However, organisations need to understand where they rely on them currently, and what the potential options are to get ahead.
Rohini Sen, managing partner and head of audience science and measurement, Wavemaker
If focused solely on the death of the third-party cookie, you’ll constantly be caught on your back foot, needing to rethink your approach with each adtech evolution.
As such, reframe the question to its core challenge: how do marketers effectively interact with consumers while respecting their privacy?
For consumer interaction, contextual data signals and broader audience clusters will lead the way. For privacy respect, greater opt-in mechanisms and consumer paywalls will push consumers, publishers and marketers alike to take more ownership of their data responsibility.
Similar to today, there will be no one-size-fits-all solution; however, the result will be that consumers will no longer feel ’stalked’ by ads, resulting in more meaningful and timely interactions – and trust – between consumers and marketers.
Martina Nikolova, client partner, Digital Decisions
The death of the cookie is coming, but the timelines keep being pushed back as still no one has the answer for an alternative or is ready for the complete transformation of the internet. Advertisers should use this time to prepare, starting with developing a strong advanced analytics capability and measurement framework.
Test the impact of running ’cookieless’ campaigns, using contextual targeting and working with select publishers who offer good quality first-party data and compare the ROI versus highly targeted campaigns. Adapt lessons and principles from traditional media, where ’cookieless’ activation has been the case for years: focus on quality, reach and attention metrics, and link to sales outcomes using advanced analytics. We will likely see industry bodies working more closely together to build the new set of digital measurement best practices for the post-cookie world.
Will Grobel, marketing transformation director, Deloitte Digital
Marketers are employing a number of strategies to maintain and enhance personalisation using alternative data sources. First, by augmenting first-party data collection and implementing cookie consent policies to ensure data compliance. Second, by exploring alternative tactics for prospecting through strategic data partnerships such as with publishing or tech companies and deploying creative targeting tactics, such as using geo-targeting. Third, by starting early and having the right tech and data tools – for instance, moving from data management platforms to customer data platforms and having the right processes and skills in place to manage these across internal teams, agencies and third-parties.
These practices can not only reduce marketing costs but also improve the customer experience and drive growth. One person’s problem is another’s opportunity.
Lottie Namakando, head of paid media, iCrossing UK
Changes to a cookie-less world could have a fundamental impact on how we develop our digital strategies and how to target our audiences. Aggregated audience data plus more reliance on first-party data will probably be the way forward, likely providing a different level of accuracy and insight while protecting users’ privacy.
If we can’t change it, work round it. This starts with businesses understanding what impact these changes will have on their performance marketing by conducting a full cookie audit of their website to identify the pain points. Once businesses have a view of the risks, data and marketing teams need to explore ways to adapt, identifying ways to limit the impact of phasing out of third-party cookies. Businesses will need to have a focus on first-party data collection, processing and activation, maximising the use of this data going forward as part of the problem-solving approach.
Carolyn Corda, chief marketing officer, Adara
Instead of fearing the demise of third-party cookies, marketers should see the next year as an exciting opportunity to forge a better path forward. Rather than relying solely on Google and its new third-party cookie replacement, they now have the opportunity to create a privacy safe solution that generates meaningful results. While marketers will undoubtedly want to work within Google and Facebook’s first-party environments, they should also seek to augment their own first-party data using independent partnerships, allowing them to build their own strategy. Marketers should look to tokenize data to ensure that their marketing strategies are supported by the latest data privacy innovations.
Bryan Scott, marketing director, The Ozone Project
Third-party cookies fuel many of the objections consumers often raise about digital advertising, like message bombardment and ‘creepy stalking’ of retargeted ads. For truly consumer-focused marketers, the quest for a better alternative should deliver campaigns that are more welcomed by customers. Equally strong performing alternatives already exist; be it the application of contextual or ‘fuzzy logic’ targeting to reach like-minded consumers, or the application of proprietary ID strategies. Advertisers, like premium publishers, are the gateway to a huge wealth of first-party consumer data and closer collaboration between the two will only result in even more effective digital campaigns.
Phil Acton, country manager UK & BeNeFrance, Adform
The removal of third-party cookies will fundamentally change how programmatic advertising works. Adform research shows a staggering 90% of UK marketers have no tested solution in place for 2022 and only 22% are actively working on a first-party ID solution. With the Chrome deadline fast approaching, we can see that marketers are starting to worry and huge attention is being given to the issue – clearly evidenced through the rising number of identity-focused sessions at events and the sheer number of ID alternatives beginning to emerge.
We risk a Lumascape scenario with thousands of companies offering siloed solutions, so the challenge for marketers now is to quiet the noise and focus on scaling workable replacements. The answer isn’t one ID alone, but fully flexible technology stacks that enable transactions on all compliant IDs without prejudice.
Alison Harding, vice-president of data solutions EMEA, Lotame
From our conversations with marketers, we see that some are very much on top of the third-party cookie sunset while others are taking a ’wait and see’ approach. The impact on marketers, however, will be universal if alternative solutions aren’t adopted and integrated. For example, without third-party cookies, marketers will lose essential tools such as frequency capping, optimisation and attribution.
In the UK, the push to invest in collecting first-party data seems more advanced than elsewhere, as is supported by a recent Winterberry Group report entitled Collaborative Data Solutions: Data and Identity in the Era of Permission.
Many marketers are seeking collaborations across the industry to build up their data supply, including other first-party data and high-quality third-party data. We are also seeing agencies are seeking education internally, while also informing their clients about what alternatives are worth pursuing and the very real implications to marketing spend and ROI.
Want to join the debate? Email me at sam.bradley@thedrum.com.