The cookie hangover
The ethics of advertising has entered a new era. Cookies are on their last leg and digital marketing companies have congregated around the need to move advertising forward, prioritizing trust and transparency, privacy and security alongside scale, relevance, and performance. The world of first-party data is here, but the cookie afterglow seems steadfast.
We roll our eyes at the mention of cookies, thinking, “How 2018,” and a strong vanguard has embraced the mission of identifying a more apt way of reaching audiences than through the ever-crumbling cookie. While this group sees a new marketing currency as a moral imperative with strategic benefit and revenue opportunity in tow, the programmatic supply chain as a whole seems to be caught in a snare. Rather than accepting that cookies had a short shelf-life to begin with, some find themselves foisting cookie-based logic onto cookieless solutions. First-party, compared to third-party, methodology is intrinsically different and so requires new, not borrowed, frameworks to measure campaign health and commercial success. Yet, groupthink, confirmation bias, and familiarity bias form a tide that keeps pulling our industry back to the execution it knows best.
Given this backdrop, I empathize with consumers leveraging ad blockers, declining privacy policies, fearing walled gardens, and grumbling about pages littered with ads whose aim is to boost “empty calorie” metrics like viewability, click-through rate, impressions - illusory indicators of consumer engagement. The internet has given us a lot (thank you meme culture), but it has also exploited our data and right to privacy.
Healing the mistrust between the beneficiaries and benefactors of the internet
I won’t bury the lede that the internet needs advertising dollars to persist and that first-party data strategies require elbow grease. But, as we all know, hard work pays off. No pain, no gain, baby. First-party collaboration belongs to our industry’s A work, which is naturally hard, so defaulting to the spray-and-pray delivery method and measuring effectiveness through proxy metrics offers a comfort zone. The machine is set up to circulate money by tossing volumes of people into the funnel for a higher chance of conversion. It’s a numbers game, fair enough, but a game that also ushers in ad fatigue, ad blockers, and ad waste, so how good a return-on-ad-spend is it really?
Time to open the windows of this stifling room and let in some fresh air. Consider: what content do consumers (or you as one) actually enjoy? How can advertising further social justice? How can you spend more on fewer, well-placed ads with more thoughtful messaging to yield a better return-on-investment in the long-run than does blasting the internet?
As Camilla Child, Director of Commercial Data Strategy at Telegraph Media Group, said recently in her switched-on as-ever Identity Architects episode:
“Match rates have inadvertently become a new currency when they are only one piece of the puzzle and do not necessarily dictate the full value of where your opportunities are. It's important when we're talking to partners to see things in the round, rather than just looking at that one number or percentage of a match rate. It's about the quality and the opportunity rather than just the volume that you can achieve.”
Is digital advertising self-contained to the point of forgetting about the end recipient of the ads? We need to think about consumer engagement as the long game where brand loyalty and consumer trust are earned, not coerced, over time.
To achieve this, consider what is at the heart of good advertising. Sharing content that inspires, moves, educates, and excites a group of highly engaged people is more impactful, I would say, than one-size-fits-all campaigns sent to a broad swath of unsuspecting or jaded people.
Focusing on what matters in a world underpinned by value exchanges
I understand the need for data-driven metrics to study campaign effectiveness, justify media channels, and optimize marketing campaigns. However, for the inflection point we currently inhabit, a test-and-learn attitude that allows for thoughtful experimentation outside of just scale is also vital. Without it, all the talk of innovation that occupies the stages of every ad tech conference becomes incongruous lip service.
Look at the stats Lauren Wetzel, CEO of InfoSum, presented at DMEXCO this year, proving that we’re already in a cookieless ecosystem. Safari and Firefox, which account for approximately 37% of the browser market, are cookieless by default. Microsoft is on track to deprecate cookies in Edge by the end of 2024. And finally, Chrome: recent forecasts from EMARKETER suggest that approximately 83% of Chrome users will choose privacy when given the option and block third-party cookies by default. This means in the not-too-distant future, around 87% of all browser activity could be cookieless. No forward-thinking business should plan its media strategy around 13% of the market. Further to that, Gartner reports that 80% of marketers who rely on third-party data will abandon it by the end of 2025.
Progress is a paradox if we want to move on but aren’t willing to take a leap of faith and test new ways of working. As the stats above show, the need to get past this inertia is business critical. How we do that, in my opinion and experience of working with first-movers, is through top-down support within brands, agencies, identity partners, and media owners to carve out a differentiated strategy that doesn’t replace third-party advertising but supplements it as a standalone capability. In order to seriously execute this promise, companies need to reconcile their desire to innovate with dedicated test budgets, upskilled resources, and KPIs that are not out-of-the-box but building blocks.
Part of laying the groundwork is recognizing that first-party audiences should be smaller than third-party pools, given the essential difference in data collection and retention. But while audience size may be reduced, the relevance and accuracy of the data increase, leading to a more deterministic, meaningful application of ad spend and minimization of probabilistic ad waste.
Finally, organizations need to insist on the prioritization of security and privacy, not just diplomatically at conferences, but operationally in the day-to-day. While selecting the right partners to help with that insistence, I urge companies to discern signal from noise, at the end of which few companies are built-for-purpose “data clean rooms,” to breed trust that the infrastructure can safely enable incremental revenue streams and partnerships.
As Camilla says:
“One of the huge benefits of data clean room technology is that, as well as being new, exciting and innovative, it also works so much better than cookies did. We're talking about people-based marketing rather than cookie-based marketing, and I think that's so exciting. A lot of the time with cookie blocking, we're thinking about how we can replicate the past or work around it, whereas this is, to me, actually fundamentally better.”
Rome wasn’t built in a day
Fifteen years ago, real-time bidding was met with skepticism by print and look at the vibrant lumascape it has since spawned. We are at a similar tipping point now, building an ecosystem on secure data collaboration and collective responsibility. The ethos of “right person, right place, right time” at the heart of programmatic advertising wanes in effectiveness if the right consent isn’t in place. If you need faith that the first steps you take now will pay dividends, look no further than the first-party data trailblazers who have put in the work and are not only driving superior marketing performance compared to the status quo but doing so in a responsible and ethical way by prioritizing consumer privacy. Delayed gratification is a virtue that must be practiced and will foster trust with every business’s most valuable asset, its consumers, while instant gratification, in this case an over-reliance on third-party cookies, will burn out fast.
Kicking off explorations with tunnel vision for return-on-investment misses the point. Instead of starting at the end, think about test-and-learn, trial-and-error, discovery, and experimentation so you can build a foundation from which to grow. Data-led collaborations are green shoots of rich partnerships that, when done thoughtfully and patiently, lead to stronger consumer engagement, lasting customer relationships, and better ad experiences over time - the very things that will bring companies what they desire: revenue and business growth.
We at InfoSum are proud to work with partners who are pioneers of progress, think critically about privacy and security, and embrace their first-party data journeys. If you’re looking to take the first steps on your own journey or would like to take your strategy to the next level, we’re here to help - get in touch today, and let’s prepare for the future together.