Preparing for Cookie Deprecation

Amit Deshpande, Partner & Regional Head

April 6, 2021

Google made the announcement that 3rd party cookies are being eliminated from their leading web browser by 2022. Why does that really matter to a marketer? 3rd party cookies are widely used to identify and track people across websites, understand their behavior, reach them with personalized ads, and measure performance of digital campaigns. 3rd party cookies enable core capabilities that are near and dear to marketers to drive business impact. With elimination of 3rd party cookies, the carpet is being pulled from under the feet of brands and agencies that rely on them. Quite likely, either for or under the pretext of consumer privacy, the walls of the walled gardens are getting taller and gardens greener vs. the rest.

While marketers are frustrated and under-prepared, not all is lost. There are positive trends that will lead to innovation for advertisers, publishers, and consumers, including:

Several options exist for marketers to develop their strategic plan and roadmap to thrive in the 3rd-party-cookie-less world. The below framework is only an initial thought-starter for the journey.

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  1. Brands that dominate their marketplace, say based on product or price or easy access for consumer, and are not as dependent on personalization, could leverage Contextual Targeting. Contextual targeting alters advertisements based on the context or content of the webpage or environment being visited and are not specific to an individual. This would be a backward step for brands that thrive on customer experience or personalization.
  2. Brands, whose media budgets are small to mid-scale or are not averse to relying on 1-2 partners for either media placement or as customer data platform, could exclusively leverage walled gardens such as Google. The good news is that data and personalization abilities within walled gardens are improving, resulting in potential for better performance and simplicity of execution. The cons are that significant consumer visit activity is outside of walled gardens, resulting in opportunity loss. Also, abilities to stitch data outside of the walled gardens are limited, resulting in inferior customer journey mapping or closed loop performance assessment.
  3. For many reasons, brands may not want to rely exclusively on walled gardens. For such brands, the good news is that vendor solutions exist that rely on 1st party data or cookies and are improving. Such solutions will be less affected by 3rd party cookie deprecation enabling personalized treatment and performance. The cons are that such solutions are either in the early stages of evolving from 3rd to 1st party structures or relatively expensive. Most brands, particularly large ones, will chose to leverage a combination of Contextual Targeting, Walled Gardens, and 1st Party Identity-based partners. To do so effectively, brands are investing in core capabilities to identify and know the consumer.

A. It is important for brands to know the customer as a person or household or business. To do so, data elements such as name, address, email, phone, device are being obtained and leveraged in a privacy and regulatory compliant manner. Connectivity needs to be established between customers and their offline and online transactions. Brands are leveraging innovative approaches in doing so. Once such data is obtained, accurate and persistent identifiers can be created that will work for both offline and digital as well as owned and paid channels. Increasingly, brands are investing in customer data platforms and analytic clean rooms.

B. Customer Identity, Customer Data Platforms, and Analytics Clean Room solutions are allowing brands to leverage both 1st and 3rd party data assets to create target audiences, inform treatment, enable activation, and perform closed-loop performance assessment for continuous improvement. In addition to 1st party data, innovative 3rd party data assets that are now available at the individual or household level are being leveraged including demographics, financials, life-stage, interests, lifestyle, spend and visits with brand vs. competition and more.

As the digital eco-system goes through these changes, as challenging it is for marketers, it also creates an opportunity in disguise. Brands are being forced to focus more on people-based solutions (vs. cookie or device based) than ever before. However, brands are also faced with a complex ecosystem with multiple building blocks, many vendors for each, all who claim their solution to be the best for the new 3rd-party-cookie-less world. It is critical for brands to focus on use cases that will drive business impact vs. being swayed by jargon and relying on objective advice from experts who can be trusted and will not be conflicted by the solution that they must sell. Regardless of the challenges, the path forward is exciting and is one that will result in superior customer experience as well as strong financial performance when done right!

Please do reach out with your comments and questions at engage@blend360.com

At BLEND360, we would be happy to have a discussion specific to your needs.

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