Opinion: Catching up with the crumbling cookie

We all are consumers first before being marketers or technology providers. Hence, as a consumer, starting this article by welcoming Google’s latest announcement that it won't use new ways to track me, i.e. a consumer, and it will phase out browser cookies for ads. In a very apt headline on their blog, the company said, “Charting a course towards a more privacy-first web”.

 

Rampant use of third-party cookies has helped technologies collate consumer data across their internet behaviour and thus build these consumers' identities much beyond what the customer will feel comfortable. This has eroded consumer trust.

 

The talks about privacy started way back, and many of us have debated about the ad-blockers too a few years back. Last year in March (2020), Apple updated Safari’s anti-tracking technology with full third-party cookie blocking (around two years ahead of Google's privacy feature about blocking third-party cookies). Around January last year (2020), Google had announced its plan to phase out third-party cookies in Chrome by 2022. Thus, I will consider the recent announcement as a continuation of Google's intention. The only difference is the clarity it provided with regards to the possible alternative technologies to identify users without 3rd party cookies.

 

A statement from Google’s blog says, "we will not build alternate identifiers to track individuals as they browse across the web, nor will we use them in our products."

 

Around two years ago (August 2019), Google had also announced its initiative to build a set of open standards to fundamentally enhance privacy on the web. That initiative named "Privacy Sandbox" has evolved a lot since then. Google wants ad targeting, measurement and fraud prevention to happen according to the standards set by its Privacy Sandbox, whereby five application programming interfaces replace cookies. Brands will use these APIs to receive "aggregated data" about conversion and attribution.

 

The future is definitely about "Privacy innovations are effective alternatives to tracking". The latest test of FLoC (Federated Learning of Cohorts), basically for interest-based advertising, shows how to take third-party cookies out of the advertising equation effectively. 

 

Interest based cohort targeting has delivered 95% conversions per dollar spent vs cookie-based advertising showing that privacy and performance can go hand in hand. 

 

I do not have a crystal ball, but let me sketch out a few guesses about the impact of this move on consumers, brand advertisers, publishers, tech providers, agencies and the overall digital marketing ecosystem.

 

Consumers

 

While the consumer will love this since the move addresses the privacy concern boosting trust, there is a possibility that in the longer-term, consumers will miss the targeted adverts, which helped expose themselves to various other brand options and helped them make a better decision. But overall, I am sure this is a welcome move for consumers.

 

Brand advertisers

 

At this point in time, where there is so much focus on hyper-personalisation culminating in better ROAS, the sheer thought that the brand advertisers will miss out on precise measurement, tracking and audiences can be scary. Having said so, while the brands were so focused on cookie attributions, the underlying consumer was feeling creepy, and, in the long term, that would have gone against the brand.

 

Just to reiterate, the third-party cookies will not be tracked, but first party cookies where the brands have earned the consumer's trust and the consumer has willingly entered the data will find huge importance. It's high time for brands to connect all the internal databases and use their understanding to enhance the consumer experience. As my dear friend Aditya Swamy (director, Google India) frequently says, "Move from marketing to martech is here and now". Brands will need to go beyond narrow performance marketing, last cookie attribution to truly embrace integrated digital marketing and transformation strategies.

 

Around this time last year, I had started helping some brands create Private Identity Graphs using integration. These brands are already almost a year ahead of the rest and looking at the digital strategy in a more holistic and efficient manner. 

 

Publishers

 

It’s a tough time for them, for sure. Brands that are heavily performance-focused may ask for the efficiency of campaigns on the publisher inventory, which will be difficult to prove. There will be alternate technologies to fill in the gap, and there will be a huge temptation to adapt to that (which must be evaluated and implemented). But a complete reliance on that may stop the publishers from moving on with truly helping brands be a reliable touchpoint across the consumer journey from the Aware - Appeal - Ask- Act - Advocate stage. The time is now to break away from providing CPLs and CPAs to help businesses achieve the digital goals at a business level. I am sure we will see a lot of innovations from technology to concepts from publishers. But the core for their success will be to work on their first party audiences and help build audience buckets and newer formats.

 

Tech providers

 

Exciting times. 'Shifting from cookies to identities' will be the core of their offerings and propositions. Getting identities across channels and devices will be a tough problem to solve, especially when consumers are across multiple channels and devices. I foresee many partnerships, from devices to publishers to brands coming together to decipher the consumer. Although brands and publishers will love to see these partnerships flourish and be successful, the end customer may frown on such initiatives since they want privacy and respect for their browsing and behavioural data.

 

The focus on first party data opens up an array of possibilities where brands start implementing CDPs and CRMs. Still, the key to such platforms' success lies in marrying various data points and not relying on one big behemoth technology. 

 

There will not be one big technology solving all issues, and brands will need to be very careful while deciding on their tech stack.

 

Solution providers (agencies/system integrators/transformation companies)

 

Again, exciting times for them. The approach to media planning to buying to measuring and, in the end, justifying the spend will change. The focus will truly shift to understanding consumer journeys and building strategies that provide a fine balance between privacy and performance. "Integrated" will be the new mantra for success, where media, creative, data and insights and technology will collaboratively help achieve the digital goals.

 

Overall digital marketing ecosystem 

 

Overall, this will help to be a safe and trusting ecosystem with good focus where adtech and martech players will get more prominence. Brands will start prioritising the integration of first-party data. Value and use of first-party data, Automations, Interstate based cohorts will gain more prominence. And finally, the ecosystem will have to start believing and acting on the fact that “Privacy and Performance cannot be mutually exclusive, they can work together”.

 

Enjoy the new ride...

 

The author is founder and CEO, Logicserve Digital