Third-Party Cookies Phaseout: A Pivotal Moment For Digital Marketers

For the last 25 years, marketers have relied on third-party cookies for users' analytics, cross-site and behavioral targeting, retargeting and any other sort ...
Third-Party Cookies Phaseout: A Pivotal Moment For Digital Marketers

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Is the online advertising industry on the verge of a total revolution? I think it is. For the last 25 years, marketers have relied on third-party cookies for users’ analytics, cross-site and behavioral targeting, retargeting and any other sort of data-driven advertising, and many of us still do today.

By 2022, the way the industry has been using cookies will likely dramatically change as a result of Google’s plan to in Chrome.

Unsurprisingly, Google has joined like Apple and Mozilla to remodel the future of privacy on the web and, most likely, the future of the online advertising industry as well. The decision seems to come from the growing awareness of privacy issues raised by the EU’s General Data Protection Regulation and the .

To balance the dismissal of third-party cookies, Google is introducing , a set of open standards for ad targeting and measurement that will enhance privacy. While Google claims to be enhancing users’ privacy, we can’t forget that the company earned .

Third-party cookies are not going to disappear overnight, but their phaseout is likely going to hurt the entire adtech industry and change the way programmatic advertising works on the web. I believe we can foresee the impact on companies by simply looking at the right after Google announced its phaseout plan on Jan. 14.

Google’s move will impact performance advertising campaigns that measure conversion by using, among other parameters, the post-view attribution model, which relies on third-party cookies for cross-site tracking.

This is how this model works: A consumer notices an ad for a famous sportswear brand’s sneakers while reading an article on CNBC’s website. The next day, he is still thinking about the sneakers and decides to visit the sportswear company’s website and purchase them. At this point, the company’s ad server can attribute the sale of the shoes to CNBC, as a cookie was dropped on his browser when he was navigating the news website. With the end of third-party cookies, the post-view attribution to CNBC will no longer be possible.

What will be possible then? Google’s Privacy Sandbox will be offering application programming interfaces to query in real time and obtain profiling data about the user behind the browser, but it will not give advertisers the opportunity to save their data. Advertisers will, therefore, still be able to personalize their campaigns somewhat, but they won’t be able to track the user for future targeting and personalized ads.

It is becoming clear that media outlets, such as daily news publishers, where ads are mainly meant to be seen rather than clicked, will probably suffer dramatic ad revenues losses. Advertisers who are no longer able to rely on the post-view attribution to measure their investments will likely shift budgets toward click-based media like search engines.

Consider the media ecosystem as split into two parts. On the one hand, we have players that collect personal data through user consent and a login process (Google, Facebook, Instagram, YouTube, Amazon, etc.). These so-called “walled gardens” require profiled logins to access their services. On the other hand, we have players who rarely collect that kind of data, such as publishers. The first players will have a clear opportunity to reinforce their dominant position in online audience-driven marketing; the others will likely need to try new strategies. First of all, I believe they will need to keep investing in content quality and hope that contextual advertising will rise again and benefit them. Second, they may need to transform their business models — if they are capable enough — and introduce strategies to acquire users’ consent to build a first-party data advertising proposition. Last but not least, I believe they will have to hope that a new tech solution solves this issue.

One such solution, which the whole industry seems to be waiting for like the Holy Grail, could be the Universal ID, a common identifier able to replace third-party cookies in cross-site tracking. But at the moment, no one has clearly explained how the Universal ID would sync different first-party cookie pools across domains. This calls into question its interoperability across publishers’ and brands’ websites. Furthermore, should a privacy-friendly solution arise, the possibility for a single standard seems unlikely due to the vast fragmentation of identity-resolution players in different markets.

While the solutions mentioned above may or may not work, the good news is that in this time of uncertainty, we all can still enhance the efficiency of media investments.

Multichannel orchestrators are already offering alternative solutions based on event tracking rather than on cookie tracking. Performance signals such as variations in key performance indicator trends (e.g., impressions, clicks, views, sales, etc.) gained from every advertising channel and compared with online sales can tell us how to optimize the media mix in real time.

Those signals are the most crucial aspect of the ability to judge whether a channel or media is efficient or not. The variation of investments during a short period of time can strongly influence sales, and with a robust machine learning algorithm, it is possible to make decisions on media mix optimization in real time as if third-party cookies still exist.

A new opportunity is opening up for marketers to aim for a higher data analytics model that will level up online advertising. While publishers, agencies and advertisers are concerned about the upcoming revolution, I rather think this is a time of evolution: a new chance to foster innovation and move digital marketing forward.

CEO and Co-Founder at . Digital advertising expert and professor of Digital Economy at Universitas Mercatorum. …

CEO and Co-Founder at . Digital advertising expert and professor of Digital Economy at Universitas Mercatorum. .



source https://www.forbes.com/sites/forbesagencycouncil/2020/05/12/third-party-cookies-phaseout-a-pivotal-moment-for-digital-marketers/

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