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The “Death of the Cookie” Can Be Good for Advertisers, but the Time to Level Up is Now

If marketers have learned anything in the last year, it’s the need for adaptability and a healthy appetite for change. Through that lens, the looming “cookiepocalypse” presents an opportunity for much-needed evolution within a behavioral advertising ecosystem that has historically enabled many brands to operate with a relatively low level of sophistication. As the cookie crumbles, brands will be forced to either retreat further into the walled gardens or up-level their approach to deploying customer data.

To briefly recap the furor of the last couple weeks, Google announced in a blog post on March 3 that third-party cookies will be removed from the Google Marketing Platform ecosystem and will not be replaced by an alternative individual identifier. Google will continue to invest in the development of the Privacy Sandbox, a suite of privacy-forward technology products that focus on consented first-party data in owned and operated environments (Search, YouTube) and interest-based cohort audiences across the open exchange (Doubleclick). Google did make it clear that it won’t stop third parties from pursuing the use of alternate individual identifiers on Chrome, leaving the door open for the solutions being established by The Trade Desk, Neustar, LiveRamp, and others.

As the dust settles from Google’s announcement last week, a few things are left clear:

  1. Big changes ARE taking shape on the horizon. Google is actively pursuing further Federated Learning of Cohorts (FLoC) testing in Q2 as The Trade Desk’s Unified ID 2.0 moves into beta testing. Laying aside the technical details and nuances, these new audience targeting solutions represent material disruption for programmatic media buyers.
  2. The importance of first-party data access is not diminishing. In a disrupted ecosystem, strong customer experience management practices and the ability to bring consented customer data to the table for targeting and modeling will provide a competitive edge.

We still don’t know exact timing for when Chrome will drop cookies or the full technical details of how alternate solutions will allow advertisers to activate and measure given that there is still product development work to be done. This begs the question: with so much still unknown, what action can advertisers be taking now to be prepared for the inevitable changes to come?

  1. Audit and analyze current marketing investment. How much is spent against first-party audiences? How much on the open exchange? How much on in-app media? Answers to these questions will help quantify the potential impact and identify priority areas to begin testing or diversifying. Gathering relevant data points will provide a critical foundation for forecasting and creating impact scenarios specific to current investment mix.
  2. Develop plans to maximize consented first-party customer data. This isn’t about devising quick schemes that trick or force customers to give up their personal information. It’s about building a foundation that creates value for customers and communicates the benefits of sharing data.  For anyone who has been plagued by a banner ad for a product they’ve already purchased, it’s easy to understand the benefit of providing brands with customer data to improve advertising experience. It’s left up to those brands to wield consented data both responsibly and intelligently. Unfortunately, it’s often far less obvious to a consumer when their opt-in data has been used for forces of good, perhaps to curate a landing page full of products in their favorite colors and styles, only in stock in their usual size range. While consumers might not be consciously aware of how their data is being used, brands can tell in a big way because conversion rates, ROI, and lifetime value should see a sharp increase.
  3. For organizations still focused on post-click or last-touch attribution, ensure there is a roadmap to move towards Marketing or Media Mix Modeling. Since details are still murky on exactly what digital data points and identifiers will be available to advertisers in the future, the focus should be on education and organizational buy-in for statistically modeled performance analytics. Tomorrow’s winners will be those who have moved away from easily trackable or attributable online activities toward modeling the impact of changing media investment decisions on long-term customer value.

As the cookieless future continues to unfold, success won’t be defined by which digital platforms or technologies marketers select or the savviness of their media buyers. Future-proofing advertising strategy requires a transformative shift in the way that marketers think about identity, orchestrating customer experiences, and analyzing total marketing performance. Breaking down organizational silos won’t happen overnight, so now is the time for digital advertisers to get to work as change agents. The “death of the cookie” might sound scary, but the “death of the last-click attribution model” would be a very good thing for brands and customers alike.

To hear more about the cookieless future, check out episode 6 and episode 8 of Merkle's Digital Marketing Musings podcast.