Addressability for Audience Strategies

Baking up new strategies for a post-cookie world

Let’s Get the Basics Right

Are cookies going away? Google leaders have said no…for now

Cookies may be evolving, but they are not going away at least for a couple of years. Google itself, for its doubleclick.net advertising platform, will continue to rely on the same third-party cookies used by the rest of the ad tech industry till 2022.

Google clearly recognizes the importance of third-party cookies on the entire digital ecosystem. Prabhakar Raghavan, Google’s SVP of Advertising and Commerce, defended the decision to retain all types of cookies as the default setting in Chrome. In a recent article published in CNET, Raghavan is quoted as saying, “The idea here is not to, in a broad stroke, say we’ve solved the problem and there you have it. Because the default turn-off doesn’t solve the problem.” The article continues that Raghavan said, “it would be ‘killing the ecosystem’ for publishers that depend on that data.”

So, What Does the Announcement Mean Anyway?

The updates will require developers to label cookies as either same-site (first-party cookies) or cross-site (third-party cookies) and give users the option to opt-out of one or both types of cookies.

Google has said that they are not planning to disable third-party cookies in any way. Rather, they are giving users more control over the types of cookies used in their browser. Users will need to change the default settings in the Chrome browser to restrict cookies.

Re-thinking Audience Strategies

Baking up new strategies for a post-cookie world

While Google’s announcement is not an entirely new development in internet privacy, as Apple’s Safari and Mozilla’s Firefox have both implemented similar measures, Google jumping on the bandwagon represents the final nail in the coffin for third-party cookies.

Its decision to eliminate cookies once and for all raises big questions about the future of cross-site tracking, re-targeting and ad-serving, which will force ad-tech companies to re-imagine their businesses and advertisers to fundamentally shift the digital buying strategies they have been honing for 20+ years — starting with targeting, attribution, and measurement.

But with a new challenge comes fresh opportunity. As an industry defined by change, we should all begin embracing the opportunity to transform once again by creating digital advertising that adds up to more relevant and engaging brand experiences.

Serve the right ad to the right user at the right time

“Serve the right ad to the right user at the right time” may evolve giving us more options and

not necessarily switching back to contextual targeting and last-click attribution. There are other cookie-less use cases to consider as marketers are forced to take a new approach to first-party data.

That also does not mean all forms of audience planning and measurement are dead. Demographic, in-market and affinity data from the likes of Google, Facebook, Amazon, and Pinterest will still be available, because they are first-party by design, and unlike audiences, you buy from data providers, they are free of charge. Re-targeting and look-alike strategies will also weather the storm, as long as they rely on cookie-less signals and CRM on-boarding.

Wall gardens and clean rooms

View-through attribution and omni-channel measurement will not go away, but they will only come from walled garden-specific first-party data integration and clean rooms such as Google’s Ads Data Hub and the Amazon Marketing Cloud.

To be successful in this new landscape, marketers will have to focus much more on consented known identities than unknown users. Today, most first-party use cases rely on matching a first-party anonymous cookie, such as an ad exposure or product page view, to a third-party anonymous cookie, such as a DSP, for retargeting, audience extension or attribution. Tomorrow, the only possible first-party use cases will match a known identity, such as a hashed email address, with a walled garden’s hashed email address through CRM onboarding.

This means marketers must move away from piling up first-party unknown identities and start building fully-consented, CCPA- and GDPR-compliant repositories of known identities. They have to redefine their performance media KPIs for demand generation, and to achieve CRM critical mass, they must clarify the payoff for sharing personal data.

Generating Insights from 1^st Party Data

Once cookie-based audiences no longer exist, we will see new targeting strategies that do not rely on cookies such as contextual targeting begin to dominate in digital media.

Without cookies, first-party owned data will become substantially more valuable, limiting advertisers in search of measurable alternatives to publishers and platforms that have the ability to match first-party data in a cookie-less environment. Growing the known first-party data pool is meaningless without adding a strong layer of insights. That’s why brands need to match, enrich and score their known first-party data with a Cloud for Marketing approach, which connects their DSP or ad server to the Google Cloud Platform, Amazon Web Services (AWS) or Microsoft Azure.

For example, predictive lifetime value calculation is useful for value-based look-alike modeling, because brands want to reach

audiences that are similar to their best customers, not random newsletter subscribers.

Propensity models help predict a customer’s likelihood to positively react to cheap direct marketing communication and only use paid media clients that cannot be reached otherwise.

A product recommendation engine can be used to dynamically insert the next best offer in a programmatic ad or a short-form video.

To achieve this, it is necessary to leverage cloud environments. Website data from Google Analytics 360 or the Adobe Experience Cloud can be matched with CRM data from Salesforce at the most granular level in the cloud, either in Google BigQuery or AWS Redshift. The addition of a strong machine learning toolkit provides the right scoring, and the resulting enriched CRM data set can be uploaded to specific walled gardens for activation or measurement.

Publisher log-in data will rule the landscape

Giving Google and YouTube, Facebook, and Amazon an even a larger share of digital media spend because of their persistent log-ins and ability to track users.

Along with the ability to match audiences to log-in information, these walled gardens have extremely strong and scalable first-party data, allowing for the best forms of audience targeting.

With an enhanced ability to target individuals and fewer alternatives, publishers will be able to monetize their data at higher rates than ever before. We can also expect more publishers to require registration and user log-ins to view content, to help build their data and allow for stronger first-party customer matching. This, in turn, gives them the ability to sell stronger audience targeting.

Long Live Owned Data

Data ownership will be ever more important for advertisers and publishers. Digital may become less addressable, and media investment will more dramatically favor walled gardens. Multi-touch attribution as we know it will no longer be relevant, requiring a complete overhaul of media KPIs, forcing brands and agencies to align media strategies that are more oriented toward business results.

Embrace the Wild West of Post-Click Measurement.

One of the biggest repercussions of a cookie-less world will be the emergence of new ways to measure and track advertising performance.

Google is proposing the use of its “Privacy Sandbox” as a way to measure cookie-less conversions, which uses activity stored within the browser instead of cookies. It is accessed through Google’s browser API, passing back a conversion value while limiting additional personal information associated with the conversion event.

Its “Privacy Sandbox” API will only collect post-click conversions, so this method of conversion tracking will have an additional set of repercussions. Mainly, in a post-click-only

world, the programmatic display will be forced to take a back seat to SEM.

Facebook will also come out a winner, not only for its targeting but for its ability to take advantage of the shift to post-click conversion tracking. While Facebook has been a large part of nearly every company’s growth strategy, up until now integrated digital media buyers have struggled to demonstrate a true comparison of Facebook performance to other channels, due to Facebook walling off third-party view trackers.

Now with Facebook attribution and a plethora of conversion lift studies to show their effectiveness and incrementality, Facebook will have more opportunities to demonstrate its performance in this new measurement landscape.

The post-cookie landscape is not a step back to blind contextual targeting and last-click attribution. Quite the opposite, it will require more T-shaped profiles that are able to navigate CRM, programmatic media, and the cloud.

That’s why the fast-evolving regulatory and privacy landscape is both an opportunity and a threat. Marketers who just stick to the plan and wait for the cookie’s last call before changing mindsets will most likely face lower ROI with no clear vision on where to invest. Those who quickly realize that they have to rethink their data maturity assessment, start building stronger first-party data assets, and leverage new walled garden-specific solutions will be successful.

Watch More Advertisers Get Down with OTT.

We expect the decline of the cookie will open more doors to programmatic TV and larger growth in OTT, both of which do not use cookies and will have more attribution parity to other channels.

OTT providers like Hulu, Sling, and Xandr have the strongest and most scalable log-in information tied to Device IDs and content interest, putting them in the best position to build out audience targeting — second only to Facebook and Google.

OTT will also benefit from other channels losing measurement capabilities, due to its conversion tracking parity. As programmatic loses cookies — and ultimately its long-enjoyed value proposition — OTT will strengthen its position among the media mix, with strong audience targeting and more impactful units.

As cookies are phased out, we will see the value of conversions shift dramatically, leading to a host of digital buying innovation.

We can expect search CPCs to inflate as performance demand increases for the finite supply that exists outside of the emerging space of Voice Search.

Publishers’ data will become more important than ever as more publishers will move to gate content and collect first-party data with log-ins.

In addition, walled gardens like Facebook will double down on becoming log-in channels for major publishers, creating strong audience

networks that could pave the way to new attribution tools.

Ultimately, the anticipated decrease in data-driven targeting and measurement capabilities will require the marketers who rely on programmatic to fundamentally evolve, while publishers will need to deliver larger, more impactful units in a less cluttered environment.

Light Beyond Google

One benefit of establishing an industry-standard through contextual mapping is that it would be an alternative to using Google’s technology. Google has asked for the advertising and publishing industries’ input. Even so, publishers and advertising industry observers are cautious about Google’s ending up as the ultimate arbiter of how digital advertising will look in the future.

“The general feeling is that [Google Privacy Sandbox proposals] make sense,” said Bedir Aydemir, News UK’s head of audience and data, commercial. “But the concern, as usual, is that if the industry is dependent on Google creating the solution, then once again they are able to dominate and control an important aspect of the advertising ecosystem.”

New Solution In The Works?

Previously, publishers had been concerned that sharing their valuable first-party data could lead to its exploitation by rivals. But this concern about competitors has become less of a problem following the establishment of initiatives like the publisher data alliance known as The Ozone Project, said publisher Stylist’s David Hayter, who heads the publisher’s digital operation and attended the December IAB Tech Lab event.

Publishers like Vox Media and The Washington Post are increasingly flexing their own first-party data strategies to reduce the reliance on third-party cookies and other intermediaries.

“We stopped using third-party data two years ago; the data we were getting back was massively inaccurate,” Hayter said. “We knew we were better off focusing on our own first-party data piece.”

A new identification solution “has to bring advertisers and publishers back together so that the only place to buy an audience is by going to the publisher,” Kotecha said. “First-party data becomes the new currency and advertisers know where to buy the media at scale across many publishers.”

The caveat to the whole process of developing a context mapping solution will be encouraging all players to adopt the standard. According to publisher and vendor sources, in principle, that would not involve a huge technological leap, but it can work only if demand-side platform providers accept that type of bidding.