Posts

Laura Kavanagh

Planning for a cookie-less future: What you need to know

“Before cookies, the web was essentially private. After cookies, the web becomes a space capable of extraordinary monitoring,” said Lawrence Lessig 20 years ago.

Approximately 83% of brands rely on third-party cookies. For the past couple of decades, cookies have been the leading source of tracking and monitoring internet users, allowing for sophisticated targeting, retargeting and personalization. With the impending demise of third-party cookies and recent restrictions on using mobile-device identifiers for ad targeting, marketers will need to overhaul their advertising strategies to prepare for a dramatically different landscape.

What’s coming:

  • Starting in mid-2023, Google’s Chrome browser is expected to block 3rd Party cookies, which are already blocked in Safari and Firefox. Because Chrome is the leading browser —this cookie policy will effectively put an end to cookie-based advertising.
  • Apple requires app providers to get permission from consumers before tracking them – and initial data suggests only 46 percent of consumers will agree, meaning app providers will be unable to track most users across the Apple ecosystem.
  • Notably, both Google and Apple have said they will neither create nor support workarounds, such as probabilistic fingerprinting, to build user-level profiles in their ecosystems.

Make sure you have a plan.

In the short-term, the phasing out of cookies and device identifiers will have a negative effect on efficiency and ultimately ROI – but the good news is that there are new ways of targeting that advertisers can and should be testing before cookies disappear. There is no one-size-fits-all solution, but by creating a plan and assessing the various options, advertisers can set themselves up for the future.

  • Assess your current use of cookies: Determine which cookies you are currently using on your website and which ones are critical for your advertising efforts. 
  • Evaluate alternative tracking methods: Explore other methods of tracking user behavior such as first-party data, contextual advertising, and server-side tracking. 
  • Build a first-party data strategy: Collecting first-party data directly from your audience can help you better understand their preferences and behavior and personalize their experiences. 
  • Develop a consent management plan: Be transparent with your audience about how you collect and use their data and provide them with options to manage their privacy settings.
  • Test and optimize: Experiment with new approaches to tracking and targeting users, and optimize your strategies based on performance and user feedback. 

Alternative tracking methods to evaluate and test.

Browser Based Tracking solutions use JavaScript code to track user behavior on a website and send that data to a server for analysis.

Device Based Tracking uses data from a user’s device, such as the IP address, to track their behavior across different websites.

Contextual Targeting is based on the content the user is viewing. While some may consider this a step back, new tools that use natural language processing and image recognition allow algorithms to grasp the sentiment of specific content with unprecedented speed and reliability, enabling marketers to display ads in an environment that is both highly relevant for their potential customers and safe for their brand.

Interest-based Targeting relies on data about a user’s website visits, but only to identify what broad content topics they’re interested in. Google’s Topics is one solution that learns about users’ interests as they surf the web and shares top interests with participating websites for advertising purposes, staying within a limited set of 350 broad topics and excluding sensitive topics like race or sexual orientation.

First-Party Data should continue to be priority (collecting data directly from owned channels, i.e., websites, apps) and should be supplemented with zero-party to understand preferences, intention, and lifestyle.

Second-Party Data Partnerships can help maximize the value of first-party data. Advertisers should seek partnerships to exchange data through a neutral third-party cloud solution. Targeting can then be done anonymously, allowing advertisers and media owners to expand relationships without violating regulations.

Universal IDs use hashed and encrypted email addresses from opted-in users as the basis for identity across devices – a significant advantage over cookies. These IDs are shared between publishers and advertisers to be used anonymously – and because the data is hashed and converted to a hexadecimal string, it does not violate regulations. Current partners offering Universal IDs are The Trade Desk, LiveRamp, Tapad, Neustar, Epsilon, Zeotap, Flashtalking, ID5 and LiveIntent.

It’s yet to be determined whether consent to use email addresses can be achieved at a large enough scale to meet the demand for advertising inventory. Collecting email will have a role in the post-cookie world, a significant one. However, it will coexist with other solutions, such as first-party data, opted-in GPS location tracking, and contextual (keyword) targeting.

The Net Net

While the phase-out of cookies may seem daunting, there are several alternative solutions available, and advertisers must be proactive about setting themselves us for the future. There isn’t one solution to replace cookies, it must be a combination of tactics to ensure you are using all available resources.  It is also key to get ahead of the game rather than waiting until cookies are obsolete.

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Wolfgang Bscheid

When the browser becomes the boss

In a future cookie-free advertising landscape, browsers and operating systems will become the gatekeepers of digital marketing. This has serious consequences – much more serious than most people are aware of so far.

Who will decide in the future what advertising we see in the digital universe and when – a few gatekeepers? Or do we want to keep market access more open in the democratic or market economy sense? We are currently facing important questions and setting the course. These conversations will probably have a major impact on digital marketing in the next two decades. And most of us may only have an inkling of what’s in store for them.

How did we actually get into the current situation? The short summary: Too much blingbling on the websites, too many trackers and a too high nerve factor of the buy-me-retargeting. Maybe we as an industry simply overdid it a bit. In response, users have installed adblockers and the legislator has reacted with the DSGVO. The politicians meant well but did it badly! Because now our European or German data protection is absurdly leading to the fact that we are promoting global data oligopolies. These massively restrict our scope for action and our economic opportunities. The fact that “A world without cookies is already a first good step”- as Jürgen Scharrer recently commented in Horizont – I personally consider to be a very naive view. The opposite could be the case: “Cookies out” means “GAFAs before”! The loss of cookies strengthens data oligopolies, maybe even a data monopoly.

On the way to a data oligopoly: Few drilling platforms with exclusive rights

If data is the new oil, then – if we are not careful – a few large US digital “oil companies” will own the sources in the future. With only a few rigs, but very exclusive production rights. I think many in Germany and Europe have not yet really understood the true dimension of this upheaval. Google, in particular, has been very clever strategically in this game.

In the first stage, the attention of regulators was focused solely on the “evil” third-party-cookie. Log-Ins, which contain much more extensive rights to data that can be perfectly linked together across devices, were left out.

Stage 2 presents a solution to a problem that only arose in stage 1: the current DSGVO reality with its content solutions is far too complex and lacking in transparency, both for users and companies. The perfect starting point for Google: Because now in the second step – as the saviour on the white horse – Google is approaching with its initiative of the “Privacy Sandbox”.

And from both a technical and organizational point of view, this is a very interesting approach: a central office that collects and manages all data. An end to the completely confusing sea of service providers who are involved in every opt-in process and who, in the end, can no longer be really controlled. And thanks to Google there is already a suitable infrastructure. The browser or the operating system for mobile use. We are told that the digital advertising world would become simple and controllable again.

But we shouldn’t fall too quickly into the convenience trap. If the market only uses the Google solution just because it is simple, faster and apparently easier, it could permanently block the free path to data. And with it, all opportunities in the future to set up and implement their own business models linked to more extensive data. 

The question of what comes after cookies is so fundamental because under the guise of data protection, a new technical infrastructure is to be created that will shift the usual balance of power in the World Wide Web even further to our disadvantage. In a third-part cookie-free Internet, browsers and operating systems become the central gatekeepers. This changes the nature of the web. In the future, few gatekeepers want to decide what kind of data is available to advertisers, agencies and publishers. And thus, also who can refinance themselves to what extent.

The Black Box decides which data we are allowed to work with

The browser becomes a black box. Everything that is important in terms of data and information for meaningful targeting is measured and generated behind closed doors. If one reads Google’s statements more closely, it seems to lead to a situation that we already know in principle from the video portal YouTube among others. Advertisers learn whether they reach their target groups. But in the future, they will no longer be able to track and verify the results themselves. Only YouTube collects the performance data as well. Control? Hardly possible. What was once an open system based on the division of labour, is now a centrally controlled Internet with a completely different character. In this system, one person in particular learns and optimizes: the gatekeeper. This makes it extremely difficult for us as media agencies to externally monitor performance and adapt existing strategies. Creative in-house developments are no longer worthwhile because the gatekeeper decides which set of data is made available.

Of course, you can accept this attractive offer from Google. One should only be well aware of the possible consequences. Because afterwards, nobody should claim they didn’t know.

The Internet is just the beginning, mobile follows and TV is coming soon

Online the weights have already shifted. That’s just the beginning, because in today’s digital ecosystem, everything is connected to everything else.

The largest browser, for example (Chrome), belongs to the globally dominant advertising network Google. And Google also provides the dominant mobile operating system – Android. From this perspective, the oligopoly of browsers mentioned at the beginning quickly becomes a duopoly of operating systems with a rather small player (Apple with iOS) and an overpowering player (Google, for example, has a 76 percent market share in Germany with Android). And it will by no means remain with desktop, laptop and smartphone. This expansion of operating systems will have consequences for advertising on all screens, especially television. As a result Google, a company with a market share of around 80 percent in the western world, would dominate the two largest advertising media worldwide because it controls its revenue processes.

The discussion about cookies, browsers and operating systems is therefore not only an issue for the Internet in the narrower sense, but ultimately affects our entire media and advertising landscape. It is also a cultural debate. Perhaps even the most fundamental one we are currently conducting. It is about refinancing the content that is the basis of our democratic society. Do we regard the Internet as a public space, with the possibility of participation by many citizens and companies? Or is it becoming a purely economic infrastructure dominated by one or a few US corporations?

It is high time that we in Germany and Europe intensify this debate. We Germans, in particular, sometimes tend to lose ourselves in debates about the industry that are too small-scale. It is time to think bigger together and develop serious alternatives!

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