#Thought Leadership

How to Survive the End of Third-Party Cookies

This article has been authored by Gabriella Manzini, Global Digital Account Director, iProspect. 

 

The end of third-party cookies will greatly affect full-funnel planning and campaign performance measurement for advertisers. While many alternatives to third-party cookies are in development, retail brands cannot afford to wait.

 

In this article, we explore the solutions you can take advantage of today, and how collaboration will be the key to unlock efficiency in the cookieless world.

 

 

Looking for solutions to the end of third-party cookies

 

We can simplify what has already been written on the consequences for brands of the end of third-party cookies into two main categories.

 

First, it will challenge targeting effectiveness and full funnel planning. Without third-party cookies, targeting pools may be greatly restricted, and, as such, the reach for campaigns limited. Additionally, advertisers will be losing the ability to retarget users who have engaged with ads – which is a key way to drive them down the purchase funnel.

 

Second, from a measurement perspective, the end of third-party cookies affects how accurately we can track users through the web, and therefore our ability to effectively attribute sales to advertising investment. This could lead to a decrease in perceived ROAS, but also an actual revenue loss from budget misattribution. 

 

The “plug and play” solutions fail to convince so far

 

The advertising industry is striving to design solutions both suitable for brands’ business needs and respectful of user privacy. While there are currently some “plug and play” tech solutions, it’s important to understand that these are not yet to be capable of delivering the same scale and measurability as those currently powered by third-party cookies.

 

Universal ID Solution

 

One of the most widely discussed alternatives to third-party cookies is the Universal ID (or UID 2.0), which would use user sign-on and consent data to create a unique ID encrypted and sent into the DSP. UID 2.0 is getting a lot of attention as it replicates many functionalities of a third-party cookie, but also triggers concerns about its capacity to scale. According to Campaign, “partners involved in UID 2.0 are hoping to sign up 15% to 20% of the global internet population within a year.” However, we’re seeing low adoption of this solution at the moment, and it is still unclear whether privacy laws like EU’s GDPR - that specifically limits the use of unique identifiers - may be the death of UID2.0 in some parts of the world. So going back to our two key challenges, this solution could solve for the measurement concerns and for some of the targeting challenges; however, it is very limited in scale so far and will most likely not be sufficient on its own anytime soon.

 

Federated Learning of Cohorts Solution

 

More recently Google has unveiled its new solution FLOC (Federated Learning of Cohorts), which will place users into “cohorts” based on their interests and characteristics so that users can be targeted without unique identifiers. Although there is still more to come on the practicalities of FLOC, this feels similar to the contextual solutions offered by many AdTech players which ultimately target users based on interests. These solutions solve for the scale/reach challenges but are unlikely to deliver on the concerns around measurement and full-funnel planning. Targeting people based on their interests and the content they consume enables brands to reach them with relevant content, but re-connecting with these audiences to drive them further down the funnel will not be possible. 

 

Although these solutions could ultimately become viable alternatives, they are not fully ironed out yet, and are not likely to be ready for use in the immediate future. However, retailers don’t have the luxury of waiting. They need to acquire customers now and get into a good place by 2023, when third-party cookies become relics of the past.

 

 

Collaboration unlocks efficiency in the cookieless world

 

 

Solutions already exist to help retail brands make the most of data in their media strategy without relying on third-party cookies. All share one key trait: collaboration.

 

Collaboration fuels the solutions for today

 

Publisher Alliances and Paywalls. These alliances aim to help large publisher groups build robust data, increase their communities or subscriber bases, and challenge walled gardens such as Amazon.

 

For instance, Piano partners with some of the largest news, media and content companies like The Wall Street Journal, CNBS and NBC Sport to create a consolidated end-to-end targeting solution. They consolidate zero-party (i.e., data explicitly volunteered by users, for instance, when filling out a registration form) and first party data to create a more accurate targeting solution.

 

 

Identity Graphs via Customer Data Platforms. CDPs present an improved targeting opportunity as anonymized data can be collected across touchpoints and unified to match users. 

 

For example, dentsu have recently announced the integration of identity resolution platform, Merkury, with Salesforce’s CDP. Through this partnership, brands using Salesforce CDP will now be able to unify data into person-based customer profiles, and segment and activate these profiles across channels without reliance on third-party cookies. 

 

 

Second-Party Data Partnerships.

 

First-party data is the most reliable and robust source of data, and in the cookieless era will be even more precious. Through collaboration, brands and retailers can develop mutually beneficial data sharing agreements.

 

For instance, Walgreens Advertising Group has announced new opportunities for brands to reach audiences powered by Walgreens’ first-party data when buying TV, through integration with OpenID. This solution opens interesting possibilities for brands, such as advanced targeting (e.g., targeting a product category) and performance measurement (e.g., tying campaigns to in-store purchases).

 

From a legal perspective, it’s important to ensure the partner brand has properly collected the explicit user permissions for data sharing. Additionally, marketers should keep in mind that data can have a short lifespan and that data attributes can be incorrect, which is why consumer identity management is important to ensure accuracy.

 

 

There will likely not be one silver bullet solution to the deprecation of the third-party cookie. Instead, brands will need a combination of solutions to support full-funnel planning and measurement. In the meantime, we encourage brands to engage in collaborative approaches to unlock valuable first-party data, and explore how they can develop a relationship with consumers that is rewarding for both sides by becoming more mindful of people’s privacy concerns.

 

At dentsu, we have extensive identity capabilities to support your brand. To get started or get further with your data strategy, contact us today. Download Shopper DNA: The Future of Retail here.