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The cookie less world is on the horizon

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October 5, 2020 By Laurence Blanchard, SVP, Head of Strategy

We know the demise of the cookie less world is on the horizon. But what does this mean, and how does dentsu X help brands overcome the challenges this brings?

The beginning of the cookie less world

With multiple news headlines covering nefarious data collection methods and data misuse stories, consumers have become aware of how their data is being used and abused. While consumers desire personalization convenience, access and ease they now believe they should receive value for sharing their personal data.

As a result, we have seen a shift in consumer behaviors. Ad blocker technology penetration in the US is currently sitting at 38% for desktop and 25% on mobile2 while the majority of consumers now use the highest privacy setting across all their social media profiles.3 These changes in consumer patterns have also occurred alongside privacy regulation and legislation changes from within the industry, and from governmental bodies.

The EU's 2018 General Data Protection Regulation (GDPR) legislation placed regulation around how organizations collect, store, and use personal information, requiring publishers to get explicit opt-in from users to collect cookies. In 2019 Apple and Mozilla both completely blocked third-party cookies, with Safari further limiting first-party cookie storage. Most recently, in 2020 the California Consumer Privacy Act (CCPA) mirrors the EU regulations. Apple’s release of iOS 14 reduces device IDs, and Google has announced Chrome will block third-party cookies by 2022. Google’s announcement will have the largest impact given their approximately 50% browser market share.

It is important to recognize that cookie tracking will not disappear overnight. dentsu still monitors and continues to activate against billions of cookies worldwide. Google was also very clear they will not retire third-party cookies until their new Privacy Sandbox technology (still in development) solves for current important publisher and advertiser use cases. dentsu, among other industry stakeholders, are committed to working with Google over the next two years to help define a sustainable approach.

However, we should not squander the opportunity to prepare for a cookie-less world, as companies will only be able to use cookies in smaller and smaller domains. As third-party cookies are a long used technology the impact of their demise will be far reaching across activating, managing, and measuring digital media.

How to prepare your business for the cookie-less future?

1. Collect first-party data by offering valuable consumer experiences

In order to continue to effectively deliver relevant messages to consumers we must do more than simply reduce the number of available targeting approaches.

We must include cookie-less models of connecting with our consumers in the near term, to enable us to reach broad consumer audiences in the long term. Put simply, marketers must prioritize their ability to gather, own and manage first-party data, and shift their data ecosystems towards persistent person identity-based platforms. With this approach we can continue to model and deliver addressable reach of actual and high potential customers vs. relying on a shrinking domain of desktop and digital cookies and proxies.

The most effective method to collect first-party data is through owned platforms, so brands that have a well-established digital footprint have an advantage. However, whether starting from the ground up, or advanced on a digital journey, any brand that wants to succeed in the new world must deepen their engagement with their customers and potential consumers. We must explicitly (and transparently) offer consumer value within brand experiences beyond simply a one-way exposure. Whether it is value of utility, entertainment or emotional wellbeing, delivering this experience beyond exposure is how we truly build consumer-centric brands that people want to engage. 

2. Enrich first-party and broaden use case

Collecting and managing first-party data is only half the battle. While tactics that exclusively use first-party data can show great results, (e.g., CRM) we must ensure we are adding to the data, to broaden what we know about our consumers, but also maximize how we use this information.

Using people-based third-party datasets (e.g., IRI or Experian) to enrich first-party data helps unlock greater detail on our audiences, for richer, more informed strategy and media activation. With our propriety tool M1 we are able to leverage the enriched first-party data to understand the traits of our consumer, and how to communicate with them most effectively and efficiently. We can then target media to people who display those same traits through our Publishers Addressable Marketplace, in a cookie-free environment. This ensures we reach high propensity potential customers with meaningful messaging in a data safe way. 

3. Measure with cookie-free techniques

As advertisers we still need to understand the impact of our media in order to learn and improve. While attribution will no longer exist as before, we need to look at incremental-based research pieces through the use of clean rooms.

Walled garden clean rooms (such as with Facebook, Google or Amazon) allow us to run a control vs. exposed test within a data safe environment. But we can broaden this with Private Data clean rooms, which connect our persistent and data-safe M1 ID across a broad range of person-based datasets, allowing us to understand the impact of our media across platforms, within one environment.

Why should I care about cookie-less marketing?

We need to get ahead of this coming change, understanding the implications and pivoting our approach accordingly. The role of marketing and strategic principles shouldn’t change. We still want to build relevant and engaging communications for our consumers, but the method by which we activate them, and measure the results, must.

While there are more tactical changes about which targeting strategies to move away from (answer: behavioral targeting) there is a longer-term need. Brands and advertisers must get closer to the consumers themselves to help understand a holistic picture of who they are and how they traverse the digital ecosystem. Consumer consent for this stronger relationship requires trust and value, which I think we can all agree is moving us in a positive direction towards the original promise of advertising and the internet.

Footnotes:

1 What is a cookie? - Internet browsers rely on small pieces of data known as cookies to identify users. Cookies that are owned by the site visited are referred to as first-party (1P) cookies, while tracking cookies are known as third-party (3P) cookies. The advertising ecosystem primarily relies on third-party cookies to target and measure users across multiple sites, environments and destinations.

2 2019 Global Web Index

3 2020 Consumer Privacy Research by Microsoft Advertising in partnership with dentsu