The cookie crash is not just changing the way organisations collect data, it could change the relationships that marketers have with their ‘trusted advisors’ for years to come…
The cookie has crashed. And with it, one of the most significant periods in digital advertising history is coming to an end. Google started its phased approach to blocking third party cookie tracking in Chrome at the beginning of this year, and in two years’ time that process will be complete. The news raises a huge issue for marketers. Many will have a significant proportion of their 2020 digital advertising budgets aligned to digital data sources that largely rely on third party cookie tracking capabilities. And unless they’re primed to respond, that could quickly prove problematic.
Let’s start from the start: what are third party cookies?
Third party cookies record a customers’ search and engagement behaviour on the internet. Organisations take that data and monetise it by estimating specific interests or intent audiences, which a marketer’s advisors (typically a media agency) purchase to better target their own advertising activity.
A rule of thumb is that the more you observe and analyse, the better your forecasts or estimates. But with the death of the third-party cookie, inferior tracking observations mean the accuracy and reach of the estimated audiences being sold from these digital data pools is now questionable. Ultimately the risk of squandering advertising budgets grows significantly.
So why kill them?
Even before Google’s recent announcement, the accuracy of the estimated audiences being built and sold from third party cookie tracking was under question. There were obvious limitations; Third party cookie tracking wasn’t truly effective on mobiles, behaviours across devices weren’t linked, and data would only be live for a small window of time before all information became lost. That’s before you even get into the well-documented privacy concerns, too.
So they weren’t the supposed silver bullet in the first place. And Google, Facebook and Amazon knew they could do better, too. These behemoths all have specific interests or intent audiences available to purchase, that don’t rely on third party cookie tracking and therefore offer better accuracy and reach. Significantly, because the audiences Google, Facebook and Amazon sell are constructed from known individuals signed into their ecosystems, they’re more effective too. Plus they work on mobiles, track across devices and have a longer lifespan (unlike third party cookies, which self-destruct after 24-hours).
All of this makes a big difference to their success. And with these alternative options built and ready to go – and backed by the biggest of big hitters –no wonder the cookie inevitably crumbled.
How should marketers respond?
Google has essentially, in one announcement, pulled the rug from under the feet of organisations who offer products or services heavily reliant on the usage of third party cookies. And reaction from the industry has been, it’s fair to say, mixed. Already it’s sparked numerous experts calling foul, whilst other commentators are celebrating what they see as much-needed action.
For clients, scrutiny is going to have to increase on those who advise them. During a period of such disagreement and confusion, where those within the industry take differing stances on best steps going forward, the risk for clients is to rely too heavily on advice from their current ‘trusted advisors’, which could come with a hefty heap of bias.
Why such bias? Look at it this way. When using a mortgage advisor, you want to know if the advisor really has a full view of the market, or whether they’re incentivised to promote one financial institution over another.
That’s the same issue in the current digital media landscape. What was once seen as a move to bring in independent expertise now comes loaded with baggage, and, over the coming months, some marketing directors may find that their advisors do not have the access and perspective they may have hoped. These advisors may be investing in lower quality data pools than the higher quality, readily-available data pools from the Google, Facebook and Amazon ecosystems, simply because these agencies are aligned with networks offering inferior data solutions.
And word on the street is that the integration of the various ‘data experts’ recently acquired by agency networks hasn’t gone well. These experts may not be as aligned as expected or understand data quality and its usage – or how to interpret responses – as effectively as may have been hoped.
Asking the right questions
So until there’s greater overall transparency in this area – or an entirely impartial Rating Agency put in place – then healthy scepticism is always going to be required. As a client, make sure you’re using this time to ask your advisors four key questions about your digital data pool investments:
1. Can I change my digital targeting plan for 2020?
2. Does the digital data reach solution I’m investing my marketing budgets in, use Persistent or Perishable IDs in its Identity Resolution to observe repetitive behaviours and flag audiences of interest?
3. Over what period were the observed behaviours gathered and how much of the internet or users’ usage was observed?
4. Is your solution up and running in the UK and can you show me evidence of uplifts?
These questions will ensure that you’re covering all the necessary bases and being provided with clear guidelines and true transparency that’s critically required at such a crucial juncture. Think of your digital advertising like a Jenga stack – how many blocks in your stack are invested in ‘Prime’ data sources (those that don’t rely on third party cookies) versus those invested in ‘Subprime’ data sources (those heavily reliant on third party cookies to target customers)? The more ‘subprime’ blocks you have in your stack, the more you need to remove in order to shift your investment to a more effective marketing. The more blocks you have that need to be removed, the more chance of that stack falling to pieces.
But because we know how important this is, our data team has tried to paint clients a clearer picture of the current digital data pool landscape. We’ve researched the freely available information on the digital data pools being sold, including looking at how the various types of data were collected and enriched. Then, to give clients a clearer picture of how useful the current advice they’re getting may be, we’ve classified and ranked each data category by accuracy and reach.
To do this, we’ve focused on
1. Whether there’s ‘Persistent ID tracking behaviour’ throughout the ecosystem, or whether we still see ‘Perishable IDs’ that self-destruct in 24hrs. Just how many websites are being tracked before an interest group is being created to sell on?
2. Whether the reach within the ecosystem is optimal, and whether publishers are signed up to UK solutions.
3. Whether the solution is a subset of another ecosystem in the frame already. And as such it’s likely to create scenarios where you are paying twice, exposing some prospects to at least twice as many ads as you’d like.
Ranking digital data pools in the UK: How much of your advertising budget is at the risk of being squandered?
The ‘x’ axis here represents reach, rising from subprime to prime. The ‘y’ axis represents accuracy, again rising from subprime to prime. As you can see from the arrows, the Media Agency Platforms offer perishable IDs, whilst the Walled Garden Platforms offer Persistent IDs. When both addressable reach and accuracy are subprime, we call that subprime2 which is what those Tech Provider Platforms in red are. But when both addressable reach and accuracy are prime, then we call that prime2 which is what the likes of Google and Facebook in blue have achieved. Then, somewhere in the middle, you have the Media Agency Platforms. Whether their place on the chart is in the pink or orange circles depends on their connected observations (therefore accuracy) and addressable reach.
When it comes to finding your place on the chart, it’s not about covering all subprime² and prime² bases, it’s making sure you’re getting the best return on investment for your clicks.
Prime² - The Data sources using persistent IDs / known customer / PII matching to collate as a stream of customer engagement events with products/content to accurately infer interest groups AND to have a target audience present in an ecosystem with optimal reach in the UK
Subprime² - The Data sources heavily reliant on using third party cookies to event stream customer engagement with products/content to accurately infer interest AND present in an ecosystem with low reach in the UK
So what’s next?
If the industry continues moving this way, then you can start to imagine an advertising crisis, one where clients begin to distrust the advice of their familiar experts. The signals and research that we have reviewed is confirming that advertising networks have inadvertently created their own subprime digital data pools. And if not rectified and managed correctly, this could cause huge long-term problems.
For Marketing Directors, the message is clear. It is of paramount importance that now is the time to review your 2020 digital advertising plans. To speak to your trusted advisors and find out their true point of view on your exposure to risk. And to establish a clear, confident agreement on how your digital advertising budget is allocated to your digital data pool going forward.