How the Death of Third-Party Cookies Will Benefit Your Digital Data Strategy

By James Purtle On Apr 13, 2020

Ever since Google’s bombshell (albeit not entirely unexpected) news in January that it plans to phase out third-party cookies on Chrome by 2022, the AdTech industry has been rife with dramatic speculation. Does the loss of third-party cookies on Chrome change the Marketing landscape? You bet it does. But should advertisers be panicking? Absolutely not.

In the long run, reduced reliance on third-party cookies will prove positive for marketers. Here’s why.

Improved Audience Accuracy

Google’s curbing of third-party cookies is an effort to bolster privacy on the web. This is good news for consumers, as there will be increased control and transparency into how personal information and behavior is being used on the web. But it’s also good for advertisers because – and I hope you’re sitting for this – cookies are unreliable, both in quality and consistency.

The death of the cookie will increase reliance on first-party data environments, which are more accurate for audience targeting, but also help prevent wasted spend on bot traffic or bad inventory.

Going forward, while advertisers and agencies will focus even more on titans like Google, Facebook and Amazon, players in OTT, CTV and consumer giants like Walmart and Target are also rapidly enhancing their digital marketplaces in anticipation of increased demand. These platforms offer their own robust first-party data resources while also allowing brands to bring their own assets to the table.

Overall, with anonymous third-party cookie data accounting for a smaller part of the equation, you can be increasingly confident that your basic demographic and interest targeting strategies will more reliably reach your audiences.

Of course, there is a major caveat: While these walled gardens will deliver accuracy at scale, they are also problematic in terms of cross-channel measurement, and much of the advertising landscape in the future will be shaped by how these key players enable third-party tech and data providers to participate.

In this regard, advertisers should not lean back. Now more than ever, brands should advocate for increased access and transparency in walled gardens to ensure they’re having 1:1 interactions with consumers, who are increasingly sensitive to clumsy marketing and expect relevant, personalized messaging.

Advertisers should also invest in their own Data Science infrastructures to best address cross-channel measurement and attribution, as well as targeting and personalization. Sophisticated Data Science practices will become table stakes as increasingly complex algorithms dictate user content and relevance. Simple attributes and segmentation techniques of the past are less and less competitive to data-driven AI-to-AI Marketing.

Persistent Identity Technologies Are Improved Cookies

As third-party cookies disappear, persistent identity technology, combining Personally Identifiable Information (PII) and Digital Identity Resolution, will also grow in partnership with publishers and buying platforms eager to replace lost third-party cookie ad revenue. While this transition may be painful for publishers, better targeting will result in more valuable inventory, driving up the price of media by delivering better results for buyers.

In this way, persistent identity technology is often described as an improved cookie. The question is whether these solutions will meet the evolving privacy standards set by Google and driven by consumer demand.

For this reason, persistent ID providers are wisely developing their solutions with a privacy-by-design approach to ensure transparent opt-out mechanisms championed by GDPR and CCPA regulation, but it remains to be seen if these solutions can effectively balance core marketing use cases (e.g., retargeting) without violating the spirit of these privacy policies.

Direct Data Relationships Will Improve Quality, Reduce Costs

Going forward, advertisers, publishers and data providers will return to a model where they work more closely together when concepting, developing and executing campaigns—and the results are going to be all the stronger for the direct collaboration.

Data providers have a vested interest in knowing whether their data is being put to effective use and driving ROI for brands. In the current data exchange-driven landscape, however, most data providers never receive valuable feedback on campaign performance to help advertisers optimize their efforts or to incorporate learnings back into their product enhancement cycles. Working more closely with data providers will better ensure quality and create incentives for data providers to supply custom audiences and pricing options tailored to advertisers’ unique Marketing challenges.

At the end of the day, Digital Advertising will continue to thrive on the other side of Google’s third-party cookie sunsetting, but now is the time for advertisers to have important foundational conversations with key platforms and data partners to lay the groundwork for a smooth transition into that brighter future. By deploying data-driven cross-channel targeting and attribution strategies along with persistent identity solutions to facilitate AI-to-AI communications, marketers will find a winning formula for the future.