Between China and the end of the cookie, advertisers need more than one master plan
The third-party cookie is on its way out, but the transition won’t be the same everywhere. We speak to programmatic experts about why brands will have to operate differently in China, and whether alternative solutions will be ready by next summer.
Havas’s Liting Spalding says advertisers will have to pursue a two-handed strategy in China / Unsplash
As the industry continues preparations for the inevitable (albeit long-delayed) demise of the third-party cookie, agencies are busy testing alternative solutions and prepping clients on what’s coming next.
Despite the globalized nature of the media buying and planning sector, however, brands committed to advertising in mainland China will have to maintain a two-stroke strategy according to Liting Spalding, head of audience planning and programmatic at Havas Media Group.
Speaking to The Drum from Shanghai, she points out that the major walled garden platforms – operated by web giants such as Alibaba and Tencent – are unaffected by the cookie’s deprecation and provide on their own third-party data solutions. Advertisers pursuing an approach that prioritizes first-party data across the rest of their operations, for example, will need to use a different plan in mainland China.
She explains: ”This is a completely different ecosystem to what is used internationally, including in APAC. China’s mainland is very unique in that sense.”
Bytedance (which operates Douyin, the Chinese counterpart to TikTok) and WeChat both tie users’ behavior throughout e-commerce, social media and other utilities to their mobile numbers, giving them ”very accurate” means of segmenting audiences.
”China is such a big market, it just can’t be ignored,” says Spalding. ”The strategy is very different and a lot more integrated.”
To deal with incumbent Chinese demand-side platforms (DSPs), and to continue cultivating relationships with those walled gardens, brands need media agencies with boots on the ground. ”It requires such an intensive local knowledge in order to have the right structure to achieve your ultimate business outcomes,” she says.
Accordingly, Havas Media Group is looking to rapidly grow its headcount in the country, with the aim of acting as a ”connector” between China and the international market. ”We have to expand local teams,” Spalding says, to balance ”a local skillset with an international mindset”.
Thinking internationally, Joe McKenna, head of programmatic at mSix&Partners, is confident that alternatives to the third-party cookie – whether first-party, zero-party or some new third-party form of data token – will fill the breach, eventually. ”We’re not naive enough to think that there’s going to be one solution,” he explains.
Instead, he says: ”There’ll be a mosaic of solutions required to deliver the same level of media we currently do. That might contextual targeting, which is going through a renaissance, but that won’t the answer to everything.”
He tells us that Google’s own replacement for the cookie should provide ”a level of addressability” to clients, while newer developments on the agency side mean ”you can do more matching of first-party data, in ways which are going to be more compliant and more private and more scalable than what we currently have in place.” Plenty of advertisers in the global north have begun ”a huge transition to cookie-less foundations” and he says mSix has seen ”great performance” in testing.
”Whether those solutions are going to be ready and raring to go from day one, I’m in the middle ground on.”
Given that the cookie’s demise has already been delayed at least once, he notes that ”anyone who has confidence, based on that history, is probably incorrect”.
Still, advertisers and suppliers are working to meet Google’s vague deadline of summer 2023. Sturae Hickley, digital agency delivery manager at GroupM, says: ”There are many tech companies that are ready. Everyone is gearing up to it. There’s a lot of testing that needs to be done, but in my personal opinion, you can see [advertisers] gearing up for it next year – perhaps in January.”
McKenna adds: ”I would really advocate for any advertiser to explore those opportunities now, because I think there is a first-mover advantage in terms of social issues.”
One major obstacle preventing advertisers leaning more heavily on first-party data is publishers themselves, he suggests. ”I’ve seen it work really well, but I’m hesitant to fully lean into cookie-less solutions on that side until some really robust and rigorous testing has been done, but I think there is progress being made. There is progress being made with technologies such as data clean rooms, which are helping.”
The resources and expertise required to meet that demand are likely only available to the largest media owners in the market. As advertisers come to prize high quality first-party data, smaller publishers could get left behind. That, in turn, could disenfranchise alternative media outlets from advertising, thus complicating brand efforts to reach diverse and non-mainstream audiences while scrutinizing their media spend.
Hickley says that first-party data bundling could help bridge that river. She predicts an industry focus on ”having publishers bundle up your data, and that data then becoming available within a DSP for advertisers to use”. McKenna too points to existing consolidated data solutions, such as that offered by Ozone.
The development of alternative data solutions is likely an opportunity for agencies dealing in programmatic media, says Hickley. ”From a transparency perspective, it’s an opportunity to kind of gain trust again from an advertiser perspective and from a consumer perspective,” she says. Furthermore, the agency’s own focus on supply path optimization (SPO) in recent years provides a logical on-ramp for data alternatives. ”It’s a natural progression and because we’ve already looked at implementing [SPO] as a framework, we were already gearing up to it.”
McKenna agrees: ”The eradication of third-party cookies could quite easily be misunderstood as the end of programmatic media as we know it. There absolutely will be changes – there needs to be, in terms of how we buy audiences, how we buy media and how we use data – but it’s not all doom and gloom. The way that we see it is, it’s a huge opportunity for innovation.
”It should eradicate and remove poor actors, people who use data unethically or immorally or without the correct level of compliance. Those guys will drop out of the market and it will inadvertently clean up the industry.”
Media approaches have to be ”meaningful” going forward, says Spalding. ”Ultimately, your strategy shouldn’t be based around just tracking people’s behavior without them knowing, to be honest.” Even the idea of consensual tracking should be scrutinized harder, she says, because users typically don’t give informed consent in a meaningful way. ”A lot of people give consent just because they want to use the contents of a website.”
She agrees with McKenna that contextual approaches should yield better results in the long run. ”This has actually proven quite effective. It’s less about that individual and how you track their behavior and more about the content and how you reach those communities.”
When married up with universal ID systems, she says, the industry may be able to offer advertisers the chance to get ”closer to the audiences that brands actually need”.