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The Cookieless Present: Preparing for the biggest change to digital that too few people are talking about
January 18, 2021
Macy Edwards, director of digital paid media – ClickThrough Marketing
With the end of third-party cookies on the horizon, the importance of first-party cookies is growing. Google, Facebook, Amazon, and Apple have the biggest first-party data sets in the world. With their heavy reliance on accounts, subscriptions, and purchases, over the last few years, they have dominated the overall market share. This change will have little to no impact on them but this isn’t the case for everyone.
These tech giants are the walled gardens in ad tech and remain the biggest challenge to publishers and advertisers in the future without third party cookies.
Currently, 88% of cookie data is lost, causing upper-funnel activity to continually be under-reported by 41%.
Why is this happening?
Since 2017, we have seen GDPR leading the way, with Google and Facebook making similar changes. With the announcement that third-party cookies will be removed from internet browsers, Safari did this in 2017, Firefox in 2019 and Chrome (which is accountable for 60% of browsing transitioning over two years to do the same) looking to do so before 2021.
The digital era was meant to bring transparency and certainty around marketing measurement, enabling advertisers to evaluate and optimise their media spend.
In recent years programmatic advertising has become a main player in this approach, but with the many digital measurement issues we face today, at the forefront remains the continued reliance on cookies for targeting and measurement. They are inherently unstable yet they make up the backbone of digital measurement.
The limitations of cookie-based measurement explained
A study by flash talking in Q4 2017 found that for a typical advertiser 64% of cookies were rejected. This leads to reach being overstated by roughly 89% and frequency and conversions being understated by 47% and 41% respectively.
Consequently, a reliance on cookies leads to a 36% decrease in reported return on ad spend (ROAS) and there is the true limitation. If we can’t report accurately on upper-funnel activity, how can advertisers make the case for its importance in the digital marketing strategy?
What is cookie rejection?
In 2017, Firefox led the way with removing third party cookies. Cookie rejection occurs when browsers block a cookie being placed or deletes it afterwards. This has been driven by consumer awareness of tracking and increasing privacy concerns. This is having a major impact on advertisers. It means is all the impressions before a click are lost, even though Google released an impression-based beta to enable advertisers to see the impact of the impression on their conversions.
Over the last 18 months, data has become more and more fragmented. Users are likely to see ads across a number of platforms before converting but, with cookie based tracking, there's nothing you can do with that data.
Cookie rejection hurts advertisers in three ways:
1. Wasted spend: the understatement of metrics in reporting leads to wasted spend as the likelihood is ads are serving twice as much as we think.
2. Missed sales opportunities: due to the understatement it is impacting the value of the media and limiting our ability to reach prospects and drive new conversions.
3. Blind spending: as this obscures the path to conversion, it limits our reliance on data resulting in us relying on intuition which then results in underperforming media.
Consequently, we are looking for cookie alternatives for multichannel tracking and measurement, and better mechanisms to collect first-party data, enabling us to measure delivery and results at every stage of the funnel.
By evaluating metrics that accurately reflect performance, marketers can make better decisions on channel allocation and creative development, therefore driving a greater ROAS.
What does this mean for advertisers?
We are moving away from a focus on cookie-based audience data towards a focus on user experience and behaviour.
Cookies have been used for years but we need to get smarter, as cookies not only slow down websites but are unreliable and impact on the customer experience they are meant to improve. Users want a seamless personalised experience so I recommend focusing on four key areas:
· Creative: Eye-catching visuals and messaging has never been more important. Users want to self-identify with brands and buy into them. If your message is compelling enough, you'll achieve this.
· Contextual Targeting: Old formats will be coming back, most importantly theme-based targeting. As a user we typically sit across many audience verticals e.g. looking to buy a house, recently married, shopping in luxury stores etc. You’ll be able to drive personalised creative for users with intent without them being identifiable.
· Cookieless Tracking: Invest in an alternative, this is going to be available from us shortly. If you don’t work with us there are a lot of ad tech firms releasing cookieless options and Google will likely release their own soon.
· First-Party Data: Grow your own audiences. The risk is that the search ecosystem will become a maze of login pages so, think about how you can grow subscribers, customers who are engaged and returning, and a hyper-personalised advertising strategy that customers love to experience!
There are a lot of changes and uncertainty but at the same time, we will have more control in the long run. Expanding our partnerships and strategies to drive better performance, evaluation, and measurement to inform future growth.
To learn more about how to approach the Cookieless future and limit the loss of cookies' impact on your reporting, you can download our free eBook 'How to Prepare for the Cookieless World' - a free guide on what Cookieless tracking will mean for your advertising campaigns.
This article originally appeared in ClickThrough Marketing’s 2021 Digital Marketers Playbook – available for free download now.