Regardless of where the cookie crumbles, identity is a must-have in 2024 - here's why

By Tim Glomb, vice president of digital, content and AI, Wunderkind

In the ever-evolving landscape of digital advertising, the impending demise of third-party cookies is forcing marketers to reevaluate their strategies and seek innovative solutions.

Google's bidding farewell to third-party cookies by the end of 2024 marks a significant turning point, urging advertisers to explore alternatives. While some may be reluctant to abandon the familiar comfort of third-party cookies, it's time to acknowledge that identity resolution offers a more advanced and effective approach to understanding and engaging consumers, especially ones that are anonymous to the brand.

Let's face it, third-party cookies have been the go-to tool for tracking user behavior and personalizing ads based on browsing history. However, the recent holiday shopping season — which actually kicked off well before Black Friday and Cyber Monday this year — illustrates the limitations of relying heavily on cookie-driven ads to drive revenue.

The traditional retargeting tactic, where cookie-based ads are aimed at recent unknown site or app visitors, is generally expensive, resulting in significant margin erosion (if it works at all). But during holiday periods, ad inventory is scarce, pushing costs to a premium while their effectiveness drops like a rock, as consumers are inundated with a barrage of ads at every turn. It’s a period of banner ad blindness on steroids.

In contrast, brands partnering with performance marketing solutions that have an identity graph can go beyond the constraints of cookies. They can greatly increase the number of opportunities to re-engage consumers by identifying large percentages of unknown traffic using first-party data. Brands can and should also enrich their own opted-in profiles with zero-party data via a variety of value exchange techniques such as polls and feedback tools.

Partners that can help brands identify more traffic can now lean on higher-performing owned channels like email and SMS to close deals. This shift from costly ads driven by cookies to one rooted in email and SMS can be a real game changer. In fact, Wolverine Worldwide ($2bn+ annual rev) was able to increase the number of emails it sent following cart abandonment by 300%. This resulted in a 20% increase in annual email revenue. In this 37-second video clip, Rachel Waldstein, senior director of customer lifetime value at Wolverine Worldwide, explains how an identity solution delivered the lift.

Identity supercharges your owned channels, and your ability to increase revenue while decreasing ad spend. Owned channels are also more intimate and can be hyper-personalized. This combo gives brands the ability to navigate the complexities of customer data, context, and artificial intelligence. A trifecta like this not only ensures a more nuanced understanding of consumer behavior but also empowers brands to deliver personalized content and offers precisely when they are most likely to resonate.

The result? Enhanced revenue generation on owned properties, a strategic advantage that becomes increasingly critical as the era of third-party cookies comes to a close.

Wunderkind was able to ID more than half of unknown web traffic generated by more than 100 clients over the course of Cyber Week. These companies were then able to send personalized messaging and offers through email (35 million sent this year, up 13% over last year) and text (17 million, up 27%). That’s millions of shoppers reached through direct, personalized channels that brands previously could not easily classify or contact using cookie-based IP address info alone.

As the digital advertising landscape undergoes a seismic shift away from third-party cookies, finding a solution that incorporates identity and owned channels is not just a strategic move, it’s a necessity. Marketers must recognize the potential of actionable identity solutions to revolutionize the way they engage with consumers, ensuring relevance, personalization, and cost-effectiveness in an era where traditional cookie-driven methods are becoming obsolete.

It's time to bid farewell to the cookie jar and usher in a new era of targeted, intelligent, and effective advertising.