As we kicked off 2024, like many within the media industry, I had the pleasure of heading to Las Vegas to attend CES 2024. As a former consultant in recovery and a dedicated industry observer, CES provides a unique opportunity to read the barometer of the industry. Reflecting on this year's event, my biggest takeaway is that strategic data-driven alliances forged through robust data collaboration will be the cornerstone of the advertising industry's evolution this year.
The looming deprecation of third-party cookies, once perceived as a distant threat, has now materialized into a reality, with Google beginning its blocking of third-party cookies on January 4th for 1% of its user base. From every conversation I had last week, it is clear that this seismic shift is rightly being perceived as one of the most pivotal changes our industry has witnessed in recent memory.
Grieving the loss of third-party cookies
Here's the elephant in the room: third-party cookies were an unsustainable tool for the purpose the industry designated them. They were not designed to be surrogates for identity, so they have failed to deliver what the industry needed. As we begin the journey to the final cookie deprecation, my reading of the room at CES was that much of the industry is going through the typical stages of grief. Currently, many find themselves at various points, whether it be denial, anger, or bargaining. Many are clinging on to an antiquated way of working, rather than accepting the inevitably of the first-party data era.
The sooner the ecosystem can progress towards the acceptance stage, the better state the industry will be in. Embracing the inevitable enables us to seize control of our destiny sooner rather than later. Instead of lamenting the loss of third-party cookies, our focus should shift toward innovative solutions that can fill the void left by these deprecating tools.
The rise of data alliances
In the wake of the demise of third-party cookies, data alliances are emerging as the connective tissue that binds the advertising ecosystem. These alliances are crucial and present a unique opportunity for collaboration among brands, media owners, and media agencies. However, their success hinges on two pivotal factors.
1. Multi-Party Value Exchange
In the traditional context of the business landscape, conversations surrounding value exchange predominantly centered on the symbiotic relationship between consumers and brands or media entities. The crux of this interaction lies in delivering products or services in exchange for customer data. However, a crucial evolution in value exchange emerges as the industry undergoes a profound transformation marked by increased collaboration among businesses.
Unlike the conventional value exchange we’re used to discussing, a multi-party value exchange involves two or more collaborating entities mutually defining their expectations and commercial value from the collaboration at the outset. This proactive approach ensures clarity, transparency, and alignment of objectives, laying the groundwork for a productive partnership.
2. Technology as the Enabler
The technology underpinning them is the second critical factor influencing the success of data alliances. The lesson learned from the demise of third-party cookies is clear – choosing an unfit instrument inevitably leads to a day of reckoning. The industry must select technology that supports multi-party value exchange and guarantees that each entity retains full control over the data involved in the alliance.
Importantly, consumers cannot be relegated to the sidelines in this technological landscape. They are integral players in all data alliances, and their privacy must be prioritized. As we navigate the post-cookie era, ensuring transparency and safeguarding consumer privacy will be paramount.
The Role of Data Clean Rooms
One solution stands out in this era of data alliances and data collaboration – the data clean room. These environments facilitate the exchange of insights without compromising individual privacy or data integrity.
By leveraging a data clean room, businesses can establish trust among collaborators, laying the foundation for fruitful and ethical data alliances. The inherent security and control features ensure that sensitive information remains protected, addressing concerns often accompanying data collaboration efforts.
Importantly, data clean rooms protect the interest of all members of our multi-party value exchange, not only the companies collaborating, who protect the commercial value of their customer data, but also consumers, whose privacy is prioritized.
As we embark on the transformative journey 2024 promises for the advertising industry, strategic alliances fueled by data collaboration will be the driving force. Embracing acceptance, fostering multi-party value exchange, and selecting the right technology are the keys to success in this new era.