Cookie delay heightens focus on first-party data collaboration
While the myth that Twinkies never expire may have been busted, predicting the expiration date of cookies is becoming increasingly challenging. Despite previous indications that Google would finally deprecate the infamous third-party cookie in 2022, the tech giant last week confirmed that they "intend to begin phasing out third-party cookies in Chrome in the second half of 2024."
While many within the advertising ecosystem will hail this announcement with a sigh of relief, others will argue that the time is now to finally eliminate any reliance on third-party cookies. All parties can agree, however, that it would be a mistake to take the foot off the gas in relation to bolstering privacy and data protection as a part of a first-party data strategy.
Here are three priorities for organizations working to redefine and strengthen their data-driven strategies over the next two years.
A robust first-party dataset should remain foundational to an organization's marketing strategy. First-party data, information collected directly from consented consumers as they interact with an organization, provides valuable insight into current and prospective customers and a critical competitive advantage to maximize planning, activation, and measurement performance.
For brands, building first-party data assets at scale will ensure that they are not dependent on overly commoditized and unstable third-party data to inform their understanding of their customers.
For media owners, the threat of losing addressability is still genuine as dollars continue to move to authenticated inventory that can deliver greater accuracy and performance. The journey from long-tail to private marketplace relationships with advertisers should still be at the top of their to-do list to maximize CPMs and yield. That means investment in deeper and more direct relationships with brands, agencies, and data clean room partners to drive greater ownership, control, and protection over data usage.
Authenticated audiences driven by registrations take time to grow, with consumer trust and governance at the core. This additional runway from Google is an opportunity to establish the privacy-safe pipes required to capture more ad dollars and attention from data-driven advertisers.
In both cases, first-party data is both a reward and a responsibility for all involved. It can provide limitless potential and performance but must be protected at all costs. Consumers will expect something of equal value in return for their data, whether it be offers, discounts, or compelling content. But one thing that will remain consistent is the expectation from consumers on organizations who benefit from their data to prioritize privacy and security.
A positive created by the focus on cookie and device ID depreciation is a greater focus and exploration of Privacy-Enhancing Technology (PETs). While PETs are not a new concept for the data-driven world - the work to categorize and implement these PETs across the marketing and advertising tech stack is just beginning. Regardless of when Chrome eliminates third-party cookies, enterprise organizations need to put the effort in now to understand what technologies will work best with their current processes and future strategies to protect their proprietary assets. It will take significant time to sufficiently test and validate these solutions, so now is the time to act while third-party cookies still exist.
Even with the delay in cookie depreciation, privacy legislation is another driving factor that will accelerate the need for PETs. For that reason, we have seen PETs closely associated with data clean rooms. Data clean rooms have emerged over the past few years to provide both an alternative to the connectivity and common language cookies provided and a new foundation for privacy protection and data governance.
Not all data clean rooms are equal. Some solutions require data to be copied or commingled, while others force organizations to use owned and operated media or identity in conjunction with their data clean room.
Organizations within the advertising ecosystem should start testing and evaluating data clean room and data collaboration technology now to be ready to operationalize privacy across their enterprise before it’s too late.
Another priority for marketers and media companies in a post-cookie world is data collaboration. While first-party data is valuable, it will provide a siloed view of an audience or customer. An automotive company, for example, may know when someone is in the market for a new car but have no insight into consumers' attitudes to the environment and, therefore, their likelihood to purchase an EV.
Data collaboration enables organizations to safely bring data together from multiple internal and external sources to drive deeper intelligence and maximize performance. The goal is to unlock new consumer intelligence through direct partnerships with companies that hold extra pieces of the consumer picture. This intelligence then drives improved media planning, activation, and measurement.
The immediate action for all organizations is to identify other data-rich companies with consumer insights or audiences that would interest them. These collaborations can be as simple as a brand working with a single media owner and matching first-party datasets to build custom audience segments for activation. To more complex multi-party data networks, such as a retail media network, where brands, retailers, media companies, data providers, and identity providers can work together seamlessly to deliver richer customer experiences.
Data clean rooms and other privacy-enhancing technology make data collaboration possible, keeping all first-party data safe and in complete control of each collaborating partner. These new processes and systems will require time to test, learn, and refine. So instead of that line item in your budget for a cookie-replacement remaining untouched - why not invest in the software, strategies, and technology that will drive value, protect your data and eliminate risk now, instead of waiting for the other shoe to drop?
What is the final expiration date?
It is unclear when cookies will finally be deprecated in Chrome, ending this saga. However, the end of third-party cookies is inevitable, whether by the hands of Google, other tech providers, or local and global privacy legislation. All organizations should have a clear plan to grow and unlock value from their first-party data, collaborate with other data-rich companies, implement privacy-enhancing technology that enables safe and secure collaboration, and start testing new solutions today!