The cookieless future is here at last. Are you ready?

The cookieless future is here at last. Are you ready?
Nick Henthorn
Wednesday, January 31, 2024

I know what you’re thinking - yet another blog/article with a massive cookie image. But bear with me.

Four years ago, we were among the first to celebrate Google's decision to phase out third-party cookies in Chrome because we knew they were always an incomplete and unreliable surrogate for real consumers, and we were more than ready for advertisers to stop pursuing scale at the expense of privacy. But I must say that the repetitive postponements since then have been frustrating. They've held back innovation and given too many across the industry a reason to procrastinate instead of "ripping off the band-aid and moving on," as Lincoln Gunn, VP of Programmatic Revenue, Operations & Data Partnerships at Fandom so aptly put it in one of our podcasts more than a year ago.

You've seen the movie: a comet is hurtling towards Earth, a planet killer, and instead of banding together to avert the apocalypse, our leaders decide to sit tight and assess. If no one looks up, perhaps the whole thing will simply go away, right?

But surprise, surprise, the cookie apocalypse is really happening: “As of 4th January 2024,” Google just announced, “Chrome has started restricting third-party cookies by default for 1% of Chrome browsers." By Q3, 2024, it will be 100%. Time to face reality.

Loss of addressability

For brands and media owners that haven’t yet transitioned to a different way of powering data-driven advertising, the most direct consequence of the deprecation of third-party cookies is that they’ll lose their ability to address consumers on the open web.

It’s far from an isolated case: While the countdown has officially started, 75% of marketing leaders around the world are still heavily relying on third-party cookies for their digital campaigns, according to a recent Adobe study, and half of them don’t have the resources to explore alternate solutions. They’re pinning their hopes on the emergence of a direct replacement to the cookie, something that “fits in the exact same slot,” as Justin DeBrabant, SVP, Product at ActionIQ explained in a recent interview. “But it doesn’t work like that. Brands looking to just swap out acronyms without shifting their strategy are going to find themselves going through this whole process again in two or three years as the technology and privacy landscapes shift once more.”

If a one-to-one cookie replacement is out of the picture, what is in? Proactive marketers and their agencies have been collecting and curating first-party data for some time now, and that first-party data has done wonders to insulate them from the crumbling cookie-based ecosystem and unlock dramatic new efficiencies in their marketing operations. Renault, for instance, used InfoSum’s data collaboration platform to match its customers with lookalike audiences from Axel Springer All Media (ASAM), and the French automaker improved ad delivery to its target segments by 38%. As a result, its cost-per-action dropped 19% compared to a cookie-based campaign, and its conversion rate rose 18%. That’s a big deal in an industry with razor-thin profit margins.

First-party data is not just a way for marketers to maintain addressability. It’s an investment in the long-term value of their relationships with customers. There’s no greater ROI guarantee in today’s highly competitive marketplace.

Identity implications

Does that mean that all the pressure to collect and maintain actionable customer data now falls on your shoulders? Not at all. There are great data suppliers out there that don't depend on third-party cookies to maintain their identity graphs and rich datasets. Use them. There are too many moving pieces for you to keep track of every relevant detail about your customers and prospects. They change addresses, emails, and phone numbers. Many change their names, too. They have children, get married, take trips, and start using apps to order food instead of going out. They switch devices and streaming services. While the buck stops with you when it comes to owning—and not abusing—the relationship you have with your customers, teaming up with the right data partners can help you connect with the right consumers and build a durable connection with them.

At its Marketing Symposium last year, Gartner provocatively suggested that data integrations had grown too complex and that achieving a 360-degree view of the customer was now a pipedream. Marketers shouldn’t give up hope, though. Privacy-safe data, collaboration gives marketers all the tools they need to achieve a holistic view of their customers. In the first-party data world, it’s impossible to know everything about your customers and prospects from your data alone, as your customer data will only ever represent a partial view of your audience. Companies who cash in on the second-party data opportunity will be able to fill in knowledge gaps and build a more complete view of who their customers are and where to find them.

What about match rates? Directly matching first-party data sets requires a common identity key, but not all data sets share the same key, which is why InfoSum developed Identity Bridge. This solution empowers marketers to boost match rates by using any identity partner or vendor to ‘bridge’ datasets where a common identity key isn’t present or where match rates are below expectations. Our clients are using Identity Bridge to boost addressability, enrich their customer profiles, create new audiences and activate them seamlessly across their martech stacks—all without a single cookie in sight.

Of course, there will be cases where the data you’re able to assemble will come up short. There’s a concept in CX and web development called ‘graceful degradation.’ You want to build your apps to take full advantage of new browser functionalities, but if the user is using an older browser, you still want them to have a maybe-not-as-good-but-still-fulfilling experience. I like to think of third-party data the same way: Always use the best data available, but if a piece of data is missing because cookies or other digital connectors are gone, and there’s no easy way to fill that gap or model the missing data, consider developing graceful experiences around the data you have.

Impact on measurement

Finally, I’d like to draw your attention to the implications of the deprecation of third-party cookies on marketing measurement and attribution.

With cookies gone, many cross-channel attribution models are about to lose their connective tissue. In a recent column for Advertising Week, my colleague Lauren Wetzel pointed to the current situation as a unique opportunity to reinvent measurement. Large models like multi-touch attribution (MTA) and media mix modeling (MMM) can’t easily keep up with all the changes taking place in the marketplace today. New channels pop up all the time, consumer behavior is harder to predict, and we can’t say that the macroeconomic environment is all that stable either. Solutions like MTA and MMM are too expensive for anyone but the largest brands, and they often take too long to have an immediate impact on campaign tactics. 

But other measurement methods built on first-party data, like incrementality testing, can step up and save the day. The trick is to be able to bring together media exposure and conversion data onto a company’s preferred measurement platform without exposing anyone’s identity or personally identifiable information. To accomplish that feat, we just released a radical new solution: Private Path.

Built on top of our data clean room technology, it provides a step-change when compared to traditional crosswalk solutions. Private Path enables companies to securely deliver outcome and impression data to any internal, external, or third-party measurement environment for advanced analytics and measurement - without ever combining, exposing, or compromising personal data. Circana, Experian, ITV, NCSolutions, S&P Global Mobility, and Tesco Media & Insight Platform powered by dunnhumby are among those already using it, and we’re really fired up about all the new data partnerships—in measurement and beyond—that Private Path is about to unlock for our clients. 

Time to look up

The end of third-party cookies has finally arrived. It’s time to “get over our hesitancy and accept that change is here,” Christopher Reher, General Director Data at Axel Springer All Media said to me in a recent InfoSum podcast. “There are so many discussions still where people hope that it's going to be postponed once more, and the old business models are going to work out. I sometimes wonder how such a future-focused industry like ours can be so hesitant to make a move.”

I totally agree with Christopher. We have all the right solutions in place. It’s time to look up at the incoming comet and change marketing for the better.

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