Tag: Cookies Deprecation

The loss of third-party cookies will completely disrupt the digital media ecosystem. While most advertisers think about third-party cookies in the context of targeting, they are used across a variety of tools that span data collection, audience segmentation, data onboarding, and, most importantly, measurement.  

How Google’s deprecation of third-party cookies impacts consumer privacy online

The deprecation of third-party cookies by Google will change the way consumer data is used online. With fewer third-party tracking cookies, there’s less opportunity for widespread tracking of user behaviour across different websites. This shift means consumers have more control over their personal data by allowing users to opt-in vs opt-out of data sharing. This will force companies to explore new consent incentives and test alternative tracking methods. 

For instance, there will be a significant move towards the collection and management of first-party data because of the numerous benefits it offers, such as improved data accuracy, enhanced customer relationships, greater data control and security, and more effective personalisation strategies.

The elimination of third-party cookies will also significantly alter the data compliance landscape. Companies will need to focus more on obtaining explicit consent for data collection while aligning with a mishmash of regulations across geographic regions, with  GDPR and CCPA. This shift could also prompt new regulations specifically addressing alternative tracking technologies and first-party data collection practices to ensure the data company is consensually provided.

Challenges and opportunities that brands may face as they shift from third-party to first-party data collection

Brands face fundamental challenges such as the need to invest in new technologies for first-party data collection and the potential reduction in the amount of available consumer data. This new reality will present opportunities, including building more direct and meaningful relationships with customers, gaining accurate and relevant data that can inform customer interactions, and enhancing brand trust and credibility. 

The key is to align on a strategic vision and select the right data management solutions to achieve it. Ones that are scalable, user-friendly with out-of-the-box analytics features, compliant, and capable of integrating seamlessly with existing martech and other systems.

Companies should revisit their data governance policies to ensure compliance with privacy regulations and ethical standards. This includes implementing robust consent management systems, ensuring compliance, and being transparent about data collection and usage practices. Investing in management and security to protect first-party data is also crucial. 

Finally, it’s important to remember that while many CDPs offer tools and features that can support compliance, transparency, and security, they are not a complete solution in themselves. Companies must actively manage these aspects in line with their specific needs and regulatory requirements.

How the Privacy Sandbox and other similar initiatives balance the need for user privacy with the commercial need for targeted advertising

Initiatives like Google’s Privacy Sandbox aim to create technologies that allow for user privacy while still enabling targeted advertising. These initiatives may involve using aggregated, anonymized data or machine learning algorithms that process data on the user’s device without transmitting sensitive information. 

But while Google’s Privacy Sandbox is beneficial from a privacy standpoint, it limits the depth of data brands are used to working with. They should not rely on Google to provide the data or tools they need to power personalisation capabilities compared to what first-party data used with a CDP offers.

CDPs consolidate diverse data sources to offer a comprehensive view of customer behaviour and preferences, excelling in personalisation through detailed segmentation and targeted campaigns. This contrasts with the Privacy Sandbox’s limited use of personal data.

CDPs stand out with their real-time data processing, enabling immediate responses to customer behaviours, a feature less emphasised in the Privacy Sandbox. They offer businesses direct control and ownership over customer data, allowing more flexibility in data management and use. This control is crucial, especially compared to dependence on third-party platforms like the Privacy Sandbox.

Additionally, CDPs offer customisation to meet specific business needs and integrate with other tools, creating a tailored tech stack that may not be as achievable with the Privacy Sandbox. They also support compliance with various privacy regulations, such as GDPR or CCPA, enabling responsible and ethical data management while still deriving valuable insights.

The role of artificial intelligence and machine learning in the cookieless era 

The alternatives to replace third-party cookies for tracking and data analytics purposes we’re already seeing include first-party data activation tools, the return of contextual advertising, data clean rooms for measurement and collaboration, and AI. By using AI and machine learning for predictive analytics based on first-party data or using blockchain for transparent and secure data transactions.

As reliance on third-party cookies decreases, AI and machine learning will play a more significant role in marketing. As we move forward, it’s becoming increasingly clear that brands must embrace new AI-driven methodologies to effectively acquire and retain customers. This shift isn’t just about keeping up with technological advancements; it’s a response to intensifying business pressures and evolving consumer demands.

From a business perspective, the pressure is mounting for efficiency, scalability, and the effective use of data to drive greater returns. In this landscape, AI’s role is crucial. For CMOs, delivering a greater return on investment has emerged as the primary objective for 2023, underscoring the need for a more sophisticated, data-driven approach.

However, this shift isn’t solely about the numbers. Consumer demands are equally influential in shaping this new paradigm. There’s a growing concern among consumers about how AI and their personal data are used. They expect brands to be not only conscious but also responsible in their data utilization. Furthermore, as consumers become more willing to share their data, they anticipate a higher degree of personalisation and relevancy in their interactions with brands. They want experiences that are tailored to their preferences, delivered at the right time, and through the right channels.

The intersection of business efficiency and consumer-centricity is defining a new era in marketing. Brands that successfully navigate this landscape by leveraging AI in a responsible, consumer-focused manner are poised to thrive in this dynamic environment.

How brands can ensure transparency and maintain trust with their customers during this transition

Brands will maintain consumer trust during this transition by being transparent about their data collection and usage practices. Regular communication with customers about how their data is being used and providing them with greater control over their data will foster trust. Additionally, keeping pace with and adhering to growing privacy regulations and ethical standards is key.

There is no silver bullet to replace the third-party cookie, and advertisers have the opportunity to reimagine their digital media tech stack. In fact, we’re seeing that brands that leave the cookie environment now are experiencing a competitive advantage and will continue to do so since most of the industry has not shifted their reliance on 3P cookies.

This article is written by Peter Ibarra, head of adtech solutions, Amperity

The insight is published as part of MARKETECH APAC’s thought leadership series under What’s NEXT 2023-2024. What’s NEXT 2023-2024 is a multi-platform industry initiative which features marketing and industry leaders in APAC sharing their marketing insights and predictions for the upcoming year.

Digital advertising spend has increased, and is forecasted to grow even further. Dentsu forecasts that ad spending globally will grow by 8.7%, and that around US$738.5b will be spent worldwide this July. As part of that growth, tech companies are very eager to dip into the adtech industry, as well as improve business performance within other adtech companies.. Data from WARC suggests that globally-recognised Big Tech companies will take up about 10.0% of all worldwide ad investment by 2030.

However, as much as there is activity within the adtech industry, companies are on the brink of losing more investment, ranging from factors such as waste of ad expenditure, online misleading content, and ad fraud. These reasons, in turn, become some of the biggest issues within the adtech space, with the large majority of adtech companies rely on third-party data to carry out their advertising strategies. This is evident with the fact that Google has delayed (once again) the phasing out of third-party cookies by 2024, after being previously delayed to 2023. 

And while third-party cookies remain a dominant feature of brands’ success in the adtech scene, there is a rising trend of using alternative ways to improve their digital advertising, from use of zero-party data and contextual targeting to identity solutions.

In our newest The Inner State industry deep-dive, we spoke with three adtech industry leaders: Peter Barry, vice president of addressability at PubMatic; Kenneth Pao, executive managing director at Criteo for Asia-Pacific; and Travis Teo, executive director and co-founder at Adzymic–to learn more about their insights on the current state of the adtech industry–what needs to be changed, and how they envision the industry for the future.

On Changing Adtech Trends: How Do Industry Leaders Perceive It?

Following the changes on Google’s Sandbox Privacy and Apple’s IDFA policies, Teo commented that investment into digital advertising is becoming more industry-specific and sensitive to the macro environment.

“We see shifting of spend into performance related media due to general downtrend of public stock markets, but pockets of industries like travel and entertainment are increasing in spend. Right now, we didn’t see changes in third-party cookies or Apple IDFA, affecting the spends, but we do see advertisers starting to ask questions around these topics,” he stated.

Meanwhile, Pao commented that through these changes, they were able to trigger their efforts to find new ways to engage with consumers, as well as diversify their approach away from retargeting for the benefits of both their clients and consumers. This includes introducing commerce media solutions.

“The approach combines commerce data and intelligence to target consumers throughout their shopping journey and help marketers and media owners drive commerce outcomes. Through this, both marketers and media owners can activate their first-party data and inventory, and package this for advertisers to drive commerce outcomes,” Pao stated.

Delaying Third-Party Cookies: Should We Debate or Move On?

When asked about their perspectives regarding the recent delays made by Google on phasing out third-party cookies, all three agreed that the adtech industry should move towards an ‘open internet’ where consumers’ data sharing preferences are protected in addition to combining data and advertising to create richer online experiences for consumers. 

“As we move towards an addressable media future, Criteo will focus on enabling marketers to manage, scale, and engage their audiences, while empowering media owners to fully utilise their first-party customer data through our commerce media platform strategy,” Pao said.

Meanwhile, Teo noted that there is already a certain fatigue with regards to this topic of cookie deprecation, and that there are more topics within the adtech space marketers and advertisers should talk about.

“At the same time, the industry should move on amidst the uncertainty, and chart its own path forward, instead of relying on Google Alternative. It may be painful initially but will reap the benefits in the future,”

Furthermore, Barry noted that delaying cookie deprecation doesn’t slow their innovation, development and commitment to customers to deliver results for advertisers and publishers.

“It is not good for competition and a healthy open internet when one company makes the digital publishing and advertising world uncertain about what moves to make; the industry should welcome a move away from any one company holding all the cards and should continue to act proactively. The industry should not use this delay to stall; instead this should only encourage us to work faster,” he explained.

Barry also added, “The industry must continue to work together and test privacy-first solutions that will enable safe, data-driven advertising into the future – this news just gives the industry more time to refine technical approaches and drive greater adoption prior to the transition. The move away from third-party cookies is in line with broader global trends around consumer data protection.”

The Big Question: Is Adtech ‘Dying’?

All of the adtech leaders have agreed that the industry isn’t dying after all, but rather advertisers and marketers alike should use the foundational tools and services they have within the traditional adtech space to develop new services that will transition the industry to a more privacy-centric future. 

Teo explains, “I believe the industry will continue to thrive and adapt. We are seeing innovative solutions coming up from various partners in the industry – too many in fact, and the downside is that it can lead to confusion from brands and agencies to understand which offerings can best suit their needs.”

Meanwhile, Pao stated that instead of staying reluctant to prepare for the future of addressability, they should view this as an opportunity to explore innovative tools that can empower them to build up a stronger first-party data management strategy. 

“Rather than viewing the evolution of consumer data privacy as a conflict to existing adtech offerings, adtech firms need to understand that tech tools serve simply as means to the end-goal of helping marketers and advertisers meet consumers’ evolving needs. Hence, as the adtech landscape evolves, the priority for adtech companies remains the same – to help marketers manage, scale, and engage audiences.”

Lastly, Barry said that there is importance in recognising that the deprecation of third-party cookies is in line with broader global trends around consumer data protection, as well as that updates like it should not pause the industry’s work to find new and better ways to deliver relevant advertising to consumers.

“Simply said: we can best serve digital publishers if advertisers get strong ROI from programmatic channels. A focus on helping publishers and brands get the best out of their digital advertising in a cookieless environment will ensure that our solutions remain relevant and useful,” he explains.

What Alternative Solutions Adtech Players Are Utilising?

As adtech leaders become more mindful with the ongoing changes within their industry towards a more privacy-centric one, companies are introducing more alternative strategies to materialise their objectives of veering away from their traditional third-party data-reliant services.

For PubMatic, Barry describes the launch of the company’s ‘Connect’ solution, which ensures publishers and advertisers that could thrive in a world without third party cookies.

“We also launched ‘Identity Hub’ a few years ago, providing a seamless transition from third-party cookies to consumer opt-in based first-party identity, which improves ad personalisation for consumers and provides higher ROI for advertisers,” he said.

Meanwhile over at Criteo, Pao says they are continuing to invest in the growth of their first-party data powered ‘Commerce Media’ solutions, including their ‘Retail Media’ offerings. According to him, they aim to build a unified platform and data source for marketers and media owners that will enable responsible addressable media for the future.

“Over the past couple of years, our solutions have grown to span the entire consumer commerce journey, from discovering brands and products for the first time to ensuring the best opportunities for a sale, to making each subsequent visit more profitable and privacy-safe,” Pao said.

He also added, “Ultimately, we’re using innovative adtech tools to remain laser focused on meeting our end-goal – helping marketers and media owners work with consumers to create a transparent and vibrant open internet for all stakeholders.”

So, What’s Next for the Adtech Industry?

The addressable media and more involvement from more brands tapping into the adtech space: these are the factors adtech leaders see as the future of the adtech industry. For context, addressable media is defined as the type of advertising that connects brands with individual consumers across multiple online advertising platforms, social media, OTT (over the top) content providers, and smart TV platforms.

“The future of adtech will continue to be bright and at the same time getting more competitive and more fragmented. You can see that big global companies like Netflix, Disney, Apple, and regional players like Grab, Carousell are aggressively entering the adtech fray, each offering their own media and data solutions,” Teo explains.

Pao also agrees with this, stating that it is time that we see these changes as opportunities to test new methods for engaging consumers online and approach them with an open mind as the industry moves towards an addressable future in an open internet.

“Four in ten [brands] [in APAC] say their current marketing practices rely on third-party cookies, and that they’re concerned about the elimination of third-party cookies. Brands and marketers should prioritise building up their first-party data strategies and invest in solutions throughout commerce media platforms to help analyse and execute data-driven consumer engagement. Only then can they remain future-proof as the industry evolves.”

Meanwhile, Barry notes that the future of adtech is evident with both publishers and advertisers moving away from walled gardens because they aren’t aware of what’s going on with their investments on those platforms.

“We know there is more change to come as the programmatic industry grapples with the future of identity, and buyers access a much wider array of inventory. We, too, will continue to innovate and evolve to maximise control and value to both publishers and media buyers. This is only the beginning of the next phase of programmatic,” Barry stated.

Singapore – As the future of cookie-based customer engagement is slowly crumbling, businesses must learn how to leverage their own data strategies, including the implementation of first-party data use to optimise their customer experience, the latest survey from outcome-based marketing organisation Epsilon shows.

According to the global survey, over 60% of surveyed brands suffer from incomplete customer profiles relating to gaps in first-party data held on customers, while only 17% of surveyed brands have advanced first-party data strategies that give a holistic, near complete view of their customers. In addition, about 24% of respondents have data that is fragmented and siloed by channel or business function, disabling their ability to adapt to changes in customer behaviour quickly.

Patrick Sim, senior VP of APAC and MEA at Epsilon, said, “The decay of cookie technology is now forcing many brands to alter their strategies to meet changing customer expectations. Moving forward, CX practitioners and marketers should conduct frequent assessments of their data management and customer engagement strategies to deliver loyalty-winning customer experiences and boost customer lifetime values.”

The survey also noted that over 40% of those surveyed are in the early stages of rolling out first party data capture strategies, indicating a shift in identity data management. In terms of considering the effects of cookie deprecation, 61% of respondents plan to alter their engagement strategies. In selecting a solution provider and identity resolution partner to assist in managing customer identity data more effectively, accuracy (77%) and compliance (68%) emerged as the most desired traits, beating cost (2%).

Sim added, “Campaigns run on third-party platforms rarely provide customer intelligence to companies, and this lack of intelligence in the system leads to a vicious cycle of continued dependency on these platforms. The solution is to invest in owned platforms and software for customer engagement, allowing for relevant, timely and compelling communication.” 

He further noted, “Businesses need to prioritize gaining an understanding of their data footprint and enhancing their data strategies, which must include capturing and leveraging first-party data to drive optimal customer experiences.”