When Google announced its decision to delay the rollout of its FLoC protocol by another year, it gave marketers, developers, and research professionals a bit of respite.
But this was just another reminder of what little control marketers have in the build up to one of the most decisive moments in the industry’s history: the death of the third-party cookie.
It doesn’t have to be that way though. Google’s decision gives those impacted by the death of cookies some breathing space to prepare for the coming changes. Even so, the clock continues to tick.
Marketers must focus on the areas of their marketing effectiveness they can control, regardless of which identity technology prevails.
The irony is the media and advertising sectors have some of the most risk-averse professionals of any industry according to our research.
But in this fight for internet privacy, these same individuals now stand before a crossroads, where every direction seems teeming with risk and uncertainty.
Do they helplessly take a “wait and see” approach, or do they innovate?
We believe now is the time to innovate. Doing nothing is riskier than taking action.
What’s the damage?
Third-party cookies and Apple’s IDFA identifier – used by advertisers to track users on iOS devices – have formed the basis of how digital marketing is executed. Marketers use these tools to target audiences and measure interactions.
iOS devices are used by around 30% of global internet users. The latest iOS update now gives these users the option to disable tracking on their apps thanks to Apple’s new App Tracking Transparency (ATT) feature.
This means marketers are now struggling to address some of their most affluent and lucrative audiences. iOS users are more likely than non-iOS users to be flying first class and to be purchasing from luxury brands. They’re also more likely to say they tend to buy the premium versions of products, and that they’re loyal to the brands they like.
On top of this, Apple has been blocking third-party cookies by default on its Safari browser since 2018, with Firefox following suit in 2019.
By removing these identifiers, marketers are left with a burning hole in their vision.
We can see just how big of a hole we’re dealing with here.
In the U.S. alone, almost 30% of consumers are browsing via Safari, with 23% using Firefox; both of which are more popular among younger groups. But it’s not as straight-forward as looking at individual browser usage, because people tend to use more than one browser (1.6 in the U.S., on average). So combined, users of either of these browsers make up 46% of U.S. consumers.
Apple and Firefox may have disabled them years ago, but Google’s decision to block third-party cookies is considered the death knell of these trackers because Chrome is by far the most dominant browser among most age groups.
In the U.S., 70% have used it in the past month. Combining users of any of these three browsers, that leaves at least 88% of U.S. consumers on browsers which no longer support third-party cookies.
Put another way, the vast majority of your audience are about to become a lot more elusive.
First-party data is great, for some.
The truth is, tracking technology and identifiers were never that accurate in the first place.
As LinkedIn’s B2B Institute point out, gender targeting in programmatic data can be about as accurate as flipping a coin, at around 50%. Age is even less accurate.
Third-party cookies allow advertisers to aggregate these data points to make inferences on people, not just in terms of demographics but also in terms of what they’re interested in or what they’re in the market for.
Simple browser plug-ins allow users to see their own identity according to inferred cookie data, and they’ll often find surprising or sometimes contradictory information.
High quality first-party data can provide richer and more accurate information, and many consider this to be the foundation of a successful post-cookie data strategy.
But in an ad ecosystem where first-party data rules the day, fortune favors the large.
So-called ‘walled gardens’ are only achievable with enough critical mass in identified users. This is no problem for platforms like Facebook, Google, Amazon, and Apple. Even some publishers like The New York Times, Bauer and News UK are strengthening their first-party data offering as it becomes more valuable in the post-cookie landscape.
This is clear to see in the chart below, where for argument’s sake we’ve looked at the reach of these platforms among a conventionally attractive audience to advertisers: first/business class flyers.
Whether it’s first class flyers or the online population at large, these platforms can reach the vast majority of audiences. With such colossal user bases, there’s less of a need to share their first-party data.
But for premium publishers with their own first-party data, there’s more of a need.
This is why we’ve seen publisher alliances like OpenAP and Ozone Project. These alliances bring together leading publishers to offer advertisers cross-platform campaigns by sharing personal, anonymized first-party data.
Going back to our example of first class flyers, using a handful of random publishers gives us a sense of the value these alliances can bring considering their reach and crossover.
But what happens if you don’t have the traffic, partnerships, or the right measures in place to collect quality first-party data at scale?
Say you’re a smaller publisher whose content isn’t actively sought out compared to premium publishers, or perhaps an advertiser in an industry traditionally further removed from the end consumer. Even those in a position to collect first-party data might struggle to find the right partnerships to share this data and see beyond their own environments.
For these advertisers and publishers, third-party cookies have helped fill the gaps in knowledge about consumers, and they gave their campaigns scale.
They allowed them to know something about groups of people they had little interaction with. Remove these cookies from the equation, and large groups of consumers suddenly disappear out of view.
Moving towards a more mature understanding of identity.
Relevance is bigger than personalization.
Just 30% of those who want ads to be relevant to their identity also want ads to make personalized recommendations.
People want to see themselves reflected in the ads and products they’re shown. Relevance is a major factor in peoples’ expectations of ads (28% say this), and it’s also an important motivation for advocating a brand online (30% say this).
It has such a bearing on the success of marketing that a lack of it has led many to try and switch off from ads altogether. Almost 40% of ad-blockers say they do so because ads aren’t relevant to them.
It’s a brand safety factor too – around 40% of consumers in the UK and U.S. say irrelevant ads would negatively impact their view of a brand. Over-targeting and over-frequency of ads are also key detractors.
There’s a deeper foundation of relevance that becomes accessible when we start thinking beyond pixels to understand a person’s identity.
An identity can’t easily be decoded based on someone’s recent clicks, searches, website visits, or even their location. Given the accuracy of third-party cookie modelling as well as the popularity of device sharing, the flaws in using these to build an identity profile are compounded by the inaccuracy of the modelling itself.
Using tracking technology, you can target me on the 50/50 certainty that I’m a male. You can also target me if your analytics believe me to be a millennial. And unless I’m one of the 27% who use a VPN, you can also target me based on my location.
Even if your analytics are correct, that’s not really my identity in this context; my identity is much more complex and nuanced than these factors alone let on. To complicate matters further, self-identity differs between consumer groups.
Our data on sources of shared identity sheds some light here. Age, location and especially gender are fairly minor aspects of a person’s identity compared to traits like interests, hobbies, humor, and life experiences.
By taking the “wait and see” approach, marketers risk having the rug pulled out from underneath them.
By acting now, they can seize the opportunity to think more holistically about their marketing and data strategies, prioritizing human solutions to truly understand their audiences and communicate with them more effectively.
The future of digital identity is being decided by a handful of companies, so to bet on an ID-dependent digital marketing solution right now can be risky. It’s better to consider the aspects of marketing effectiveness that are under your control, creating a more sustainable marketing vision in the long run.
Regardless of which identity technology becomes the dominant solution, understanding your audience at a deeper level and how to connect with them is one of the few things you can control.
Here at GWI, we’re developing ID-agnostic capabilities that can anonymously append survey data to both universal IDs and FLoCs, in ways that do not compromise consumer privacy or media performance.
Integrating the wealth of information that our audience data provides into these ecosystems can enrich the capabilities of ad tech players. It can help them reach their target audiences, measure the impact of their campaigns, make digital advertising more relevant, and, ultimately, help maximize the return on their advertising spend.