CCPA and a Cookie-less World: The impact on your digital marketing program
Third-party cookies have played an important role in digital advertising for over 20 years. The ability to create and target highly precise audiences with minimal effort fueled the rise of Google, Facebook/Instagram and every other third-party data provider. While cookies have been widely accepted because of their disproportionate benefit to brands, they have come under fire in recent years for how they handle consumers’ personal data and the damage that can be done when that data falls into the hands of bad actors.
Apple, through its Safari browser, was first to crack down on cookie usage in 2017. By automatically disabling cookies on user sessions, the option to engage cookies was now on the user; not surprisingly, few chose to allow cookies. More recently, in September of 2019, Mozilla (Firefox) mimicked Safari’s actions and began blocking the third-party trackers.
If other browsers have taken these steps, then why is it such a big deal that Google/Chrome are now considering the same move? And not until 2022!
The short answer is volume. Apple and Mozilla combined have about 20% of the search market, while Google (as of 2/20) had a grip on well over 60% of browser market share. This means that Google removing third-party cookies will significantly reduce available audience data for marketers and the companies that supply that data.
In fact, on the day that Google announced its new policy, Criteo, TradeDesk and LiveRamp, three of the largest third-party data providers, saw stock losses of 22%, 4.2% and 7.6%, respectively.
The growing momentum around the European Union’s General Data Protection Regulation, the California Consumer Privacy Act and other state-mandated privacy laws has pressured Google, the largest browser, to put privacy in front of profits and prioritize users’ data safety.
This does, however, provide an opportunity for the largest data collectors — Google, Facebook and Amazon — to eliminate third-party data providers and sell targeting data directly to brands in a more significant way than they already do. This concept, known as a walled garden, keeps all the extremely valuable consumer data safely under the protection of these massive platforms.
This provides greater control, but also limits competition, functionally allowing the behemoth data collectors to control the advertising cost model. Google’s first foray into the full control of the ecosystem will roll out in a product known as the Privacy Sandbox. Google will ensure data quality and protection, while anonymizing the rich targeting info that brands need in order to reach their audiences. Information on the full functionality of the tool is still limited.
Here are the implications for advertisers:
- Prospecting data – This will be most affected. Those lookalike audiences we all use to reach customers who look like our targets are going to be tougher to come by or be solely provided by the Big 3.
- First-party data — Active collection and activation against rich first-party data is going to become even more important. Brands are going to have to do a strong job of giving potential customers content/offers/etc. compelling enough to entice consumers to listen. If a brand is lucky enough to get an email address, follow and engagement with a possible new customer, the brand is going to have to give them value, choice and an experience that keeps them around long enough to buy. While we all should be doing this, it is not easy.
- Publishers Unite! — While Google, Facebook and Amazon hold the prevailing market share, they aren’t the only brands with large user bases. Look for publishers like Verizon, Comcast, Microsoft, AT&T, Hearst Communications etc. to sign partnership agreements to share and protect data while still providing a personalized advertising experience.
- Contextual Marketing — A topic long forgotten will likely see a rebirth. Advertising on sites that align with products or services will see an uptick. We are accustomed to advertising to the user that shares an interest in our product anywhere they go – which frankly is the creepy part of programmatic. Now we may have to advertise towards the context of our product, i.e. I see running shoes and I advertise on sports-related sites.
Long story short: The dynamics of the advertising ecosystem are in flux due to privacy regulations and the consumers’ desire to navigate online more safely and securely. However, these new changes firmly put the economic power of billions of advertising dollars into the hands of a few organizations. Advertisers need to take an internal inventory and assess whether they are providing value to their constituents and engaging with them frequently, or just buying their way to the top. For those doing the latter, the ride could get a bit rocky over the next few years.
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