The Cookie Conundrum And The Future of Audience Targeting

What good is a marketing strategy if we’re unable to use cookie-based data?

In case you haven’t heard, it’s what can be aptly referred to as “every marketer and advertiser’s biggest nightmare”:

Soon, all major browsers, such as Google Chrome, Firefox and Safari, will have blocked third-party cookies.

In other words, we will be living in a cookie-less world.

It is crucial for businesses to take the right steps now to be well-positioned when the cookie restrictions kick in.

Oddball Marketing CEO Mike Sandys recently discussed the cookie conundrum with Arielle Bowers, Creative Director & Founder of Two Giraffes; Kristin Hancock, Director, Font & Swatch; and Christopher Melotti, marketing, social media and copywriting aficionado, and Founder of Melotti Media, who moderated the webinar.

Other topics explored on the night included the steps businesses should take to prepare for the change, and what new technologies will be useful in audience targeting.

Following are some key points that came out of the webinar.

Cookies: What Are They And How Do They Work?

Cookies are little files that are saved within your browser which store pieces of information that can be continually used across a website – particularly your login details, so you don’t have to log in to each page you visit.

They can also store your preferences for things like news sites, etc.

If you use online systems like Salesforce or eBay, you will appreciate how cookies allow you to stay logged in to the website.

Cookies Are A Good Thing

They are a critical functionality of many of the websites we visit everyday.

If you have ever done online shopping (as most of us have), this technology is what allows us to store our cart details.

It also allows for the quick filling out of forms and other details.

It’s a convenience that really improves how we interact with websites.

First- vs Third-Party Cookies

First-party cookies are the ones that are saved in your browser when you visit a specific website.

Much of the controversy and issues are related to third-party cookies as these belong to different domains than the one you’re visiting.

These are an integral part of how advertisers serve ads to you.

While the technology is great, it’s how that technology is used which becomes the real issue.

Security is a major concern, as well as the ability to ‘know’ about the user and their behaviours.

Where And How Cookies Are Being Used

Retargeting ads
Storing stateful data (e.g. the items you’ve added to your shopping cart on an ecommerce site)
Retaining data previously entered into forms (autocomplete)
Saving user preferences
Authentication – communicating user’s account details and log-in status to account-protected servers
Recording user activity

According to a Pew Research Centre study, 72% of respondents feel that much of what they do online is tracked, while 81% believe the risks they face are more substantial than any benefits they may receive.

The real issue here isn’t so much the technology, but how the technology is – and can be – utilised. There are many benefits to it, but there are also serious concerns about how it can be used.

Most significantly is the capturing of personal information and the invasion of privacy.

It’s the data that a cookie captures which is the biggest concern for individuals.

The Current Approach To Digital Audience Targeting

Third-party cookies

Audience profiling

The issue is privacy and protecting it

It’s more about anonymity. We don’t so much mind that we’re tracked and that we can have more relevant content served to us, just so long as no one can identify us.
Look at MAIDs. The concept here is great for marketers in that we can profile an ID without knowing who it actually is.

Advertisers have long benefited from third-party data.

Businesses typically build marketing lists with data pulled from their customer relationship management systems for email and direct mail campaigns.

But marketing and advertising will eventually learn to accept and use that first-party information routinely and consistently.

Keeping Things In Perspective

A majority of tracking cookies are already rejected by browsers anyway.

An ad-serving firm analysed 20 advertisers and more than 5 billion impressions in the fourth-quarter of 2017, and found 64% of their tracking cookies were either blocked or deleted by web browsers.

The rejection rate on mobile devices was higher — at 75%, compared with 41% on desktop.

Why Does The Future Look Different?

This isn’t new news.

Some browsers like Safari have been making it easier and easier to stop cookies/tracking.

In fact, they have been one of the most proactive in improving privacy within browsers.

This was all done last year with Safari already blocking third-party cookies. Why hasn’t it been an issue? Because they are still relatively small compared to Chrome.

While we would like to think that Apple really cares about its customers, it’s most likely more of a commercial decision where they can differentiate themselves from other large corporations like Google and Facebook, who rely heavily on knowing all about us.

In June of this year, Google announced it would delay its ban on third-party cookies on Chrome until sometime in 2023.

Other Factors Influencing The Future Of Audience Targeting

US and European Legislation – GDPR means that any website that targets Europe must allow you to ‘opt-in’ to having cookies used on your browser.
Audiences are opting out

What Impact Will This Have?

Retargeting and lookalikes may disappear
Tracking conversions will be harder
Converting will be more challenging

This will have a serious impact on marketers and marketing behaviour, so we must work hard to come up with new ways to learn more about customers.

In a world without third-party cookies, publishers, businesses, and advertisers would have a chance to align themselves again.

By doing so, incentives would be fixed and writers’ relationships to valuable, informative, and entertaining content would be repaired.

Advertisers or publishers could no longer manipulate the media users consume on the internet behind the scenes, so users can enjoy the media more freely.

Potential Marketing Response

First-party data collection platforms are more valuable
Contextual advertising will increase
Cost-per-display may reduce, but click cost may increase
Shift to social media and customer engagement campaigns
Content creation will become even more valued

It will be especially advantageous for companies who impose paywalls or require users to log in, as they’ll be able to track their users’ behaviour directly. Others will need to use new data-aggregation methods due to significant fragmentation bias.

A best-practice cookie policy should always make clear:

Who might have access to the personal information;
How long they will have access for; and
The purpose of collecting such information.

Tips To Prepare For The Future

Audit and assess the impact
Focus on your first-party customer data
Increase use of walled gardens
Identify aligned website funnels
Develop engaging content
Consider traditional marketing mediums

Brands that are able to create innovative customer experiences will win in the post-cookie era.

Investing in a first-party data strategy will help you achieve higher engagement levels, as you become more knowledgeable about your customers.

And businesses savvy enough to search for clever ways of replacing cookies – while still providing meaningful and personalised ads – are already hard at work.

“As a marketer, honestly, I don’t really want to know who you are specifically,” said Oddball Marketing CEO Mike Sandys. “Sales are a bit different, as they need to know who you are to be able to convert you to a customer.

“But for me as a marketer, I actually don’t need to know you personally. What I do want to know is how you behave and what your interests are. Then I can make sure the messaging and communication I do with you is what you would find valuable and useful,” he said.