THE 1% PROBLEM (w/cookies)

Like the cable company, Google’s cookie-less service person will appear sometime between January 1st and March 31st to disable 1% of third party cookies from Chrome users. When that switch is flipped to the “off” position, 0.6% of all web browsers will lose 3P cookies all at once (assuming Chrome is 60% of the market).

The ambiguity of the date and the random scaling of cookie deprecation makes it really hard for companies and marketers to plan. Case in point: At last month’s DMEXCO conference, where the world’s madtech elite gather every year, it was clear that advertisers’ preparedness at the annual event seemed considerably lacking .

So rather than pick a random date in Q1, let’s assume the change goes into effect on January 1st with deprecation progressing every day through the end of the year at the same daily loss rate. Thus, if we lose 0.274% of Chrome 3P cookies on January 1st, and end with losing 100% of cookies on December 31st, the daily cumulative loss chart looks like this:

Outcome: Every 90 days, we lose 25% of Chrome cookies. If 50% loss is the tipping point, then we have until June 30th to modernize our methods. Otherwise, any cookie-reliant business is threatened with extinction.

With so little time left between now and June 30th, I find it interesting just how much of the industry seems to be in a state of disbelief, inaction or indecision.

THE FEW, THE PROUD, THE PREPARED

The post-cookie transformation challenge is a global one. While GDPR has tempered industry reliance on 3P cookies in Europe, a recent Adobe study indicates 75% of global marketers rely heavily on 3P cookies for things like customer experience, let alone advertising use cases.

A few other fast facts on the depth of cookie-reliance from the study (per recap writing from the likes of MarTech ):

• 45% of marketers are spending at least half their budgets on campaigns and other activations based on third-party cookies
• 64% plan to increase their spending on cookie-based activations in 2023

Therefore, it should be no surprise that the commercial damage is expected to be significant, with 75% expecting the end of 3P cookies to hurt their business:

• 37% percent expect a moderately negative impact
• 23% expect significant harm
• 16% said the end of cookies will be “devastating”

When you add up companies that expect significant or devastating harm, the result is 4 in 10 companies that rely on 3P cookies are at risk of going under by 2024. And yet, 49% of leaders “can’t get the resources” to solve for what they know is inevitable, per the Adobe study.

Summary:?

Companies who have invested and prepared for the end of cookie days will have a strategic advantage over the 75% who are playing catch up after 3 years of disregarding the inevitable.

Congrats to the few, the proud, and the 25% who have a plan for preparedness!

BEING PREPARED ISN'T ENOUGH

Feeling you’re prepared is certainly a good thing, but not if preparation resulted in being too focused. For example, from a targeting standpoint, moving away from 3P data could result in over-consolidation of spending in places like Meta (see my last post ) where scale of attributes and audiences abound. According to HubSpot’s survey , that’s exactly what is happening, with 55% of respondents saying they will increase Social Media spending simply because they’re exploring alternative means of audience targeting.

Meta should thank Google. Maybe a gift basket or Edible Arrangement is in order.

While marketers love easy and scale, and the performance people get their dashboard data, the consumers get the same flat ‘impressions’ and ‘experiences’ in social feeds over & over again. Maybe start by asking if there are other considerations like are those audiences people or bots? Is there anyone substantiating or verifying interest-based targeting and the consent that's required to provide it? Short answer - we can do better.

So that’s the bad news. The good news is that right behind Social Media in the survey is collecting 1P data from customers at 54%. Fantastic - good to see marketers prioritize their direct relationship with the customer and optimize CX with more complete identities through enrichment and zero-party data.?

However, as we collect more 1P data, the need for accurate and verified 3P data increases to qualify the attributes that lift match rates like postal address. Accurate matching has always been challenging with Truthset’s investigation showing accurate matches happen 51% of the time when using email & postal address as match keys. The article explains the reasons (like multiple email addresses per person; moving; etc) for match rates not being higher, and confirms all parties are working on improving accuracy.?Good, but not yet great.

What the above starts to show is that even future-proof options need to find ways to improve. Maybe there’s something in how B2B and account-based audience approaches targeting that can act as a guide given Bombora’s 74% identity resolution match rate .

Simply put, as an industry, we can no longer settle with so much at stake.

STARTING NOW / NEEDING NEXT

Fortunately, some very smart people and talented engineers have been working on solving these identity problems for years. The tools now available have been built to deliver on scale and speed, which tend to be the harder challenges when building data environments. We are in good shape with what's available off the shelf, even if the utilization needs to catch up to capability.

Starting Now - For starting today, you will need a few things:

• 1P data in a usable format and in an accessible environment
• A secure data collaboration tool allowing for connectivity to multi-location data sets
• A core identity partner that can enrich, scale and add non-PII identifiers when sharing

Example partners for each would be Snowflake (accessible environment), InfoSum (secure collaboration) and TransUnion or Experian (core identity partner). Plenty more to choose from, but those are where I’ve started in the past.

Needing Next - While the above tools get us started, there’s more development needed by the back half of next year if we’re going to stop crawling and start walking in a cookie-less world. These next-wave elements are critical for making better decisions on which data to use and how to value it:

• Data Marketplaces need an overhaul. Decisioning on naming conventions in a DSP search bar is not the future means of selecting the most appropriate data to deliver on the use case. Also, outside of 'open' sample sets, data markets must require owner permission to buy to avoid selling to bad actors.
• Testing Environments are critical for buyers to make informed decisions because they can try samples before they buy the whole thing.
• Independent Validation of consent & assessment of data quality that enters the open market are critical to ensure trustworthiness and that everyone involved - consumers, marketers, publishers, platforms - is protected.

Everyone in the ecosystem is impacted by cookies going away. While many of the implications are positive for the consumer, effort and urgency have to grow universally to steer this ship clear of the iceberg we know is coming. And that goes triple for the 39% with their businesses on the line.