30 second summary:
- Google's market-leading Chrome browser uses a signed-in Google account. Facebook requires personal logins to access its ubiquitous platform.
- Marketers who wanted to efficiently reach consumers outside of the walled gardens have long relied on a third-party tracking cookie.
- Now, Google has announced it will be phasing out third-party tracking cookies in Chrome and the industry has panicked.
- The Vice President of Ad Operations at Octopus Interactive shares the new perspective and potential of a post-cookie world.
Facebook and Google consolidated their dominance in the digital advertising world due to their unique personal identifiers. Google's market-leading Chrome browser uses a signed-in Google account. Facebook requires personal logins to access its ubiquitous platform. Marketers who wanted to efficiently reach consumers outside of the walled gardens have long relied on a third-party tracking cookie. By tracking individual users across their browsing activity, an entire ecosystem has emerged that has reached a balance, balancing the needs of publishers, advertisers and the technology providers between them.
Now, Google has announced it will be phasing out third-party tracking cookies in Chrome and the industry has panicked. Indeed, many companies are having to adapt their wholesale business models to accommodate these new reality and privacy concerns.
The future doesn't have to look bleak for advertisers and publishers, however. While some stakeholders are losing the tracking and attribution capabilities they are accustomed to, a return to the first principles of marketing will benefit consumers, publishers, advertisers, and the wider digital ecosystem.
The return of context
In the short term, giant companies like Google and Facebook will continue to control real identity. Some workarounds are already in place and rely on grouping cohorts to reach the right consumers with the right message. Targeting advertising to groups of cohorts with similar characteristics is one way of achieving some achievement. However, it does not allow frequency limitation to increase scalability and efficiency.
Instead, advertisers and publishers need to work together to return to first principles like contextual advertising. By targeting advertising based on the actual content it is published next to, consumers are more likely to see relevant ads and resourceful publishers can make money accordingly. Context targeting has long been treated as an add-on in the industry, and advertisers and publishers need to prepare for a future where context is far more important.
At a higher level, contextual advertising also makes philosophical sense. Advertisers know an entire generation of consumers as numbers and attributes. A thoughtful return to contextual advertising means the industry needs to consider the whole person, not a collection of abstractions. This may be a challenge for many advertisers who are used to performance and efficiency, but it also offers an opportunity to build brands and relationships.
keep calm and carry on
Given these developments, some in the digital advertising industry are rightly concerned about the uncertain future. However, if there is one thing that 2020 has taught us, it is that nothing can really be taken for granted, and the old platitude says that change is the only thing that stays constant.
For those who are concerned, I would like to ask for calm and reflection. There is too much money and too many smart people in our industry for us to give up everything in wholesale. It's a virtual certainty that the advertising industry will find a way to move forward – outside of the walled gardens and without the helpful tracking cookie.
Part of the solution requires finding efficiency in locations other than the media spend. Well thought-out creative and more targeted targeting leads to a better customer experience. New channels like addressable CTV will fill some gaps, and things like Digital Out of Home (DOOH) will gain traction. Measurement and engagement proxies like visibility and video completion rates are becoming increasingly important.
In the end, the digital advertising industry will be forced to move away from the one-on-one goal that we have been committed to for too long. It will make our entire industry smarter and better. There will be some problems along the way, but the future of digital marketing outside the walled gardens has every reason to seem bright.
Ryan Bricklemyer is vice president of ad operations and product development for Octopus Interactive.