March 16, 2021 / Point of View
A major shift is taking place in digital marketing that’s confounding marketers and casting a major pall on the future. In the next year, we will be marketing in a cookieless world in which tracking user behavior online and compiling analytics data to help better target consumers with relevant ads will diminish greatly. While we know consumers will be happier having more transparency and control of their data, marketers should also consider the benefits. Despite the roadblocks for the advertising programming ecosystem, in the long run marketers and their partners have opportunities to innovate and develop more authentic ways to engage with consumers and advertise effectively.
In 2020, digital media accounted for 61% of all advertising spend and programmatic accounted for 84.5% of digital ad spend. These percentages will continue to rise just as the third-party cookie crumbles. When it does, we can expect a 50% decline in third-party targeting accuracy and a 52% decrease in impression-based revenue that publishers are experiencing without third-party data. Marketers will see four immediate impacts to their digital media campaigns.
1. The importance of measurement multi-touch attribution (MTA) models will begin to diminish, while other solutions like identity resolution will play a larger role in understanding the effectiveness of digital marketing campaigns. Ultimately, campaign measurement will become more complex.
2. As the fidelity of third-party data erodes, so will the ability to accurately target audiences for digital campaigns. Advertisers will need to either think or re-think their data strategy and its impact on digital marketing efforts.
3. Targeting and messaging strategies like behavioral and site retargeting will be directly impacted by this loss of cookie data as will other basic campaign optimizations like frequency capping across publishers. Contextual targeting will become increasingly more important to digital strategies
4. Advertisers will need to not only rethink basic targeting strategies but also re-evaluate publisher relationships and the reliance on their proprietary data. Programmatic inventory will begin to shift away from open-exchange inventory to curated relationships and private marketplace ad auctions (also called PMPs) with publishers in order to gain access to proprietary data on their audiences.
Now that marketers know what to expect, here’s how they can pivot their ad-targeting strategies and innovate in a cookieless world.
Audit the impacts
Now is the time to take a deep dive into areas such as your brand’s first-party data strategy and historical media mix in order to better understand how much of your digital plans have been reliant on third-party data versus first-party data. Where are the opportunities for quick pivots and optimizations and what does the road map look like for implementing these changes for your brand?
Invest in platform relationships
As marketing technology has become more accessible to brands and agencies, now is the time to look at the strengths and weaknesses of your brand’s tech stack. How can it help you not only solve for the current shift away from cookies, but also help future proof your brand against other potential shifts and changes in the marketplace?
Reclaim your data
Platforms like Facebook and Amazon have rich user data but they have also gained rich learnings from advertisers who have spent on their platforms. If you don’t have a first-party data strategy, now is the time to start discussing what that road map looks like. Given the sweeping global changes surrounding user privacy and data governance, brands that do not have a solve for this in the near term will have major hurdles to face in the long term.
Identify opportunities for quick wins
Most brands suffer from their organizations being siloed. It’s common for one silo of an organization to have data or information that could greatly inform another (sales and marketing teams, we’re looking at you). Sometimes simply navigating the internal workings of one’s organization can deliver quick wins such as sharing team knowledge or teams working to solve the same problem from different angles. Sometimes brands can create that 1+1 = 3 scenario by simply looking across the aisle rather than operating within their own lanes.
Provide users with a value exchange
People don’t hate advertising but they do hate bad advertising and bad advertising experiences. There are inherent value exchanges in the way people have consumed media (e.p., 22 minutes of a sitcom for 8 minutes of ads). Even though media behaviors are changing, the basic premise remains the same: people are willing to give up some of their time, attention or information if it’s worth it to them. Brands that recognize this concept and apply it to the way they engage with their intended audiences will find audiences who are willing to not only lean in more but also give more of their time, attention and data.
Understanding these challenges and having a media partner with access to proprietary data that allows for robust targeting and premium inventory sources will help deliver solutions and a competitive advantage for brands. The data will be there to inform smarter insights and investments across all programmatic digital channels as well as create more innovative and authentic ways to engage with consumers and advertise effectively.