targeting

Clear history: Google confirms its plans to kill the cookie

March 22, 2021 11:17 Comments Off

In a blog post released on March 3^rd, David Temkin, Google’s Director of Product Management, Ads Privacy and Trust, confirmed that Google would be killing off the cookie, as early as January 2022. He also clarified the tech giant’s plans for targeted advertising and a ‘privacy-first web’. The tech, media and advertising industries have all known this is coming – Google first announced that it would be stopping support for cookies on Chrome back in early 2020, and it is not the first browser to do so. However, the blog post has got everyone talking about Google’s search for alternative solutions to targeted advertising, as well as proposals from other players. So what does it mean? And where will it leave advertisers?

Why is Google stopping support for cookies?

Google, like the other tech giants, has come under increasing scrutiny and regulation around the world, with regulators and lawmakers looking very carefully at the company’s privacy and antitrust record. Indeed, two hires that the Biden administration recently made would appear to confirm that the US will continue to robustly enforce antitrust laws and other regulations. What’s more, there is a prevailing and increasing sentiment amongst internet users that they are worried about their privacy: in research conducted by Pew Research Center in 2019, 79% of American adults reported being somewhat or very concerned about the way their data is used by companies. It’s also as simple as a change in consumer habits: in the third quarter of 2020, mobile devices (excluding tablets) generated 50.81% of global website traffic – a share that has consistently hovered above the 50% mark since the start of 2017. Mobile browsers and apps don’t accommodate web-based cookie tracking as effectively as desktops, so there is a hole in advertisers’ ability to target their users.

What is Google proposing as an alternative?

Google’s statement earlier this month and the ensuing debate makes it clear that the industry is still only in the early stages of redefining how the online media market will work when the cookie becomes defunct. There is still a lot of uncertainty, and the industry is in a period of frantic experimentation, urgently seeking the best way to effectively target consumers with advertising.

In his blog, Temkin promised that Google would not implement new ways to track individual users around the internet, and vowed that the company would only use privacy-preserving technology that relies on methods such as anonymisation and aggregation of data. Google’s Privacy Sandbox initiative, which is seeking ways to protect privacy whilst allowing content to remain freely available on the open web, has plans to start testing one proposal with a group of advertisers in Q2 of this year. This proposal would group internet users based on similar browsing behaviours; only cohort IDs, rather than individual user IDs, would be used to target them. This approach is based on the same principle as Facebook’s, which offers advertisers the opportunity to target ads to certain categories of users based on their data. Google will be keen that this proposal is workable and appeals to brands, as marketers are already diversifying their ad spend up and down the funnel.

Other players are exploring targeting alternatives as well

It’s not just Google with skin in this game: other collectives and ad tech players are also seeking ways to balance privacy with personalised, targeted advertising. A major collective formed last summer, called the Partnership for Responsible Addressable Media (PRAM), has brought together the IAB Tech Lab, the WFA, major advertisers like Ford, Unilever and IBM, media agencies, tech vendors and publishers. PRAM is proposing relacing cookie-based tracking with tracking tied to individual email addresses, whereby a user would log into a participating site with their email address or phone number, which would then be scrambled and used to keep tabs on them as they navigate other participating sites. Google has called this email-based approach impractical, and claims that it wouldn’t meet ‘rising consumer expectations for privacy’, or ‘stand up to rapidly evolving regulatory restrictions’ – and therefore wouldn’t be a sustainable investment in the long term.

Even taking into consideration Google’s motives for casting doubt on whether cross-site individual tracking will meet consumers’ and legislators’ expectations and therefore the wisdom of investing in such a targeting methodology, the tech giant isn’t wrong in its conclusions. Many view this as a bold act by Google – they are soberly letting go of bad habits while others are just trying to cut back on the worst parts and hoping it will be enough. Perhaps Google’s statement was in fact the most helpful thing that they could do for the industry as it approaches this crossroads, pointing out that what they are trying to do won’t work, and they need to start over.

Industry experts aren’t yet sold

While some industry experts and commentators believe that Google’s Privacy Sandbox proposal would be an improvement on the current, cookie-supported situation, others are yet to be convinced. They claim that Google is just swapping one form of invasive tracking for another and could, for example, work out who a user is by cross-referencing their information with an email address from one of Google’s owned sites.

They are equally sceptical about the email address approach, pointing out that it would be easy to ‘reverse-engineer’ a user’s identity by combining scrambled information with other information available in the public domain.

What are the implications?

The implications of Google’s announcement are still unclear, and the situation will continue to unfold over the coming months. It’s safe to say, however, that we will never see anything close to the breadth and width of tracking coverage that cookies have given marketers over the last 25 years. It is thought that the demise of the cookie will affect 85% of online advertising as we know it. New solutions will come from a wide range of different sources and approaches, so will be fragmented. What’s more, a large share of online traffic may not be identified at all; outside walled gardens, contextual targeting is likely to become the main tool. That isn’t necessarily a bad thing – it offers marketers the ability to deliver ads to consumers when they’re in a specific situation or frame of mind, which can only be a positive as consumer behaviour becomes more fragmented and unpredictable. It’s also an antidote to many of the issues around brand risk and safety.

It’s worth bearing in mind that, just because the ways in which we manage reach, frequency and targeting are being fundamentally redesigned, it does not mean that people will radically alter their media consumption patterns, or that there won’t be any ways to target people online. Large sites with good user experience and consumer trust will retain their traffic and they will still be open for ads, even if impressions are anonymous. Ad impact on brand metrics and sales will remain, even when conversions can no longer be tracked. As Google said in their statement, ‘advertisers don’t need to track individual consumers across the web to get the performance benefits of digital advertising.’

How should advertisers prepare and adapt for the post-cookie era?

For now, advertisers need to understand which tools will be lost, which will remain uncertain and which will not change. They should also keep their ad tech flexible and rely on their media agencies for guidance and updates. This is probably not the best time to be investing in ad tech or in-housing.

Looking ahead, even when data outside of Facebook and Google’s walled gardens is scarcer, advertisers should not resort to increasing their spend with these two platforms beyond what is proportional to media consumption patterns. They should also refrain from resorting to last-click attribution as view-through conversions tracking and MTA fail. Survey-based data and insights on brand metrics will undoubtedly surge.

Many advertisers are, rightly, focusing on their valuable first-party data, exploring ways to leverage it in order to make better-informed advertising decisions. Many will seek to work with partners to establish a data-exchange from different sources, including with the walled gardens. Marketers will also be able to integrate their consumer research with their first-party data, giving a clearer picture of what consumers do, and why they do it. This will in turn allow them more effectively target audiences with the best messaging in the best context.

The key takeaway? Hold tight – there’s no need to panic or do anything rash. Alternatives are being worked on and anyway, a world without the ability to track your consumers across the web might not be such a bad place.

If you would like to discuss how you can prepare for the post-cookie era, please feel free to contact us: value@ecimm.com

Header image: atk work / Shutterstock

Why the decline of the online tracking ecosystem could be the start of a golden age for digital advertising

December 18, 2019 12:23 Comments Off

Advertising without digital is like transport without engines. Yes it’s possible and yes there is something quite charming about it, but it’s old-fashioned and less efficient: once you’ve tasted modernity, you can’t go back. Digital advertising has brought us capabilities beyond the 20^th century marketer’s dreams: individual targeting based on behaviour and preferences, as well as cross-device tracking, programmatic buying and real-time optimisation.

Much of that was made possible by the humble cookie, but after 25 years its very existence is under threat. Indeed, tracking online activity is a house of cards that has been slowly but steadily collapsing over the last few years thanks to ad blocking, browsers blocking cookies, the rise of walled gardens and cookie-free environments such as apps, connected TVs and the Facebook stack, and privacy regulations. But what does that mean for advertising? In truth, no one really knows. Should marketers be quaking in their boots? Will programmatic die along with the cookie? Is the cookie even dying? In all the uncertainty, we can be sure of one thing: digital advertising will change and the successful marketer will be the one who adapts.

Look beyond the cookie for reach, frequency and frequency capping

Cookies can still be used to track and control reach and frequency in Google’s Chrome browser, which still has a majority market share in many countries, although its key competitors – notably Firefox and Apple’s Safari – have smart cookie-blocking technologies activated by default. This means that all browsers except Chrome are a black hole for measuring reach and frequency based on cookie data. Furthermore, Google is moving towards an opt-in version of cookie blocking, making the future of cookie-based tracking precarious.

One solution for ensuring that reach, frequency and frequency capping are still tracked effectively is the use of audience verification services, for example Nielsen DAR and ComScore vCE. These services validate delivery, reach and frequency for real human audiences with much less reliance on cookies. However, very few advertisers outside the US invest in these products – we expect this to change as the cookie continues to decline.

A return to contextual marketing

Targeting is another area that will be dramatically affected by the change in the tracking landscape – and nowhere is this truer than in programmatic buying. Much of what we recognise as programmatic buying relies on the cookie and is therefore likely to decline. That doesn’t however mean that DSPs will become useless: marketers will still be able to efficiently handle direct, high-quality publisher deals, as well as buy lower cost, mixed quality data-free inventory across select sites on the open web.

While the ability to target individuals on the open web is likely to decrease with the collapse of the tracking house of cards, contextual targeting is set to explode. Contextual targeting is based on the content the user is looking at, rather than their behaviour profile, meaning that ads are more likely to be relevant to their current activity. It puts an emphasis on the placement of the ad, so is similar in that respect to traditional print advertising – the focus is on producing and distributing relevant content. This approach allows advertisers to deliver marketing messages to consumers when they are in a specific situation or frame of mind; as consumer behaviour becomes more fragmented and unpredictable, taking the guesswork out of advertising can only be a win.

Contextual targeting is not just an answer to the demise of the cookie: it is also an antidote to many of the issues around brand risk and safety, and is a way to be less dependent on the personal data that is so heavily regulated by GDPR and CCPA.

Is this digital advertising’s moment?

While the collapse of the digital advertising house of cards may seem catastrophic to brands who have relied on precise targeting in their advertising strategies, in reality it opens as many doors as it closes. Indeed, with consumers now spending more time in apps than in longtail websites, making programmatic audience-targeting even more challenging, many marketers will already be exploring ways to bypass programmatic altogether. The resultant high quality, content-focused advertising is pushing out and replacing click-bait strategies. Perhaps the decline in the online tracking ecosystem will herald a golden age for digital advertising because, ironically, the shift away from targeting individuals will lead to a better user experience.

Image: Shutterstock

The streaming revolution: should marketers be worried about ad-free streaming?

December 4, 2019 17:26 Comments Off

The New York Times recently observed that Hollywood experiences a seismic shift every three decades or so. In the 1920s it was the shift from silent films to ones with sound, while in the 1950s it was the rise of broadcast television and the 1980s saw the cable boom.

As we draw to the end of the 2010s, a new seismic shift is rapidly increasing its pace. The streaming revolution is upon us, and the big three of the entertainment industry – Disney, Warner Media and NBC Universal – have either recently launched their streaming services, or will do soon. On the whole this is great news for consumers, particularly wealthier ones, who have a huge amount of high-quality content and their fingertips, although it comes at a cost, of course. It is, however, less welcome for the traditional broadcasters and cable channels, who are seeing their viewer numbers decrease at an alarming rate. In the US there was a 5.4% decrease in cable subscribers in Q2 of this year.

TV has for at least 70 years been at the heart of the advertising strategies of advertisers big and small around the world: where does this latest shift leave them? And should they be worried?

Better content, more choice, no ads

The modern consumer has more choice and control than at any other time in history, and they are more connected than ever: 50% of the US and UK populations have a connected TV, and that figure is expected to continue growing. These consumers are increasingly choosing to consume video content from the new streaming services over the more traditional broadcast channels. Why? There are two key reasons: the quality of the content available, and the fact that the majority of them are ad-free, so they can watch their favourite shows without interruption. A huge 60% of adults in the US were subscribed to a streaming service in 2019, while in 2018 Netflix use alone surpassed cable and satellite TV for the first time. With the glut of new streaming services – mostly ad-free – launching at the end of this year and the beginning of next, those figures will only increase.

If it affects consumers, it affects advertisers

As consumers leave traditional TV in their droves, advertisers are having to work out rapidly what it all means for them. Of course, if consumers are flocking to ad-free services, that makes reaching them much more difficult. This is particularly the case for wealthier consumers – a key target audience thanks to their buying power – who are more able to pay to rid their viewing experience of ads. The high-quality ad spots that do continue to reach large numbers of consumers – think live sport and of-the-moment experiences such as the Oscars – will increase in cost dramatically. Indeed, many TV media owners will be rethinking their inventory strategy and may well have fewer, higher impact ad spots for which advertisers pay a premium. This is also more likely to be acceptable for viewers as it will likely mean shorter ad spots with higher quality advertising.

Advertisers must to an extent accept some of the responsibility for the migration to the ad-free services. Consumers are fleeing ads because they are all too often repetitive, irrelevant and uninteresting. If advertisers can transform their strategies and the quality of their advertising and targeting, consumers will be far more forgiving of an interruption of the programme they are watching.

Technology will help: many traditional TV broadcasters are embracing technology in order to allow them to shift to programmatic, highly targeted buying, for example Sky’s AdSmart addressable offering which has rolled out across multiple markets over recent months. This will help increase relevance but, as we explore in this article, it’s not necessarily the answer for brands seeking mass reach – TV’s traditional USP.

It all comes down to targeting

Amid all the talk about the streaming revolution, there are many saying that it’s not over for TV. There are undoubtedly still many people watching scheduled TV; particularly for non-US audiences, local broadcasters have expertise in creating culturally and contextually relevant content that the mainly American streaming services aren’t yet doing. There is also the paradox of choice – with endless options available to them on the streaming services, there is evidence that many feel overwhelmed and gravitate back to traditional TV when they don’t know what to watch. And of course live events such as sporting fixtures will always attract viewers – although whether they remain on traditional broadcast TV remains to be seen.

However, whether people are still watching scheduled TV or not misses the point. Effective advertising is all about targeting, and if a large proportion of your target audience is absent from a channel, targeting becomes far more complex. This is especially true as the future of the cookie looks increasingly uncertain: indeed, Google may follow the lead of other browsers and further restrict the use of third-party cookies on Chrome.

The answer for marketers is, of course, to rethink, to innovate. Where do the new opportunities lie? Are there other channels and strategies that will deliver on your objectives, or will you need to increase your TV budget to secure those high-impact, high-quality spots? Creating, implementing and learning from a great media strategy will become ever more crucial as marketers strive to understand what works, and why.