The last (third party) cookie: How to prepare for a new era of digital advertising

The last (third party) cookie: How to prepare for a new era of digital advertising
Bernard Yu is SVP corporate strategy at ADARA.

In a 1984 episode of Sesame Street, Prairie Dawn, the most-level headed Muppet, is faced with a difficult challenge: she must explain the concept of ‘the last cookie’ to the Cookie Monster. The presentation begins well. Prairie asks the Cookie Monster to eat three of the four cookies on the table, and he does so with typical enthusiasm. But the mood changes when Cookie Monster is faced with the last cookie.

“But Prairie! Prairie! That’s the last cookie! After we eat that cookie…there are no more cookies…forever!” is the anguished cry of the fluffy biscuit enthusiast.

Brands and digital marketers can relate to the painful realisation the Cookie Monster experiences in this clip. For the last 25 years, third-party cookies have empowered marketers to measure engagement, provide attribution and deliver personalisation to consumers in their marketing communications. It may not always have been 100% perfect, but it provided a consistent methodology that everyone could use. However, this is all now set to change.

Growing concerns over the impact of third-party cookies on user privacy have led to increased crackdowns on their use. Apple launched its Intelligent Tracking Prevention (ITP) in 2017, Firefox launched its Enhanced Tracking Protection (ETP) in September 2019 and Google announced it will phase out cookies on its Chrome browser by 2022 earlier this year.

This will have a significant impact on how marketers do their jobs, and how brands reach audiences. Take personalisation as an example: with data limited to walled gardens and basic first-party information such as purchases, name and location – how can brands deliver the deeply personalised and timely communications that consumers have come to expect? How can marketers know if they are reaching consumers with relevant offers or information?

But the death of the cookie does not have to mean the end of highly targeted marketing and advertising, and there are steps brands and marketers can take to prepare before the final cookie arrives on our plate in 2022.

Building transparency

The third party cookie’s history is filled with challenges around privacy, trust and transparency. The demise of the third party cookie presents an exciting opportunity to create a new system which enshrines transparency at its core.

Data alliances present a tangible alternative here. Based on data integrity and accuracy, data alliances like ADARA provide marketers with the ability to personalise marketing messages, whilst maintaining total transparency about how user data is gathered and used. This means that all consumer data is leveraged and sourced ethically: all partners must agree to adhere to a number of rules, ensuring that consumers know their data is shared for marketing purposes, in order to enter the alliance and to use data to build marketing campaigns.

Using data to build identities

Data on its own is not enough, of course. In our fragmented media landscape, the real value for marketers is understanding the relationships between data across touchpoints. These relationships paint a valuable picture of the consumer that marketers can use to target them effectively. Understanding that these relationships hold the key is fundamental in moving from a cookie-based marketing strategy, to an identity-driven one.

Data alliances help construct verified consumer identities for marketers. This is achieved by layering data points on a foundation of first party data – which data co-ops are able to then link back to a single person’s profile – using persistent identifiers (such as email addresses) to ensure that there are groups of real people whose profiles are clearly understood.

At ADARA we call this the identity graph, and it allows us to use both digital and offline channels to reach relevant customers. Our 1 billion-strong identity graph of customers, built from first-party data from over 270 partners, means we can produce 5,000 distinct segments.

From this, our partners are able to mix and match the data sets they need for their target customer group. For example, if we know via real estate data that an individual is purchasing a home in the next three months, a financial services brand could look to tailor its communications and offers to the costs associated with this. If traveller data shows an individual flies often and shops abroad for luxury retail, we can ascertain that that person may well be of interest to a Paris-based luxury fashion retailer.

Whether you are the Cookie Monster or a digital marketer, it is easy to feel despair at the concept of the final cookie. But this is not the end of targeted advertising – it is the beginning of a new era. By leveraging data alliances, marketers can understand customers and target them effectively while upholding the absolute highest standard in terms of data ethics and enshrining the privacy of the customer at the heart of the process.

Read more: Carolyn Corda, CMO, ADARA: On empathy as a marketer

Photo by Christina Branco on Unsplash

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