Interviews, insight & analysis on digital media & marketing

The reality of the post cookie world doesn’t have to be that bad

 By Murdo Ross, Solutions consultancy Director at Parkhouse

The age of unfettered use of third-party cookies is almost at an end. While Google has recently provided a stay of execution to the online advertising technology, it hasn’t wavered on the commitment to discontinue the technology.

This is unwelcome news for publishers and the marketers that rely on their publications for display advertising. Third-party cookies have long been a staple of online marketing, and without a replacement, there is concern that ad spend and click-through rates could plummet.

In fact, the UK’s Competition and Markets Authority found that “UK publishers earned around 70% less revenue overall when they were unable to use third-party cookies to sell personalised advertising”.

However, the reality doesn’t have to be so dire – Google has provided publications with precious time to consider alternatives and create a plan for a future without external cookies.

FLoC isn’t a perfect solution

Google’s idea for a post-cookie world is to use aggregated, anonymised groups for targeting instead of individuals. The system, called Federated Learning of Cohorts or FLoC, works by “clustering large groups of people with similar interests” and using on-device processing for anonymisation.

If there’s a more privacy-conscious drop-in replacement for third-party cookies, then what’s all the fuss about? For a start, FLoC has faced significant pushback from major stakeholders. WordPress – which has approximately 60 per cent of the content management market – has announced that it is considering blocking FLoC by default. GitHub has said that it will not support FLoC, nor will browsers like Firefox or Brave, and multiple FLoC blocking plugins for Chrome are already available for free. In addition, there are GDPR issues to be resolved.

FLoC may never see the light of day and while Google isn’t going to roll over and give up on tracking, publishers can’t wait for them to get it right.

Monetising first-party data

While third-party cookies may not be long for this world, first-party cookies aren’t going anywhere. Publications can collect data on users and offer advertisers targeted opportunities.

Publications need to use a customer data platform (CDP) to create ‘views’ of their readers they can then monetise. The CDP ingests, processes and matches data on readers and acts as a central hub for processing. The CDP produces a single customer view (SCV), a single source of truth on each reader that can then be used for advertising (amongst other marketing activities).

While this isn’t something the publishing sector has had to get to grips with previously (because it could rely on Google to do the heavy lifting) it’s now in the same situation as thousands of companies around the world who are interested in targeted, personalised marketing, and are keen to create detailed profiles of their customers that enable effective targeting.

The question will be whether the publishing sector can avoid some of the most common mistakes companies make when pursuing those consolidated views of each reader. According to Experian, the most significant obstacle is eliminating poor quality data from the system, which 43 per cent of respondents struggled with. As data scientists well know, “garbage in equals garbage out” – there’s no amount of processing that can derive value from messy, inaccurate data.

Another frequent obstacle was that data was siloed across different departments (39 per cent). This is a reminder that creating a successful SCV is about more than simply investing in technology. Tech can only be effective if the organisation has an effective strategy for handling data – it’s a means to an end, not an end in itself.

Publishers looking to secure an advertising-based future need to take this opportunity to rethink the way their entire organisation manages data. Those that can create a strategy for capturing and managing high-quality data and implement technology to make use of it will have the advantage in the near future.

Data as a transaction

The final part of the puzzle is consent. Publishers that haven’t already done so should adopt a consent management platform (CMP). For one, it alleviates worries about legal compliance, but it also makes it easier to gather and manage data.

Giving readers transparency and control and making it clear what their data is used for, establishes trust, and eliminates hesitancy about sharing. If readers understand how their data is used – and that sharing their data helps support a publication that they value – they are more likely to consent. Publications can frame data sharing in opposition to the common alternative, paid subscriptions.

Ultimately a blend of subscription and advertising models will probably be required for publishers to survive and thrive, but this recent stay of execution should catalyse any that haven’t invested so far, to investigate its first-party data potential


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