Why Cohorts Have Always Been Advertising’s Future – Long Before Google’s FLoC

Kristina Prokop

This article is sponsored by Eyeota.

There’s little doubt that “cohorts” will be topping the list of 2021 marketing buzzwords, and that’s largely because of the ongoing developments around Google’s plans to phase out third-party cookies on Chrome next year. As Google has rolled out new details for its interest-based advertising opportunities, all eyes have been on the Privacy Sandbox’s “federated learning of cohorts (FLoC)” as the go-forward reality for targeting on Google’s properties.

Here’s the thing: There’s nothing new about cohorts as it relates to future-proofing your marketing strategy. In fact, the very concept embodied by FLoC – the clustering of large groups of people with similar characteristics in a way that protects individuals’ privacy by default – has been a marketing principle for years. Furthermore, cohorts represent the logical go-to strategy for marketers as we transition to a privacy-first world. Let’s take a look at some of the reasons why.

Privacy-First in a Global Context

Enterprises have been pivoting to cohorts and probabilistic data for years, particularly as it relates to operating at a global level. To date, the push for consumer privacy in online environments has been felt more powerfully outside of the U.S., as evidenced by sweeping legislation like GDPR in the EU. Companies operating internationally have leveraged a variety of tools to light up their data in meaningful ways, without crossing the line regarding privacy restrictions and personally identifiable information (PII).

As the privacy tide shifts in the United States as well, global data practices are becoming more relevant than ever. These include strategic use of cohort methodologies, in conjunction with probabilistic onboarding techniques. In the United States, marketers have been putting deterministic data on a pedestal for years, often at the expense of smart probabilistic strategies. But as the privacy landscape shifts, deterministic data linkages are going to face new challenges – even beyond those being leveled by the likes of Google and Apple.

Deterministic data is and will continue to represent a perfectly valid strategy for marketers, but it faces a growing list of limitations. As such, advertisers need to think of their data strategies in a “yes, and” manner, rather than an “either, or.” The organizations that have already realized the value of cohort methodologies and probabilistic onboarding – on top of any deterministic data strategies – are going to be at a competitive advantage as cookies and other legacy identifiers fade to irrelevance.

Cohorts, Probabilistic Data and the Path Forward

Okay, so what are we talking about when we talk about future-proofing with cohorts and probabilistic data? These are well-established concepts within many of the world’s largest enterprises at this point, but they haven’t received much mainstage attention – until now.

Probabilistic onboarding works within the context of a brand’s existing deterministic strategy, enabling marketers to maximize the scale of their available data. Probabilistic onboarding is all about building cohorts as a means of future-proofing your brand. It’s about finding new customers – a business imperative that mustn’t be overshadowed on the quest for personalization.

This concept is at the heart of Google’s FLoC, but it’s not novel. Building cohorts of likely customers, based on their similarities, is how the world’s most successful companies have been expanding their markets for years. This process doesn’t have to exist inside Google’s black box. It’s broadly applicable across a number of data resources, partners and platforms.

As shifts in the privacy landscape rapidly degrade the utility of deterministic assets, brands and agencies mustn’t neglect the power of strong probabilistic data sets that can enable highly effective one-to-many marketing campaigns and help companies expand their customer bases. Google might have brought the concept of cohorts into the limelight. But advertisers should be the ones to own it.

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