“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is written by Pete Spande, chief revenue officer and publisher at Insider Inc.
The “death of cookies” may be second only to “year of mobile” as ad industry prediction fails. Both forecasts felt tired after too many false starts.
The third-party cookie may not be dead just yet, but the increasingly scrutinized piece of code – one which for decades fueled audience buying across the digital landscape – is arguably now on life support.
New privacy regulations, more tools to block or limit cookies within browsers and significant changes to how browsers operate mean that some version of the dreaded “cookiepocolypse” may finally be here.
Yet the industry seems almost blasé about what’s happening.
Reaction tends to fall into three camps:
- We’ve seen this on the horizon for years.
- We surely won’t let this happen.
- Wait, what is happening? (This view is held by most with whom I’ve spoken.)
So how, then, should we prepare for the disruption outlined above?
Here’s some unsolicited advice to the key players most impacted by the changes ahead.
To publishers: Actively own your data
For many if not most publishers, third-party data has determined the value of your programmatic inventory. (To gauge your inventory’s future value under the emerging new paradigm, simply measure the yield of your audience using Safari, where third-party cookies have never played a big role.)
The good news is that the demise of cookies means the relationship you have with your audience via subscriptions and the behavioral data you’ve collected become much more valuable, though your ability to properly segment your audience and better understand its behavior is now paramount. Adapting requires strong expertise in an area many have neglected – whether you call it intent marketing, behavioral marketing or some other buzzword of choice.
To marketers: Source alternative data providers
If you were renting third-party data, you will likely need to build partnerships or some other means of working around the reduced efficacy of the third-party cookie. If you have strong customer (first-party) data, you will need to find partnerships that enable that data to work on third-party sites.
Whether you were renting or owning that data, the relatively inexpensive audience buying you relied on will become more challenging and, just as importantly, less precise than it already is. At the very least, your retargeting, frequency capping and attribution tracking is likely to become weaker, if it doesn’t disappear altogether.
To ad tech providers: Form better partnerships
Our ecosystem cannot support the volume of proprietary solutions currently under construction. Building or participating in collectives where meaningful audience segmentation is possible will require the careful navigation of many build, buy or partner options.
The temptation to create the user ID or data integration platform to rule them all is great. Balancing this temptation against pursuing more integration with existing market leaders may mean the difference between success and failure.
To platform managers: Learn to play nicely (really)
As more and more news headlines signal increased regulations – and possibly antitrust actions – you must balance the lure of “owning it all” with the need to help the entire industry work better, collectively. It’s time to change your lens from win/lose to win/win.
But stepping back a bit, I believe it’s the entire industry that must widen its lens to see the bigger picture and realize that pulling third-party data segments together to isolate potential target audiences on the open web will become increasingly challenging – and expensive.
One important solution with industrywide support is IAB’s DigiTrust identity collaboration. Vendor neutral, this ID solution aims to dramatically reduce the number of third-party requests that take place on web pages, creating more value for every part of the ecosystem that adopts the solution.
So, given all of this, where are things headed? In the future, might the cookie remain viable?
Sure, this is a possibility. But we can’t ignore the tea leaves that suggest the need for a strong Plan B. How businesses plan and respond will test every part of the ecosystem.
Perhaps ending with this quote by Louis Pasteur would be most appropriate: “Fortune comes to the prepared mind.”
Follow Pete Spande (@PeteSpande), Business Insider (@businessinsider) and AdExchanger (@adexchanger) on Twitter.
