The Cookie Is Crumbling And COVID-19 Is Still Here, But Digital Advertising Will Be OK

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The Sell Sider” is a column written by the sell side of the digital media community.

Today's column is written by Rob Rasko, founder and CEO at The 614 Group.

It’s hard not to look at 2020 as annus horribilis, if I may quote the Queen. We all entered the new year very much aware that our jobs would be more complex now that the California Consumer Privacy Act (CCPA) required us to find a targeting alternative to third-party cookies.

On its own that’s a tough enough challenge, but not one that would take over just about every aspect of our lives in the way, say, a novel coronavirus could. But then to add insult to injury, COVID-19 practically brought our industry to a screeching halt.

But in the end, I think things will be OK. I don’t mean to belittle the very real suffering folks are feeling from the virus. That’s real. But from a digital advertising perspective, based on the signals I am starting to see, things will be OK.

Innovation to the rescue

About 10 years ago our industry loved to hold up the Lumascape, that mess of logos crammed into a slide, as proof of the fast pace of innovation. In 2011, there were only 150 unique companies on the Lumascape, by 2018 there were more than 7,000.

Here’s my point: This industry has always been defined by innovation. It stems from every corner of our sector. If an individual company can’t solve a problem, many will come together to solve it collectively, as we’ve seen with organizations such as the Trustworthy Accountability Group and the Interactive Advertising Bureau. So take heart, there are countless brains working to solve our most pressing problems.

Three reasons why we’ll survive the death of cookie targeting

There are three reasons why we will survive the death of the cookie, and they’re all driven by current innovations, along with a new level of awareness among consumers that will ultimately propel advertising forward in positive ways.

First, there is a flurry of activity within companies developing multiple solutions to solve cookieless targeting. Take, for instance, all of the AI that is now applied to contextual targeting. Advances in natural language processing mean machines can assess the meaning behind content, sparing advertisers the embarrassment of their ads appearing near inappropriate context.

More importantly, let’s look at identity resolution itself which, in its simplest form, merely means matching a cookie to something else. Cookies still exist, and sites still use them, it’s just that you can’t use those cookies in browsers the same way by themselves anymore; you need to match it to something that you can legitimately use.

There are plenty of companies – Google, Facebook, Snap, Amazon, WarnerMedia, the walled gardens in other words – that have tens of millions of logged-in users, and in some cases they’ll let you match your data to theirs, as long as you follow their rules for data usage.

Between the two – context and identity – advertisers will be able to achieve scale for their campaigns. The question is, what will that piece of identity be? Email, mobile phone number? Something else?

“It’s really important for users to buy into whatever we decide on,” Stephanie Layser, vice president of advertising technology and operations at NewsCorp, recently pointed out during an event.

That may not be a fanciful dream considering how much the user is paying attention to these issues these days, which brings me to my next point.

To give consumers more control over their data, we are seeing an uptick in privacy-by-design initiatives, such as the 7 Foundational Principles laid out by IAPP. I’m not necessarily endorsing this approach; my goal is to simply point out the increasing level of sophistication that’s now applied to privacy by design and what it means to the industry. The more control we can offer consumers, the less likely they are to complain to regulators.

And that ties to my third point, which is that consumers have a much greater understanding (at least familiarity) of their data, rights and how they can protect it. Many have heard of GDPR and CCPA, and they’re gaining a sense that there is an emerging body of regulation that protects their data. This is a positive step. Once consumers understand that they’re in the driver’s seat for consent, they may start to share their data for brand interactions more freely. Trust, however, is an essential ingredient. That trust will be helped, in my opinion, by the California Privacy Rights Act (CPRA), which will be on November’s ballot.

For publishers specifically, I think this also means new opportunities to cultivate stronger relationships with their readers, and under the law, create targetable audiences that align to their brand’s affinity groups. Over the past few years, DMP technology has positioned this idea, but the glut of third-party data made first-party audiences seem on par or more expensive to acquire. With these new rules and regulations, I would expect smart publishers to have an opportunity to leverage their communities in a way they haven't in a long time.

There are some important aspects to the CPRA that will absolutely help to instill consumer confidence. First, it creates a new state agency that can investigate privacy complaints and impose penalties. It also makes distinctions between data. CCPA treats all data as if it were the same, but most consumers see a distinction between, say, their Social Security number or COVID-19 test results and their advertising-focused cookie data.

All this to say there are elements of innovation appearing that signal businesses will begin to go back to normal, even as the virus rages on. It’s as if people since the July Fourth holiday break decided that they need to just hunker down and do business. I’m seeing more people who are eager to transact in the second half of the year, mainly because they or their clients need to go back to the task of building brands and selling stuff.

Follow Rob Rasko (@614GroupRob), The 614 Group (@614group) and AdExchanger (@adexchanger) on Twitter.

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