Fuse Insights   •   March 16, 2021

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Last week, Google announced our third-party user-tracking cookies are crumbling. That’s a big loss for digital advertising and has put targeted ads on the ropes.

Like Apple, Google has stepped things up in the name of user privacy. It will no longer sell web ads that target individual users’ browsing habits, and Chrome will no longer support cookies that collect data.

But just because Google is through with cookies doesn’t mean it’s through tracking you. Google will still track users on mobile devices, and it will still serve targeted ads based on user behavior, at least on its own platforms. That means Google itself won’t be dramatically affected by the move.

To understand third-party cookies, look at a day in your life online. As soon as you open your computer or pick up your mobile device, you start browsing or searching for content, starting with that all-natural dog food you heard about, or that bracelet your friend was wearing during your Zoom meeting. Maybe you check your Facebook feed and “like” some sponsored content or look for some new running shoes for spring. That’s all part of cookie data, and it’s proven to be a win/win for consumers and advertisers alike. Individuals get served relevant ads (based on their interests), and advertisers are more prone to convert customers who may be predisposed to their product or service.

But do people really like the idea of being tracked? Not really. And regulators are passing more stringent privacy laws because of it.

As we all know, advertising is what keeps the web open. But privacy practices need to keep up with our changing expectations. People want their identity and information kept safe and confidential on the browsers they use. And advertisers still need a way to find their audience based on web behavior.

So, what’s the right answer? Is there any substitute for third-party data that satisfies both the consumer and the marketer?

Let’s start with first-party data. Over the last few years, larger brands like P&G and Starbucks have worked diligently to taper their dependence on ad tech by building out strong direct-to-consumer relationships. P&G has a database of more than a billion people, while Starbucks is going big into personalization through first-party data collected on its own channels.

An effective loyalty program or app is more important today than ever, because it gives you direct insight into your customers’ behaviors and mindsets. Loyalty programs help you develop a personal relationship with customers, reward them for their behavior, and recommend new products or services that will keep them coming back for more. Smaller brands in particular need to place value on every consumer connection, where the first priority should be getting an email address and consent. The bottom line? First-party data is becoming more and more valuable, so get as much of it as you can.

Meanwhile, if you’re not a mega-brand with several billion people in your database, there are some new alternatives to third-party cookies.

The Trade Desk recently announced their industry-wide initiative to develop and deploy Unified ID 2.0, an open-source, interoperable identity solution that Nielsen (the gold standard in media data and measurement) has come on board to support.

Unlike cookies, Unified ID 2.0 operates across multiple advertising channels. Marketers will now be able to understand ad campaign performance across streaming TV, browsers, mobile, audio, TV apps, and devices with a single ID. This new approach uses secured technology to encrypt and hash a consumer’s email address or phone number (any authenticated login) for their protection.

Jeff Green, CEO of The Trade Desk, said it like this: “As consumers embrace connected devices and TV becomes fully digitized, advertisers are looking for a new approach to identity that helps them measure across platforms in a way that puts the consumer in control. With industry-wide collaboration, Unified ID 2.0 accomplishes these objectives while preserving the value exchange of relevant advertising.”

Some of the key elements of Unified ID 2.0 include:

• A simplified consent framework for publishers
• Encrypted identification
• Simple and transparent consumer controls
• Single sign-on capabilities across the open Internet (so consumers don’t have to consent repeatedly)

At its core, Unified ID 2.0 is an upgrade to cookies, because it will operate across several different advertising channels with a single ID. This creates a stronger, simplified environment for media precision and measurement.

Lotame has also created a new cookieless identity solution called Panorama ID. It relies on deterministic audience data, including customer IDs, emails and publicly available web information. Lotame says the ID features an average of 119 web and 89 mobile attributes per pseudonymous individual, delivering the highest accuracy, profile depth and scale across the open web.

And then there’s Google, where this whole cookie-free diet began. In this empty-glass-of-milk, cookieless future, Google wants ad targeting, measurement and fraud protection to adhere to standards set by its Privacy Sandbox. But isn’t a sandbox a place where everyone is invited to play?

According to Digiday, Google’s Privacy Sandbox initiative is still in its infancy, so while Google has proposed many features, no actual platform or code exists for marketers to properly assess. The idea is that it will replace third-party cookies with five application programming interfaces. Advertisers will use each API to receive aggregated data about issues like conversion (how well their ads performed) and attribution (which entity is credited for a purchase). Google’s Privacy Sandbox represents an alternative pathway for the ad industry to take, relying on anonymized signals (not cookies) within a person’s Chrome browser to profit from that user’s browsing habits.

All in all, cookies are not as creepy as they sound. But the industry has done a poor job of explaining the value proposition to consumers — relevant ads in exchange for free content. That’s why user privacy has reached such critical mass. But give the industry a problem and it will find some creative solutions. And I think we will all be happier with open standards that help support a better Internet for advertisers, publishers and consumers.

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