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Deep Dive

Google's 2022 cookie apocalypse: Why it will hit first party data, hyper-targeting and a solution from Westpac's former digital media and tech boss

By Paul McIntyre - Executive Editor

10 May 2020 7min read

L-R: SynergyStack's Chris Brinkworth; Anna Samkova, Group GM, Digital at 250-store retailer The PAS Group; Venntifact co-founder Joey Nguyen; Nick Barnett

By Paul McIntyre - Executive Editor

10 May 2020 7min read

From 2022, Google's ban on the use of third party cookies will render up to 85% of current digital marketing useless, says Westpac's former digital and media technology director Nick Barnett. That's when Google Chrome joins Apple and others in voiding the digital marketing industry's most widespread currency. It's going to break things as new pressure builds on first party data, retargeting, behavioural targeting, hypertargeting...and usher the return of research panels and contextual content environments. This podcast covers everything you need to know, now.     

Listen to the epic "Google 2022" podcast here: 

You need to know this:

  • From 2022, third party cookies will no longer be allowed in Google's Chrome browser
  • Tracking cookies are already blocked in Apple's Safari and Mozilla's Firefox
  • That takes out about 85 per cent of the cookie-based ecosystem: Anything seen as third party - measurement, analytics, retargeting, site optimisation and a lot more is gone
  • Google and Apple are also clamping down on fingerprinting and other means of bypassing anti-tracking measures, which also impacts first party cookies
  • Experts believe the changes drive a major shift away from collecting cookies to collecting actual authenticated identification
  • Brands, publishers and the supply chain need to incentivise user sign-ins
  • Many will need to shift the entire way they operate 
  • Hyper-targeting looks dead in the water

“If you are the best at understanding how behavioural targeting works, that’s not going to be very useful come 2022. Any teams at publisher, advertiser or agency, their objectives and their cross disciplines will be hugely impacted by all of this.”

- Chris Brinkworth, founder, SynergyStack

Not now Cookie Apocalypse

The world has some pretty significant challenges on its plate right now. Dealing with something 18 months away might not seem so urgent.

But in 2022, Google will ban third party cookies from its Chrome browser, used by most people on the planet.

That will render up to 85 per cent marketing and digital investment useless, and do away with much of the media-advertising-martech ecosystem in one fell swoop.

If brands, agencies, publishers and the tech supply chain want to survive the impending Cookie Apocalypse, they need a plan. Fast.

 

Marketers: Copy this letter

Nick Barnett, Westpac’s former director of digital & media technology turned independent advisor, suggests marketers copy and paste the following and send it to their CMO or head of department:

‘As you are aware, we spend approximately $x million on digital marketing per year.  We have evidence to suggest up to 85% of this will be rendered useless as of 2022 due to industry changes. This will result in us losing customers to better prepared competitors due to our marketing being inefficient and customer experiences breaking.

The good news is I have some potential solutions we can explore. Please can I have your endorsement.’

With marketing budgets most likely under extreme pressure post Covid-19, Barnett suggests digital marketers seek funding to explore those solutions from corporate governance and privacy budgets - given Google’s cookie cull is largely a bid to comply with tightening privacy regulation.

 

THE PULSE

Quick question: Agree with the magnitude of the Chrome 2022 cookie shake-down?

Choices
Everyone: prepare for change

In the meantime, Barnett and fellow podcast panelists strongly advise readers to get up to speed with Chrome 2022 and the incoming changes that will soon profoundly influence strategy, technology and investment.

The death of cookies will also have a human impact. Digital marketers and technologists involved with targeting should take particular note, if they want to remain employed.

 “If you are the best at understanding how behavioural targeting works, that’s not going to be very useful come 2022,” suggests, former eMitch exec and SynergyStack founder Chris Brinkworth.

“Any teams at publisher, advertiser or agency, their objectives and their cross disciplines will be hugely impacted by all of this.”

“Anything coming in from Facebook, anything from my retargeting company, anything from my analytics company is seen as third party. Any technology that you have invested in for your marketing stack can also be severely impacted.”

- Chris Brinkworth

How the cookie crumbled

In late 2017, Apple’s Safari browser rolled out intelligent tracking prevention, known as ITP.  It aimed to crack down on tracking by only allowing cookies for sites that people regularly use – keeping those cookies for 24 hours - while corralling and deleting third party and tracking cookies.

In mid 2018, Safari rolled out a new version, ITP 2, which cut the 24 hour window for cookies and instead made websites request tracking privileges – to which users must explicitly consent. That opt-in retains the cookie unless the user fails to visit the site for 30 days.

Since then, there have been numerous tweaks and changes, as Apple attempts to stop advertisers and tech providers bypassing ITP restrictions, though that hasn’t stopped people trying. 

Safari’s original changes caused some ripples in the ad industry. But across all browser types - desktop, mobile and tablet - Safari has at most a 20 per cent share. Chrome has upwards of 60 per cent. Now the ripples are becoming waves that will sink some parts of the supply chain, because blocking third party cookies means a lot of ad tech – and the broader marketing stack - will no longer work.

“Anything coming in from Facebook, anything from my retargeting company, anything from my analytics company is seen as third party,” says Brinkworth.

“Any technology that you have invested in for your marketing stack can also be severely impacted. For example, if you are an advertiser, a DMP may not actually be what you need any more. Because DMPs are heavily reliant on third party cookies,” he suggests.

“This impacts so many elements of the supply chain. Analytics, chatbots, surveys will be impacted. Any way to optimise your website to get better conversion rates will be impacted. So this is a multibillion dollar issue globally and the key for everybody is to find a solution.”

Problem is, nobody has.

“People who have hung their hat on hyper-targeting are going to have to change their business models.”

- Nick Barnett, consultant

Prepare to pivot

“People who have hung their hat on hyper-targeting are going to have to change their business models,” suggests Nick Barnett.

He thinks that’s a good thing. Balance will return to marketing and shonky tactics such as ‘cookie bombing’, also known as attribution scamming, where buyers flood the target market with impressions, tag and track users and claim the credit for those that would have converted anyway – will be killed off.

“Those kind of practises won’t wash anymore. So it will hold us to a higher standard as marketers.”

Barnett thinks as “hyper-targeting goes out of the window”, brands will return to a “better balanced view about marketing activities that’s more about the quality of the brand interactions”.

Post Royal Commission, banks are already moving in that direction, says Barnett, resetting their communications to genuinely serve customer needs.

“So moving from ‘how do we flog more credit cards,’ to ‘how do we have a conversation over time for a first home buyer, to educate them as they go and become their trusted source of information?’” explains Barnett.

“For me, that is a movement towards more contextual, content-based marketing.”

Or in other words, “doing what we are supposed to do, and not getting caught up in these ‘silver bullet’ marketing technologies, where I would argue there is not concrete evidence that it actually delivers what it says it delivers.”

A post cookie world, suggests Barnett, “gets back to building a brand, trust and reputation – and moving customers through a well thought out, intelligent process.”

But he stresses it is not the death of data-driven marketing, just the death of lazy tactics reliant on a murky ecosystem.

“You can still leverage a lot of the tech and the smarts – you can still use your first party data,” says Barnett. “It is just the way you are executing marketing campaigns and what you are focusing on is going to be drastically different.”

“There has been a lot of investment into activation of first party data, big investments into data management platforms (DMPs), people wiring up their CRM systems, allowing retargeting of their own users from an advertising perspective. That is something that is directly impacted here.”

- Joey Nguyen, co-founder, Venntifact

 
What now for brands and their marketing stack?

Companies have not yet fully grasped how their operations will be affected by Chrome 2022, says Joey Nguyen, co-founder at martech advisory Venntifact.

“There is an entire cookie economy that has been built up and it affects things that people may not think it does,” says Nguyen.

“There has been a lot of investment into activation of first party data, big investments into data management platforms (DMPs), people wiring up their CRM systems, allowing retargeting of their own users from an advertising perspective. That is something that is directly impacted here.”

But it doesn’t stop there.

“Things like segmentation and personalisation of their own brand websites, such as where a portfolio of brands might go across specific domains, all of that will be directly affected by the Safari and Chrome 2022 changes – and will be essentially dead in the water.”

Meanwhile, first party cookies are also having restrictions and time limits placed on them by the browser companies – to head off the workarounds and forms of fingerprinting that advertising platforms and others are using to bypass cookie controls.

“Apple and Google have clamped down on these things and put a seven day window in place for the lifespan of first party cookies that are set by some of these technologies,” says Nguyen.

That means it will be very difficult to track customer journeys between visits, without authentication. “So unless a user has explicitly authenticated with for example Westpac, logged in and told Westpac who they are, Westpac won’t be able to tack that user between visits,” explains Nguyen.

Seven days is not a long time for any brand that has a multi-touch, multi visit journey. “Essentially, that’s every brand in the entire world,” says Nguyen.

That means brands and publishers need to ensure they get authentication and as many customers logging-in as possible, and visiting their sites as regularly as possible.  

 

Incentivise identification

To a hammer, everything looks like a nut.

“It was very easy before to say there is one answer, cookies for everything,” says Nguyen. “Now it is about assembling a set of tailored solutions across technology and strategy to address the new world. Accept that some things can’t be replaced and even in some ways, shift the business.”

For businesses moving away from DMPs and into customer data platforms (CDPs), a core part of the strategy is to incentivise identity “and move to an identity-focused world instead of a cookie focused world,” says Nguyen.

“The question then is how can you incentivise identification? How can you make a user log in and tell you exactly who they are? That may be quite difficult for some brands that need to shift the way they operate, and the entire way their digital presence is set up.

“It is a challenging set of problems and there is not a one size fits all solution.”

“More is not always better. The tailored approach is so important – and I think CMOs will be under increasing pressure to create this personalised and engaged human experience.”

- Anna Samkova, Group GM Digital, The PAS Group

Loyalty: Reap rewards

Loyalty or “engagement” schemes will pay dividends in the post cookie world, thinks Anna Samkova, Group GM Digital at ASX-listed apparel specialist The PAS Group. PAS operates some 250 stores in Australia and has APAC rights to brands like Londsale, Everlast, Russel Athletic, Dunlop and Slazenger.

Samkova pitched in a customer data platform (CDP) to management about three years ago, “when not many people could pronounce it or knew what it meant,” she says. “So you can imagine selling that dream to the board, it took me a few goes.”

At a simplistic level, a customer data platform is software that puts all customer data in one place and is accessible by other systems. Numerous vendors and third parties tout all sorts of additional functionality to do clever things with the data.

While a CDP will need to be “properly set up to bypass as much of the economy as possible” after 2022, according to Vennifact’s Nguyen, Samkova believes the ability to better understand and act upon customer data enables the kind of personalised, tailored approach that has too often been lacking - and keeps customers coming back to brand properties.

She cites a recent loyalty programme with one of PAS Group’s brands.

“Post CDP launch, we decided to analyse our top spenders within one of the brands, who they are and how much they spend with the brand in a year,” she explains.

Those top-spending customers averaged $5k per annum, so PAS Group decided to create a top tier within the existing loyalty programme and “quietly launch it, notifying customers via email or phone call,” says Samkova.

“But the ‘quiet’ part didn’t work so well,” she concedes. Within two weeks, the brand was “slammed” on social media with customers complaining that they had not been invited.

“The sense of FOMO was very real,” says Samkova. Last year, sales from that top tier, about 600 customers in total, contributed about $4.6m, or around $7.6k per customer.

“That highlights that more is not always better. The tailored approach is so important – and I think CMOs will be under increasing pressure to create this personalised and engaged human experience with customers and be empowered to create more tailored journeys.”

 

Start prepping now

Nick Barnett agrees loyalty programmes could be a big part of the solution for those that get them right.

“Airlines are going through a very tough time right now, but they are very good at using rewards and at incentivising customers to permit them to use data in that way.

“So learn from those companies,” he says, “but every brand should be considering their own strategy. For the next few years, you need to assess your own roadmap.”

In the mid-term, the digital giants, Google, Facebook, and Amazon are likely to be the winners of browser changes (Facebook will be badly affected in one sense but will draw marketers shorn of capability deeper into its own vast, data-rich ecosystem).

“Those partnerships with the majors are only going to get stronger,” suggests Barnett. “So marketers need to lean in and leverage those partnerships. Make sure you have proper integrations into their platforms, because they are not going anywhere.”

But also, he suggests marketers build relationships “with anyone else with really strong first party data, more identifiers than cookies; email addresses, apps.” As well as incentivising customers to sign up and give permissions,  “they should be looking to those partners and considering mutual value.”

Chris Brinkworth thinks vertical ad networks “will 100 per cent see a resurgence”, so he cautions against “going all in” with Facebook and Google. “If you don’t have the budget to test them, you won’t know how successful they are.”

In the meantime, he urges brands – and anyone else whose strategy is underpinned by cookies – to have a ‘fire plan’ ahead of 2022. “That is, don’t panic, but you have to have a plan.”

“This is only the beginning. It is not the mechanism, but the fundamental philosophy of anonymous user tracking that Apple and Google are taking issue with.”

Joey Nguyen agrees, and says education is the first step. “Get educated, understand what is broken now, and what could break in the future. Subscribe to resources such as cookiestatus.com which are collating the updates around this.”

The second step is to accept that the world is changing.

“This is only the beginning. It is not the mechanism, but the fundamental philosophy of anonymous user tracking that Apple and Google are taking issue with,” says Nguyen.

“So how can you align philosophically for safety; how can you have consent and preference management at the core of your strategy?

“Get ahead of this with a roadmap of what that strategy looks like – and then let that shape you technology investments.”

In the meantime, marketers could do worse than copy and paste Nick Barnett’s letter.

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By Paul McIntyre - Executive Editor

10 May 2020 7min read

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