Cookie meltdown - first party data is looming as the next flashpoint for marketers and agencies
The changes coming to cookie tracking on the world's biggest web browser, Google Chrome, are just a curtain raiser to a much bigger challenge for marketers in managing their first-party data. A new era of consumer privacy and consent will effect every brand's paid and owned channels. Publicis-owned Performics CEO Jason Tonelli, News Corp's Suzie Cardwell and marketers Andy Lark and Jon Bradshaw make some eye-popping observations. Chomp on Part Two of Mi3's "Cookie Meltdown" series.
You need to know this:
- Google's restrictions to third party cookie tracking on Chrome is only the start of a broader shift to greater consumer control of their data. Marketers and the digital sector, so far, are largely missing the coming shakeout
- Not all cookies are created equal - first party cookies are in better shape than third party cookies with the latter to have a widespread impact on parts of the adtech and agency supply chain
- Marketers will ultimately face as much pressure as media companies and publishers for consumer disclosure and consent in using first party data across their own assets such as websites and apps
- Andy Lark downloaded a privacy app to test last month - it blocked around 12,000 parties "who cookied me looking to capture and probe my data. I had no idea who many of them were"
- A GDPR-like privacy regime is coming to Australia in some form - the ACCC is likely to propose new restrictions from its Digital Platforms Inquiry final report, due later this month. Precedents in the EU against marketers as 'data controllers' will emerge in the next 12 months with large fines for breaches likely. To date it has been largely confined to Google and Facebook
- Marketer and media KPIs are changing to reflect a new consumer consent regime
- Industry still underestimates what greater consumer control over their personal data and behaviour tracking means for data flows and tracking in the marketing and advertising system
- Some media companies are preparing for a world of consumer data consent and argue they're well-placed for the new regime
- Some marketers have "blank looks" around the importance and implications of cookies and obtaining consent, despite the charge many brands are making in digital transformation programs and martech investments for personalisation
"It's important for marketers to understand it's not just media channels that are going to be affected. It's going to be marketers' own sites and the content on those sites where they use their own first party cookies."
"One of the things that's been lost in this debate is that there are two types of cookies and they're not created equal," says Suzie Cardwell, who has been leading News Corp's charge into commercialising its audience, segmentation and user targeting data.
- First party cookies are a piece of code created by a site owner, or a media owner to collect information about what users are doing across their sites. Those cookies are not being blocked by Google or Apple and there's no indication that they will be.
- Third party cookies are created by an entity or a technology vendor that doesn't own the site but places a cookie on that site. It's these cookies that are being blocked by Apple and Google. Says Cardwell: "They are generally the ones created by adtech vendors, demand-side platforms and retargeters that are widely used by various parts of the marketing community."
Cardwell says the first critical point for marketers to understand is that media owners use first party cookies across their sites to collect information about what their users are doing. News Corp, she says, is collecting about 2 billion data points from 12 million people across its network each month, which in many cases includes capturing the intent of those users.
- A case in point, Cardwell says, is people who might visit escape.com.au three times in a month, reading information about beach holiday destinations. News Corp can bundle that information on users into an audience segment for a travel retailer to create a bespoke message to drive a business outcome. It's this kind of scenario that Cardwell expects News Corp needs to ensure is compliant with new consent and disclosure rules in the next 12-24 months, even though it is first party data, not a third party cookie.
Cardwell says while much of the industry discussion has focused on the potential hits to media companies, agencies and the adtech sector, marketers are facing compliance challenges in the use of their first party user data, and disclosure and consent from their owned sites and media channels.
"There's no doubt Australia is going to see some sort of GDPR legislation coming to us. We, like most publishers, are actively looking at the point in which the legislation comes in so we can say to a marketer that we have a pool of first party cookies for whom we have clear, opt-in around consent.
"It's important for marketers to understand it's not just media channels which are going to be affected by this. It's most likely going to be marketer-owned sites and the content on those sites where they use first party cookies. For marketers, it's timely for them to understand how they need to be able to manage consent for their use of first party cookies."
"A big trend in the next two years will be businesses popping up allowing people to take more control of their data and what we can see and don't see. Consumers having the chance to opt out of tracking and cookies is a good thing because they start to take control."
"In the age of consumer experience, it's critical that consumers are opting in and they know what's going on," says Jason Tonelli, CEO of Publicis unit Performics. "We've not treated consumers really well from an advertising perspective for a long time. We've got to start to allow consumers to take control of their own data. Let them own the ecosystem they want to be advertised in and allow us as brands, as marketers, to get in front of them with the right message at the right time. I don't thing we're going to get there in the next 12 months - but we're getting closer. If we put the consumer first, focus on business outcomes, not those media metrics that change every minute of the day, we're going to get further along."
- Tonelli says media agencies have seen a cookie-less environment coming for at least four years and preparing for it, because of mobile devices and apps, which don't use them
- Agencies have been moving to consent-driven unique IDs and unified datasets to deal with the cookie meltdown. Most of the communications holding companies have been building out their own user ID platforms
- Marketer and media agency KPIs are changing quickly as a result
"We're starting to think about media differently, how we're buying media to actually drive those new KPIs and we're co-setting them with marketers," Tonelli says. "We're at a very, very interesting time where cookies are part of the equation. But I think this is a broader landscape of change in how programmatic and performance-based advertising and media is being used to drive different KPIs for the CMO. They're not talking to us about cost-per-click or cost-per-acquisition and what's the best price you can give me. They're talking to us about marketing and business outcomes that they're trying to drive from their advertising and marketing activity. When they do that, working in conjunction with their agency, we're able to help them drive towards those outcomes."
- Tonelli says the shift to new CMO KPI's includes concepts like "intent marketing". In the context of search, the blunt approach in an automotive example would typically see a finance company immediately serve a car finance ad or a "buy now" message from a carmaker after a user searches for cars - when all they may be doing is working out which models might be on their shortlist. "We haven't been listening to consumers questions and and even answering the right way for a long time," he says. "If I'm an auto brand and someone is early in their journey, coming to the site and spending time there, watching some videos, is really valuable now. It can actually be more valuable than getting them to a test drive in the short-term."
"If large chunks of personalisation were to disappear, I'm not sure marketing effectiveness is going to suffer greatly."
Jon Bradshaw has been diving back into the research from the likes of MIT and Harvard, looking at the effectiveness of personalisation. It works, he says, with some serious caveats.
First, if consumers feel like they are in control of their data, and it's not creepy, personalised messages are far more effective. "As soon as they feel they are being served advertising that's based on data they actually haven't shared, the effectiveness disappears," says Bradshaw.
"This is not so much an ethical debate about whether we should or shouldn't respect consumer privacy, it's actually about the effectiveness of advertising. The effectiveness of personalisation dissolves when we feel like it's creepy. This is coming out of MIT and Harvard so it's reasonably rigorous research.
"My net take on this is that personalisation can help, but if large chunks of personalisation were to disappear I'm not sure marketing effectiveness is going to suffer greatly."
"I downloaded a privacy app on my phone last week. It blocked something like 12,000 people who had cookied me and were looking to probe my data usage and capture my data. I had no idea who many of them were."
Andy Lark says marketers are "really struggling to digest the issue" around cookies, first party data and where the regulatory environment is headed. "There's a complete lack of education out there around new privacy and data regulation. The worrying thing is not just that they don't necessarily fully understand it at this stage, but that it means effective policies and thinking around strategy are not being informed by the changes."
- Lark says the average marketer is going to wake up over the next two or three years and see "large marketing channels switched off, large parts of their technology investment not working and some of their vendors not around anymore".
- A big question will be whether the regulatory developments in Europe and even the US will extend to the use of first party cookie data. "There's some real challenges in GDPR; how marketers see it and how they implement it," Lark says. "But if you ask the average marketer if they've been on the GDPR website and read the sections related to marketing, because it is called out quite explicitly, the number is low. And worryingly the number of media and web people I talk to who have taken the time to read it is one in 10. We should be influencing policy as it starts to evolve in Australia. I worry we'll end up with a one-size-fits-all strategy like GDPR, not something that actually reflects consumer-side dynamics.
- Lark says what worries him most is that cookies aren't actually the biggest problem. "My biggest concern is that technology companies, masquerading as media companies, are exercising their quite absurd market power to suddenly change the business landscape. It's entirely unacceptable that someone with 80% marketshare wakes up one morning and says 'yes, we're going to change the world. And actually the only one who is going to benefit from this is us.' They are essentially masquerading as their own government entity. That's wrong."
Mi3 Special Report: Australia Post-Cookies, Post-Privacy
- How brands including ANZ, CommBank, Adore Beauty, Little Birdie, Menulog and Westpac are racing for new privacy-compliant ways to market to customers as platform and regulatory changes bite.
- Report covers all of Australia‘s major publishers, their strategies.
- All major alternative IDs covered.
- Plus marketing consultancies, tech provider and agency insights.
- Independent Mi3 report, based on 35-plus interviews, supported by MiQ and Resolution Digital.
How brands including CommBank, Adore Beauty, Little Birdie, Menulog and more are racing for new privacy-compliant ways to market to customers as platform and regulatory changes bite.Get ahead of the curve. DOWNLOAD THE REPORT HERE DOWNLOAD your 67-page report here.
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