As a marketer, you’ve probably heard the term “walled garden,” referring to the tightly controlled advertising ecosystems that Google, Facebook, Apple and Amazon have built to dominate the internet and modern-day digital commerce. In the name of privacy, these companies have recently announced efforts to raise their walls even higher with the elimination of third-party cookies, which allowed behavioral tracking and advertising across the open internet.
Google owns 88% of the search engine market1 and 50% of all browser-based traffic in the U.S.2 Meanwhile, Facebook has managed to convince 69% of the U.S adult population to regularly consume its content.3 The walled gardens are owning identity! I’ll talk more about that later.
So who are the primary players impacted most by this move away from third-party cookies? Well, it’s the companies that either built their platforms or justify their value based on distribution and tracking via third-party cookies. Those impacted include:
- Independent ad exchanges
- Third-party data aggregators
- Commissioned affiliates
- Third-party referential graphs
- Multi-touch attribution
- Publishers and media owners
Without third-party cookies, many adtech and martech companies are scrambling to reinvent their entire platforms or risk becoming irrelevant. As cookies continue to lose relevance, marketers who want to reach actual customers and serve personalized, meaningful messages must re-evaluate their identity and data collection strategy. Industry regulations are raising the stakes for getting identity wrong and are forcing all players in the garden (walled or not) to take privacy even more seriously. While advertisers wait anxiously to see what life will look like after third-party cookies, I always find it intriguing to look at how other industries have adapted to fundamental shifts.
Third-Party Cookies and Pesticides
If you’ve ever tried your hand at gardening, you understand that it’s not as easy as “plant it and watch it grow.” Bugs, weeds, diseases, animals and weather conditions can quickly spoil the fruits of your labor. For years the farming and gardening communities championed chemicals as the answer to help fend off many of these threats. However, we’ve since discovered that synthetic products have a downside, one that can threaten the environment and your health. Various industry regulations have been passed that ensure the safety of the public, the food supply, and the environment. Gardeners and farmers had to adapt to the regulatory requirements that forced them to innovate and find healthier alternatives to maintaining yields while ensuring health. Gardeners began shifting to more organic practices, using natural controls to reduce or eliminate pests and disease and natural sources of soil enrichment. Rather than treating the symptoms, they began treating the root problem.
The Gardener’s Secret Was in the Soil
One of the keys to a healthy organic garden lies in the soil. Good soil promotes healthy plants, and healthy plants are far less susceptible to pests and disease. Proper PH-balance enables plants to use nutrients from the soil. Focusing on the most important factor that was in the gardener’s control established balance in the garden. The gardener ended up with a healthier plant, environment and customer without compromise or dependence on non-natural sources. This shifted market demand to producers of organic compost and fertilizers and forced synthetic producers to innovate and comply. The market didn’t go away; it just changed.
The Advertiser’s Secret Is in First-Party Data
In the same way gardeners adapted to regulatory change, advertisers must adapt to new and ever-changing customer privacy regulations and take command and control of relationships by focusing on optimization, resolution and enrichment of their “private” first-party data. A brand’s data is like a gardener’s soil; it’s the single most important factor, within the advertiser’s control, to grow, nurture and establish positive sustainable relationships with their customers. By getting first-party identity and data management right, balance is established in the marketing and advertising ecosystem, resulting in meaningful engagements and long-lasting relationships. Advertisers are now being forced to address the root problem rather than treat the symptoms of third-party cookie dependence. Is there going to be a privacy-compliant and industry-accepted replacement technology? No one really knows. What we do know is that first-party consent=based personally identifiable information (PII) frameworks will play a key role in enabling safe and secure partnerships between advertisers and publishers.
Where to start?
1. Build a First-Party Private Identity Graph
Identity is the cornerstone of any brand’s audience or analytics needs, not to mention operational, collaboration, and the list could go on. A brand should use all the data that’s available to produce timely and effective identification and consolidation of information and maintain consolidated views of entities over time. This includes utilizing a first-party tracking pixel to ingest first-party cookies and mobile ad IDs (MAIDs) as a digital extension of a person’s channel-less persona. Finally, make sure your graph is tailored to your specific brand and use case needs. No one knows your industry or competitive differentiation like you do. Make sure that differentiation is reflected in your identity graph.
2. Make Customer Authentication a Top Priority
Develop an enterprise-wide strategy for increasing authentication across all your online and offline touchpoints. Your ability to talk to people is predicated on your ability to know them. Are you giving your customers or prospects a chance to make themselves known? Should you incentivize them as a value exchange for making themselves known?
3. Do Your Vendor Research and Impact Analysis
Make sure you take the time to understand how each of your existing marketing and advertising technology vendors are preparing for a cookie-less world. For vendors that rely heavily on third-party cookies, make sure you ask quantitative and qualitative questions. When will their cookieless capabilities be available for general release? What are proven PII-based match rates with Supply Side or Demand Side Platforms? Is the new capability being widely adopted by other respected brands in the industry? Does this new capability present a potential legal or public relations liability to my brand?
4. Establish Direct Deals with Publishers
The world’s largest media brands (e.g. Warner, Disney, NBC, Viacom) are already developing their own private gardens as they already have adequate identity coverage domestically and/or globally. This concept allows them the benefit of monetizing their known high-value audiences and recapture advertising market share from the walled gardens. We will see a lot of advertisers doing direct deals with these publishers, which is how it used to work. Publishers with logged-in users (e.g. Warner’s HBO Max) will finally have the last laugh versus programmatic bidding.
With all the uncertainty surrounding the end of third-party cookies, ever-changing privacy regulations and new and emerging martech and adtech offerings, our point of view is that a world class first-party private identity and data graph inside a fully integrated and configurable solution framework is the answer. Despite the end of third-party cookies, taking control of identity across all channels (online and offline) will allow you to take control of marketing intelligence to make people’s experiences better than ever before.