Six months ago, I wrote an article about the death of the third-party cookie, the panic it was generating among advertisers and the new opportunities it presented for the digital advertising industry. Imagine having only six months to reinvent the way digital advertising — a $500 billion space — does business. Those were the stakes as Google’s 2022 deadline quickly approached for it to join its competitors in shutting down support for third-party cookies. For context around the what, who and why, please read my previous article.
Then Google announced it would delay this move by 18 months. So what does this mean for the rest of us?
When Google declared its 18 month reprieve, it pushed the phase-out of third-party cookies to mid-2023 with plans to finish by late-2023. The first rational question to this announcement given the original timeline of early 2022 is why? Google’s official stance is, “While there’s considerable progress with this initiative, it’s become clear that more time is needed across the ecosystem to get this right.” Yes, but how could they have misjudged this timeline this badly? The truth is, Google is responsible for about 20% of the entire online advertising industry so this isn’t charity — it’s self-interest.
With its original announcement in 2020, Google also revealed the future of cookies-less personalization: Privacy Sandbox. Privacy Sandbox is Google’s new initiative that maintains user privacy while providing a secure and controlled environment for personalizing the user experience. The reality is, this is not a simple solution or product, this is a complete transformation of how every website will cater to the user experience. It just wasn’t ready in time for the original deadline. Moreover, Google was already in hot water with the UK watchdog, Competition and Markets Authority, around how its decision might impact the advertising industry. Quite frankly, everyone knew Google wasn’t ready for this.
What Happens Now?
I imagine most businesses out there are now breathing a sigh of relief. But what comes next will be one of the most important decisions for every digital team. That decision for most will be to punt their data initiatives focused on removing their dependency on third-party cookies off by another year. All that will do is put them (yet again) in a state of panic in early 2023. What these teams don’t realize is this future is inevitable (Apple, Microsoft and Mozilla are already there) and to adapt to this new reality, 18 months is barely enough. Hence, the few organizations that look at this delay as an opportunity to transform their business and ready it for the future are going to win the next decade — pure and simple.
Cookies Are Dead, Long Live (First-Party) Cookies
Just because third-party cookies are going away doesn’t mean you stop collecting data and asking the user permission to do so. With GDPR and CCPA, websites still require a cookie banner to get the user consent and collect their data to build using first-party cookies. Consent Management Platforms have exploded on the digital scene because of GDPR and CCPA, but their role is now more important than ever because collecting first-party data will be the most reliable source of user information for any organization.
Take Control of Your First-Party Data
Now that you have collected all of this first-party data, what do you do with it? Without a doubt, the best investment digital organizations should make right now is in taking control of their first-party data. While taking this control is no simple matter, everyone should take comfort in the fact that they have no other choice. With the emergence and maturity of commercial CDPs, organizations can now manage their data through a single source of truth. CDPs enable organizations to unify their first-party data from sources like CRMs, Analytics, Data Warehouses and ERPs into a 360-degree view of their customers. Having this view can help activate on those profiles by providing those customers unique and personalized experiences, regardless of the digital channel, at every step of their user journey.
Related Article: Now You See Me, Now You Don't: Navigating the Cookie-less World
Machine Learning Algorithms Can Do it Faster and Better
One area we see continued growth and investment nowadays is machine learning (ML) algorithms and data. With third-party cookies going away, the scarcity of data makes it more valuable. Hence, making the most of the data you have by utilizing ML algorithms to analyze user behavior and recommending how to engage each user better is more critical than ever. Despite all of the advances in data management, this remains a less mature area than others and would require some innovation from each organization as well as the product companies that build data management platforms.
Make no mistake about it, data and experience have never been more intertwined. It is imperative that every organization realizes this future and caters to it. For once, there is no need to read the tea leaves to see the future — just muster the courage to act on it before it is too late.
Learn how you can join our contributor community.