A Cookie-less Web
03 Jan 2021 » Opinion
I wanted to start 2021 with a view of the future, probably trying to forget the past. At least, with my personal view on an important point that will affect us all in the digital marketing world soon. Unless you have been hiding in a cave, you already know that there is a death sentence over browser cookies. It all started with Apple’s crusade against 3rd party cookies, but later Google committed to remove these cookies completely by 2022 from its browser. Let me explain what I think will happen.
We first need to understand what 3rd party cookies are used today for: advertising. Without getting into the details, they are used to know your online behaviour across multiple websites and create audiences based on that information. Obviously, this only happens if a website adds advertising tags. Well, all of this will stop working. Consequently, advertising agencies will not be able to create audiences on behalf of their customers. Whether this is good or bad, I will leave it for another day.
And, while I have only mentioned 3rd party cookies, I also believe that, in the future, all types of cookies will be blocked. One can even argue that this is a very old technology, which was intended for a different purpose. By the way, Apple is already targeting certain 1st party cookies.
Does this mean that we will not be able to store anything in browsers? Absolutely not. The good news is that there is an alternative to cookies. All modern browsers offer a technology called Web Storage. It is much more advanced than cookies: easier programming interface, larger capacity and tighter security. Almost everything you can do with 1st party cookies can be done with Web Storage. For example, it is trivial to use it to store a random ID to identify a browser. So, applications like Adobe Analytics should be able to continue working as before, with little modifications.
However, not all is going to be the same. The main limitation of Web Storage is that it cannot be used across domains. In other words, it does not offer a solution for 3rd party cookies and I would not expect any plans to change that. So, advertising technologies will not get a substitute to continue working as before.
The rise of 1st party data
The main consequence will be that 1st party data will become gold, if it was not already. Note that I am not talking about cookies anymore, but data. In case you are not familiar with 1st party data, it refers to information about the clients/consumers/visitors of a business, collected by this business. This last clarification is critical. It must be data unique to a company, data that cannot be purchased in the market. Here you have some examples of 1st party data:
- Profile data provided by the user: name, gender, age, address…
- Transactional data: purchases, phone calls, support tickets, emails sent…
- Behavioural data: website browsing history, app usage, visits to stores/branches…
You now need a technology to collect all that data in a single place, combine it and create useful audiences out of it. If this sounds like a job for the Adobe Experience Platform (see my introductory posts: part 1 & part 2), it is because this is the right tool for it. In other words, instead of relying on external agencies to create the segmentation, advertisers and publishers will have to take responsibility of managing their own data. Not only this: companies will also be compared by the amount of data they have about their users or customers.
Instead of 3rd party cookies and ID syncs, advertisers and publishers will exchange the data directly, using a common key. Usually, this is the email address of the user, hashed for security and privacy. In fact, this functionality is already present, for example, in people-based destinations of Audience Manager.
Winners and losers
From the previous section, you can probably guess there will be winners and losers.
Undoubtedly, companies amassing huge amounts of data about their visitors will take the lead. Some of them are very well known: Facebook, LinkedIn (Microsoft), Google, Amazon… If you have an account with any of them, they know everything about you, even the underwear you will choose tomorrow. In fact, these companies are already using this massive quantity of data in their own benefit. They can create fine-grained audiences based on their own data and sell it to advertisers.
There will be room for winners on the publishers’ side. We are already seeing a trend amongst them: putting the content behind paywalls. Current advertising is not bringing enough revenue and media companies have started to charge to access their content, the same way we use to pay for physical newspapers and DVDs. There is a side-effect to the paywall: people have to self-identify to view the content. Therefore, it makes it very easy to link online behaviour to an individual. No need to worry about expiring cookies, the user has to always log on.
There are two things publishers can do with their first party data: create audiences and sell them to advertisers (just like the tech giants) or use the email address as a key to receive audiences from advertisers. In summary, advertising will still be present in digital media, but will not be the only source of income.
In general, any website that successfully manages to get users to self-identify and have the capacity to hoard data, will greatly increase its value. Personally, I find this sometimes annoying, as I do not want to always create an account. On the other hand, I also understand that there is no other alternative to survive. Data is becoming the new currency, but this data needs to be tied to individual to make it worth.
At the other end of the spectrum, we will see many companies failing.
Let me start with the digital advertising world. My prediction is that many companies acting as middle-men will disappear. I am thinking in DSPs, SSPs, ad networks and similar businesses. They all rely on 3rd party cookies and work as intermediaries between advertisers and publishers. Without cookies and with direct integrations between publishers and advertisers, their future does not look good. I am sure some of them will re-invent themselves and succeed, but others will just have to stop their operations.
New regulations will also make it more difficult for these middle-men to thrive. For example, I could envision a market where, instead of cookies, hashed email addresses are exchanged. However, regulatory bodies will not be very impressed and will likely be very strict about that.
I can also see small companies, both advertisers and publishers, being hit by the lack of 3rd party cookies. They currently rely on these middle-men for all their advertising activities. If they cannot convince their visitors to self-identify or if they cannot invest in the technology needed to manage their data, they will not be able to play in the new arena. Think about a small company that relies on its advertising to get a steady stream of visitors or a publisher, not big enough to offer enough value in exchange of signing up.
Unfortunately, all these losers will shrink the competition, which does not tend to be a good think. Especially if the winners are big companies which are already making a fortune. I wonder if the people who have made the decisions to take this route thought about it.
Throughout this post, I have been talking about data as a commodity. It is, but all actors must abide to the law, whether they like it or not. GDPR, CCPA and similar legislation mandate the acquisition of consent. In other words, you can only collect data about an individual for marketing purposes if, and only if, this individual has provided clear consent. Many people think that big companies ignore the law and harvest all the data they can, legally or otherwise. I have been in enough projects to see that this is not the case and we need to be very clear that nobody crosses that line.
All marketing efforts must have consent embedded in them. It is key to the future of the industry. People need to know they are in control of their data, so they are willing to share it with us.