The Post Cookie-Era: a new frontier

“Unfortunately for publishers, privacy and the lack of third-party cookies could limit their ability to unlock the true value of their first-party data" - Mike Woosley, COO at Lotame

With a cookie-less future set to arrive in 2024, all attention from marketers and advertisers is now starting to shift to first-party data (data that is directly sourced from the customer). Discontinuing cookies is such a game changer especially on Google Chrome, because it make up two-thirds of the web. Meanwhile Apple has already given its consumers the power for companies to track them or not with a touch of a button. Cookies lack that opt-in functionality, which gives people choice to being tracked or not, similar to what Apple has introduced. The industry has consequently called for better alternatives that can not only meet higher privacy standards, but also satisfy both consumers and advertisers.

First-party data collection is going to be key for marketers and advertisers. It's set to be one of the most popular methods of data collection and targeting in a post-cookie era. This is because it provides some of the most detailed data sources out there, is more straightforward when it comes to compliance with privacy laws, and is rich enough in data to enable you to target the right customers. Without having granular data sets like first-party data, there will be limitations to how well audiences can be targeted and segmented. For instance, one publisher could identify a consumer as a movie junkie, but it will be more difficult to tell whether that consumer is interested in romantic comedies or action films, influencing the advertisers bidding for that space.

Secondly, this type of data is granular enough to provide enough value to advertisers. However, other types of data are less granular and more likely to lead to some blind targeting. This would lead to a lower return on investment (ROI) and put advertisers off.

As a result, ‘Google Topics’ has replaced ‘Google Cohorts’. Google Topics provides advertisers with data on user interests. When a user lands on a website that supports Topics for ad purposes, the browser will load up some topics that the user has expressed interest in from the past few weeks. Top topics are randomly selected and shared with advertisers, who will then match them up with ads. This is where the future of advertising is heading. Companies set to thrive in this upcoming first-party data era will be tied to social media platforms and Connected TV platforms; this is where everyone’s attention is heading. This is because advertising is more contextual in these spaces, and so more relevant to the end consumer.

Netflix recently announced a partnership with Microsoft to power all its global advertising needs as it plans to introduce a new lower priced, ad supported subscription plan. Netflix already has access to a lot of first-party data from its audience, so its partnership with Microsoft will not only amplify the powerful opportunities it currently has to tap into what it knows about its audience through serving personalised advertising, it will also provide strong privacy protection for its members. Similarly, Amazon is endowed with first-party data and introduced Amazon Ads in 2012 to help diversify revenue streams. Using its first-party data, it has gained insight into users' shopping habits and trends. 

It’s clear, over the past couple of years, that the advertising industry has faced challenges. In April 2021, Apple launched a new update with iOS 14.5, which gave consumers more control over their data. It gave them the choice to share the data that’s collected about them or not, across apps. In other words, it introduced an advertising opt-in feature. Google also plans to implement changes on Android, but not for a year or so. But so far, from what’s been observed from Apple users, a wide majority of users naturally opt-out of advertising, because we live in a world where we our data is ‘on auction’. This is depicted perfectly in a short TV commercial that Apple released called 'Privacy on iPhone: Data Auction', which illustrates how users feel about their digital footprint being monitored and monetised.

With the coming changes of opt-in tracking technology and alternatives to cookies, it’s unclear if there will be a significant drop in advertising revenue or, if people are given the choice, it will encourage them to provide more personal data.