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The Impact of Missing Third-Party Cookies on Digital Marketing and Future Plan of Solutions

Introduction and Background 

On 14 Jan 2020, Google announced some changes to the way their Chrome browser will operate in the future. The main feature that sparks most buzz and discussion, not surprisingly, is the deprecation of the third party cookies by 2022. Google was not the first to make this move, as we have seen two other industry leaders head the movement towards a cookieless world. Safari and Firefox have already removed third party cookie tracking from their browsers.

Cookies have been the backbone of digital advertising for decades, enabling everything from media activation, personalization, to measurement. This means that publishers, ad servers, DMPs and more on have been relying on this technology. We believe that the prohibition of third party cookies by browser providers such as Google will have some potential impact on the advertising industry.

The possible revolution caused by the missing of third party cookies from a global perspective

  1. The collection and selection of data

The quantity and quality of user information obtained by the third party data companies will be greatly reduced. Many companies rely on third-party data to generate positioning advertising to the target audience because this can make their advertising more precise and expenditures more effective. Compared with the third party data, the data from the advertisers and the data obtained directly from other media companies and platform companies will gain greater marketing return of investment.

  1. Media and platform providers will take bigger initiative

Advertisers will rely more on media and platform providers, such as Facebook, Google, Amazon on a global perspective and also big Internet Groups in China such as Tencent and Ali. With enough data accumulated, they can cycle these user data as resources in their own product series ecosystems. By building walled gardens of data, these large media groups and ecosystems have greater pricing power of media products.

  1. Advertisers will pay more attention to the construction of their own data

As the value of user data increases, advertisers will pay more attention to the accumulation of their own user data, the combination of CDP and DMP will become particularly important. Opening up their own traffic channels and accumulating user data can greatly reduce the cost of transformation and delivery. Meanwhile, DMPs which rely heavily on unknown IDs and cookies will lose significance, if not all, major functionalities including audience enhancement, similarity modeling and cross-channel frequency control management.

As a response, large global DMP providers (Adobe, Salesforce, Oracle) are investing in and constructing Customer Data Platforms (CDPs) focusing on existent consumer ecosystem while not relying on cookies for data collection and categorization.

  1. Advertising agencies need to make a new breakthrough

The future phase-out supports of third party cookies singlized that the fragmentary and complex market conditions on which agencies depend will gradually change. The traffic flow for big advertisers will be more direct. Facing the new challenges, agencies need to build their own data ecosystems which could be able to connect to the first-party data and have their own DMP to meet with the constantly changing ecosystems, as well as provide better MarTech services for advertisers.

The possible impacts of missing third party cookies on China digital marketing

In terms of programmatic advertising, China’s popular traffic and media platforms of some large internet groups, represented by today’s TouTiao, Tencent, Baidu and Ali, have built a closed-loop of their own eco-system, namely “walled garden”. Their own DMPs or data clouds will not be opened to external products, but generated in their own product ecology of internal system and circulate within. These large internet groups all have a user data pool that is large enough, with multi-terminal user data accesses instead of relying solely on third party cookies. The browser manufacturers’ prohibition of third-party cookies will not fundamentally affect them.

In addition, there are many mobile end traffic platforms in China. The proportion of mobile traffic in China is around 80% of the total traffic, in the meantime, the proportion of pc traffic is far less than that of mobile. The third-party cookie restriction of browser manufacturers has a lower impact in China.

However, we still believe that it’s necessary to make data planning that supports brands or agencies’ current data solutions breaking data monopoly to some extent.

Potential Path Forward

Reaching for the technical methodology of replacing the third party cookies

From a technical point of view, the third-party cookie disabling is a data policy change, and the third party cookie is just a means to obtain user information. In fact, this method is relatively simple and rather replaceable.

Here are two common technologies that can currently replace third party cookies in China.

1Replacing third party cookies with first-party cookies

If the site introduces a third-party SDK for third party effect monitoring, such as Google Analytics, it means that the site trusts Google’s monitoring, Google Analytics is allowed to collect and track the site’s information. These SDKs can still use first-party cookies to complete user identity identifiers. In a word, disabling third party cookies have little impact on this kind of third party SDK. Just change your mind a little.

2Internet environment feature recognition replaces third party cookies

The main function of the third party cookie is to identify the user’s identity so as to know who the user is and when the user visits next time. If there is a technology that can directly obtain the unique identity of the user, there is no need to store the cookie. This technology is “Internet environment feature recognition”.

“Internet environment feature recognition” is a way to track the web browser through the visible configuration and setting information of the browser to the website. Just like the fingerprint on each of our hands, it has a configuration close to unique. A large number of Internet environment feature recognition can be extracted from other browsers technical information, such as canvas fingerprints, WebGL, WebRTC, CSS, etc; To sum up the feature indicators, through the intelligent weighted judgment of the information brought by each indicator, a unique ID belonging to the user can be calculated.

3Encourage clients to focus on first and second-party data strategies

“Data-rich” advertisers like media companies, retailers, D2C brands, travel companies and others who have a direct relationship with their consumers will be ahead of the curve when it comes to a cookie-less world. “Data poor” advertisers who haven’t created a plan to collect, organize and activate first-party data should start mapping out their strategy immediately.

Second-party data strategies are equally important moving forward, especially those with our media partners. Some of the largest holders of first-party data will be likely the content and media companies. It is highly likely that moving forward most content will be behind a login-wall and consumers will get access to that content in exchange for their email address. This will allow content partners to build up their first-party database and associated consumer interests and behaviours. Direct data relationships with the right partners will allow for the augmentation of first-party data for insights and activation purposes.

All of the above technologies may become a possible mainstream trend to replace third party cookies in the future. Additionally, Havas Media recommends that clients seek measurement solutions that resolve and de-duplicate at the identity level, given third party cookies will most likely go away.

Havas Media POV on the evaluation of all media & technology partners and building partnerships with leading ID-based technologies

All media and technology partners, both agencies and client leads, should be evaluated against a cookie-less strategy roadmap.

Clients and agencies need to build relationships with a number of leading ID-based technologies including ID graphs. We will also need to pay close attention to the way our partners are defining their ID technology and sources as browsers like Firefox are already stating they will block third party non-cookie unique IDs. ID technology based on login environments will likely be the most stable in the long run but will be harder to acquire. Additionally, as with current onboarding, relationships with multiple companies will likely be important to get adequate scale and coverage.

Adhering to the vision of creating meaningful differences for brands, companies and society, as well as building meaningful connections between brands and audiences, Havas Media China is actively innovating on, building a localized data platform-Converged based on the digital platform of Havas Group, which is in line with the domestic digital marketing scenarios, so as to provide more efficient and precise digital marketing service for advertisers in the digital marketing environment without cookies.

Originally posted by MTS Staff Writer

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