Maximize Digital Marketing Investments by Harnessing Untapped Incrementality

By Julian Baring

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Google's initial announcement to completely do away with third-party cookies has caused concern among industry players. However, there is significant opportunity for advertisers and publishers if they are willing to test and learn.

As the industry evolves and moves toward a new chapter, this will be critical. The third-party cookie deprecation will — even with Chrome's recent delay — be here before we know it. The industry is transitioning into a future state that will look very different from today's landscape.

Imagine first, a world with no IDs, leaving marketers to advertise contextually only. Or perhaps envision a second future state — a state in which a lot of advertisers are already achieving meaningful results and value — where the industry relies heavily on first-party IDs to reach and connect with their audience. Of course, Google could maintain prominence through its Federated Learning of Cohorts (FLoC).

Almost certainly the future will see an amalgamation of all these future-states: The third-party cookie deprecation opening new opportunities along with smart marketers and publishers driving notable value by harnessing the untapped incrementality found in contextual and first-party IDs.

So, what should we be looking for?

Contextual advertising will go back in time

Taking a closer look at the first of these three future states, contextual advertising in isolation is going back in time to the days before the advent of programmatic. It's going back to where non-digital advertising has been forever. Context acts as a proxy for the audience that you're after — so this isn't a viable future-state from the promise of the programmatic ecosystem but is, in effect, a major step backwards.

Instead of targeting a user based on their specific online characteristics and behavior, a future with only contextual means advertisers will infer who their audience is based on the content of the websites they visit.

This isn't going to be as precise as relying on third-party cookies. But it's going to cost a lot less. And the truth is, not all third-party data has been that great of quality or worth all that much over the years. Advertisers who can master the art of contextualizing will be able to harvest quality, actionable data in a cost-effective way.

The industry is already moving to the first-party ID future

Even if they're not banned quite yet, third-party cookies are already proving themselves obsolete. They're causing match rates to decline as well as data leakage problems across multiple platforms in the industry. There is still too much money being spent on these cookies that aren't buying audiences or the attention of the underlying consumer.

The big "not-so-secret" is that cookie-deprecation has already occurred for potentially more than 40 percent of your available audience, according to StatCounter. Safari and Firefox have been blocking third-party cookies for years rendering those environments blind to buyers. But first party IDs provide fidelity to identify users in these environments.

There is a big win here, and a leveling of the playing field for independent agencies and sophisticated forward-thinking marketers. The move from third-party data to first presents an opportunity to purchase inventory that costs less, due to lower bid density, and in many cases, performs better and positively impacts overall campaign KPIs. Smart advertisers are getting in the first-party game now — rethinking their traditional trading practices — to take full advantage.

Ensure your ad tech stack can keep up

When it comes to building and future proofing an ad tech stack, the traditional "best-of-breed" approach advertisers have followed over the last 10 years or so might not be enough. The third-party cookie deprecation makes it almost impossible to link data from one platform to another in a consistent fashion — leading to excessive data loss.

Instead, look to build an ad tech stack built on a single ID framework. Keeping this in mind, then start to look for platforms that work together and complement each other. And remember to give yourself plenty of time and money to test and figure out which platforms make the most sense for you.

Julian Baring is the regional president, Americas at Adform.

The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.