The replacement solution battle wages on…
While some browsers like Safari and Firefox have already phased out cookies, Chrome has delayed its plans to phase them out time and time again. And since Google Chrome has over 60% of the global market share of browsers, cookies won’t be officially over until Chrome says they are. Chrome’s struggle to find a viable replacement for cookies and pushback from marketers delayed the disappearance of cookies in 2021 and again this year; the latest news from Google says Chrome will finally get rid of cookies by the end of 2023—what is hopefully the last update in a series of delays. While Chrome is struggling with creating its own replacement—their “privacy-first alternative” called FLoC (Federated Learning of Cohorts) was terminated in January 2022, and now they’re back with ideas for a refreshed alternative, Topics—marketers, too, are struggling to figure out how they’ll function in a post-third-party-cookie world following the set 2023 deadline.
Over half of companies are unprepared for a future without third-party cookies fueling a significant portion of their advertising. As a result, marketers are scrambling to identify solutions that will be able to fill the eventual gap left by cookies. The loss of third-party cookies is estimated to initially cut advertiser revenue by 70 percent—and it is still unclear how, and whether, this revenue is recuperable with the current cohort of alternatives proposed by Google and other media companies, and other substitutes like universal ID solutions and IP address targeting. A lot of these solutions, like Google’s, are still in the nascent stages of development and implementation—a clear sign to marketers that they need to pick up the pace in building cookieless infrastructure to thrive post-Cookiepocalypse. As a result, sixty percent of marketers believe they’ll need multiple identity solutions to thrive in a post-cookie world—a collage of tactics and tools used to make up the lost revenue left by the cookie gap, both in terms of identity marketing and advertising.
Some of the identity solutions that may come to replace cookies include Google’s Topics, Universal IDs, and IP Address targeting. While FLoC hit one roadblock after another, Google’s Topics is built with a completely different architecture in mind—Topics will function by assigning a group of topics to each user based on their browsing habits (like “Sports” or “Outdoor Lifestyle”) with a new one added each week for a total of five of the most recent topics a user has browsed, along with a sixth random topic included to prevent personal identification. Unlike FLoC, which grouped people with similar browsing habits together, Topics focuses on the individual, but with less particularities. Google considers this a middle-ground for advertisers that will deter shady mechanisms to track people by offering them a privacy-first alternative following the dissolution of cookies. However, advertisers aren’t happy with how infrequently Topics updates and with how little information is provided. Some marketers see little value in Google’s proposed alternative, and with this solution giving Google a leg up over its competitors, it seems advertisers will resort to other tactics anyway.
Universal ID solutions, alternatively, offer a standardized ID that all participating companies can harness to identify consumers across the web. First-party and offline data can be used to create a Universal ID for a user, which can then be used to target that individual across devices and serve them with relevant ads. Identity graphs and ID solutions function in tandem to help an advertiser launch the right email campaigns, choose the right display advertising, and engage in customer acquisition. Unfortunately, some Universal ID solutions are based on third party cookies themselves; however, others like Stirista’s data solutions were built from the ground up without third-party cookies involved.
A third solution is IP Address targeting. With IP Address targeting, you target a consumer or business by using their IP address. IP intelligence solutions have been available in the B2B (specifically ABM) space for quite some time and have enabled account-based targeting and website identification. They are also used in tandem with cookies to enable persona filtering (ex. seniority, job function). In recent years IP intelligence solutions that enable household level targeting have emerged primarily as a direct result of the rise in CTV and OTT advertising. IP solutions built utilizing a combination of business and household IP signals can provide a unique combination of business, business persona and consumer demographics for targeted marketing. Given the role that IP address plays in fraud detection, bot detection and user authentication on the internet there are reasons to believe that the role IP address plays in the ad targeting ecosystem should have some longevity.
The big endgame debate in adtech continues to revolve around Universal ID vs. “team Google”, with IP solutions riding shotgun. Regardless of the outcome, marketers will need to align their solution stacks, audience identification approaches, and marketing programs accordingly. Much like with the implementation of GDPR, which saw overnight ad placement inventories in the EU drop by as much as 60% in some cases, unprepared marketers could see programs failing instantly. Overall there is a great awareness among marketers that “armageddon” is coming. However, marketers are still unsure how they’ll replace cookies in the long run. There has been a shift towards IP solutions, driven primarily by B2B and CTV/OTT use cases, because it is one of the few viable cookie-less options. MAID/HEM solutions are also being embraced, however the future of the mobile ad ID looks more bleak than the 3rd party cookie. Ultimately the dust will settle on which solution carries the freight in the adtech ecosystem, and it is imperative that marketers, solutions providers and data providers prepare now for any possible outcome.
Targeting is just the tip of the iceberg
We are all pretty familiar with the role of the 3rd party cookie in targeting, but the more significant impact of cookie deprecation lays “below the waterline”. Cookie targeting is just the “tip of the iceberg” with most of the use cases floating in the darkness below. Machine learning solutions that are the driving force behind bidding engines, optimization models, profiling models, look-a-like solutions, behavioral models and many more are built around outcomes derived from user cookies. Not to mention, much of the raw ingredients used to derive these outcomes are also collected via the cookie. Data science and data engineering teams have their work cut out for them and in many use cases will not be able to replicate the precision and recall they once achieved. The impact “below the waterline” presents the biggest challenge for marketers. Audience targeting, media channels, campaign metrics, engagement metrics, industry benchmarks and messaging approaches could all get disrupted as a result. Furthermore, not only will this require changes in tactics and thinking, but it will also require the marketer to dive into the “sausage making” as they navigate the cookie-less paradigm and evaluate solution partners and tech stacks. Most marketers would confess that they really just now fully grasp how cookie targeting, data collection and cookie-syncing actually works. The underlying reliance on cookies in driving value, beyond just targeting, from software and data solutions providers, presents the biggest risk for marketers and goes far beyond just serving an ad.
The shift to a post-cookie world has marketers rethinking their media mixes and how they will reallocate attention to different media avenues. A Thrive Analytics report surveyed 225 B2B marketers on their advertising and post-cookie thoughts. These organizations ranged in type from transportation to telecom, answering questions based in the marketing and advertising spheres.
These businesses believe website analytics (87%), targeted advertising (76%), and data integrations (67%) are the most significant areas of impact on a cookie-less future. When asked about a cookie-less solution being a deciding factor in marketing decisions, 71 percent stated it was essential. This data makes sense—since cookies generally formed the basis for businesses’ current targeted advertising and their analytics results, businesses are accurately forecasting that these areas will face the greatest upheaval post-cookies. What remains is figuring out the right solutions to bridge the gap between a cookie world and a cookie-less world—before the transition is inevitable, and marketers must scramble to recoup their losses.
According to the Thrive Analytics report, one in five businesses that don’t use TV advertising plan to add it to their marketing mix. Sixty percent of these businesses plan to do within the six months. Over half of these businesses are highly confident it will happen, while 38% believe it will. CTV is one area of increased significance for companies. The cost of developing content (75%) and media placements (63%), however, are the biggest challenges to incorporating TV into the marketing mix. Only 36% of respondents feel they are very knowledgeable about CTV. Forty-six percent feel they have some knowledge or have no knowledge at all about CTV. Fifty-four percent would implement television advertising, specifically CTV and OTT, if they could accurately determine their target audience and track the response resulting from campaigns. CTV seems to be one of the avenues that has a lot of potential post-cookies—and as a result, it’s wise to invest in CTV solutions before the Cookiepocalypse takes over. CTV is positioned to thrive as cookies fall away—since CTV runs on first-party data, reaching an audience through their smart TVs is a step in the right direction for advertising post-cookies.
Where do we go from here?
Although the clouds are parting a little bit, it is still unclear how a move to a cookie-less paradigm will impact B2B marketing and what actions we should be taking now. As a starting point it is imperative that marketers understand how much they directly rely on cookies within their programs and indirectly the role cookies play in the value proposition of their solution stack (i.e. What’s below the waterline?). Unfortunately this will require a donning of the work gloves and some time spent in the engine room understanding what drives the ship. It is also in their best interest to evaluate cookie-less options such as IP intelligence solutions to better understand their limitations, capabilities, new metrics, benchmarks, data requirements, attribution and performance characteristics. It is safe to say that these types of offerings will persist regardless of the solution the industry lands on and they are also key to unlocking emerging advertising channels in CTV and OTT (no pun intended). Staying informed, assessing and evaluating the solution stack risk, and testing currently available options is the best path forward.
Although advertisers have relied heavily in the past on cookies to fuel marketing campaigns, cookies have real flaws—cookies are device-based, meaning you can’t get a complete picture of an individual as they switch from their mobile phone to their laptop or to any other connected devices on the customer journey. Most consumers will use multiple devices on their way through the consumer journey, especially for B2B purchases, in which customers face a longer sales funnel and in which it pays for companies to form relationships with their customers over time.
Now is not only the time to search for alternative methods of targeting customers, but for companies to refine and polish their advertising strategy to ensure more personalization and better connections with customers—to do what cookies could never achieve.
Improvements in digital advertising intelligence and increased identity marketing will be the hallmarks of an effective B2B advertising campaign—one that spans multiple devices, engages with customers at multiple levels through the customer journey, and one that remains accurate and personalized. With cookies biting the dust, the door is wide open for more accurate forms of identity marketing and for multiple effective advertising tools to come to the fore.
Powered by Stirista’s Identity Graph, AccessB2B allows marketers to build email, CTV, and digital campaigns with a comprehensive attribution model that drives revenue and high-value leads. The only B2B platform to offer targeting, onboarding, and activation capabilities in one place.