Do Your Data Relationships Have a Real Future?
Marketers are grappling with a new standard for data privacy, ushered in by regulations like the California Consumer Privacy Act (CCPA) and the European Union’s General Data Protection Regulation (GDPR). The new rules may be seen as a win for consumers, but they’re only as strong as the tools marketers have access to and use for unified compliance across every digital touchpoint, device, and instance of identity.
In addition to the new laws, web browsers are rewriting the rules around cookies. For example, Google recently announced plans to phase out third-party cookies by 2022 while Safari and Firefox have already blocked them. In their place, Google is proposing its Privacy Sandbox as an alternative for preserving data privacy while allowing brands to target ads and measure their performance. Like the data privacy regulations, these moves seem positive for consumers at first glance; however, cookie changes come at the expense of personalization, relevancy, and ad frequency.
Brands and publishers seem to be getting the short end of the stick here. In the absence of cookies, brands may feel undue pressure to go to walled gardens for scale. Meanwhile publishers will have to bet on first-party data collection and monetization, along with its inherent scalability challenges and slim view of the customer. What’s happening with our data relationships?
Starting with the Real Problem: Misinformation
Anxiety around privacy compliance and the upcoming demise of the cookie have created confusion and an increase in misinformation. So, let’s set the record straight on a couple important points. As with any relationship, clear and honest communication is key.
First and foremost, third-party cookies are not the same as third-party data. I’ve seen stories and heard conversations that use the terms almost interchangeably. I can’t stress enough that while third-party cookies are most likely going away, third-party data is very much alive.
For clarification, third-party data informs data segments around demographics, interests, intent, past purchase, and location that can be used for targeting. Examples include new home buyers, people who watch certain TV shows, consumers who purchased certain products in the past, and those in the market for certain products and services. This can be data that originates from offline data providers, publishers who are directly sourcing the data, or even data aggregated from various sources. Reputable sellers of third-party data include companies such as Experian, Dun & Bradstreet, and Bombora. Brands in CPG, QSR, automotive, and many other industries need third-party data to round out their view of the customer.
Now, as for a third-party cookie, it’s a cookie placed on a website and accessible by a domain other than the one a user is visiting. First-party cookies, by contrast, are placed on a website by the domain the user is visiting. Third-party cookies are typically used to store IDs for the purposes of collecting, activating, or measuring data across multiple domains — even multiple domains belonging to the same entity. They are one method for stitching together identities across sites.
Now that we’ve clarified language, let’s dive deeper into how these relationships work. Historically, third-party cookies have provided the infrastructure for connecting and activating third-party data. With third-party cookies phasing out, marketers and their partners need to find alternatives to solve for identity. Brands and publishers will be left with a hodgepodge of different ID types and inefficient connection techniques. This will make it difficult — not impossible — to track identity and, therefore, consumer consent, through GDPR opt-ins or CCPA opt-outs across media properties.
The onus is now on marketing technology providers to develop alternative identity solutions, and/or new techniques via the Privacy Sandbox, such as Google’s TURTLEDOVE. No one has the solution, but here are some suggestions to think about, in the meantime, as we as an industry figure this out.
Consider All Your Options
How can we salvage our important connections with consumers? Marketers and publishers can bring data across devices other than web, such as mobile and OTT. Both have IDs that are standardized on those channels. And if there’s an offline ID key on a parallel path with a hashed email, that can be used as a vehicle to link data across platforms.
Another technique that can sync up two web IDs is probabilistic ID graphing through machine learning. While there isn’t a direct connection made between IDs, data science calculates the probability that two IDs belong to the same device, person, or household based on IP address, browser, user agent, or timestamp.
Data privacy regulations and cookie restrictions are intended for the greater public good, and it’s important to understand that these changes don’t spell the end for advertising. There are effective techniques that can help balance consumer consent and data targeting without the use of third-party cookies.
These methods take sophisticated technology and strong partnerships. Paving the way for the next stage of advertising requires the industry to work together to see success at scale. It’s time to re-evaluate our relationships and consider how open collaboration as opposed to isolation can benefit everyone.
Adam Solomon is CMO at Lotame.