CPG Brands Can Navigate a Cookieless World With a Little Help From Their Friends
Ever since Apple announced it was limiting third-party cookies two to three years ago, brands have been working to adapt to a cookieless world. With Google jumping on the bandwagon recently, the pressure to adopt cookieless solutions has intensified.
You’ve likely seen this debate among tech providers and publishers, but absent from the conversation are brands, especially consumer packaged goods (CPG) brands. As stakeholders in the future of advertising, marketing technology providers have a responsibility to invite questions from CPG marketers, answer honestly, and move proactively to collaborate on solutions for them and their customers.
Here are some of the questions we’ve been fielding from CPG brands — and how marketing technology providers can help.
Should we focus on first-party data alone?
CPG brands can and should absolutely use their first-party data. As a starting point, many lack access to the first-party data that their retail partners or DTC competitors may have. But what they can collect is valuable. Keep in mind, however, that like other brands, what brands can see is limited to consumer activity within the confines of their own digital properties. The data you do collect offers a mere slice of the customer’s interests, affinities, and behaviors. That’s not to say CPG brands are completely disintermediated from the customer experience, as they have an understanding of consumer segments from other avenues such as focus groups.
But what about that customer’s activity outside their sites? From third-party-cookie panic to privacy regulations, buyers and sellers are at a crossroads on how to capture the increasingly complex digital life of the consumer. With browsers obscuring the view and even breaking important connections, buyers and sellers are missing insights and touchpoints because they can’t see them.
This is where other forms of quality data can help paint a broader view of the customer. Enriching your first-party data with second- and third-party data can provide much-needed intelligence into who customers are, what they like, what they watch, how they watch it, and more. Data enrichment is not a new concept for many brands, but I predict its popularity will grow — and for good reason. Now is the time to advance knowledge of your best customers and help find your next best customers with high-quality data partners.
What are the alternatives to third-party cookie advertising?
There are plenty of alternatives to the ephemeral third-party cookie. From single identity management to consolidating data from PII to anonymous-device data, CPG marketers have options. For example, today cookieless media includes native mobile media (in-app), digital out of home media (DOOH), programmatic audio, and CTV.
The post-cookie era will inevitably lead to media fragmentation outside the web. There’s a wealth of cookieless data tied to IDs in these channels such as over-the-top (OTT) ID, RIDA, or mobile ad identifiers (MAID). MAID, for example, allows granularity in segmentation and profile/audience/tribes definitions. It can provide visitation based on location data. From there, past purchase data extrapolated on the area (neighborhood, households, grids) can imply propensity to purchase and predictability of certain behavior for subsequent targeting. It seems likely that online spend will continue to shift to these non-cookie environments, but don’t count out the open web, as many providers have been developing viable ID solutions and master graphs to help CPG brands with people-based marketing everywhere.
What impact will this new cookieless reality have on customer relationships?
Many CPG brands may be wondering who made browsers boss of the customer relationship? It’s a fair question. As a major contributor to a free Internet for all, CPG brands like other marketers should be at the table during these conversations on the future of advertising.
With increased restrictions and regulations, consumers may see some of their favorite sites close up shop because they simply lack the resources to get ahead of change. Personalization may suffer as well, which consumers have raised their hand for from the brands they love.
That’s why the vendor relationship with CPGs will be more important than ever. First-party data holds a lot of potential value, but CPGs need guidance collecting that data, organizing it in a useful way, enriching it, and activating it. That means having the technology to associate signals with MAIDs and OTT IDs, as well as the ability to translate contextual web activity into consumer behavioral segments. In addition, ID solutions will be mission-critical for connecting customer identity across platforms, devices, and contexts, and providing universal frequency capping and sequential marketing.
We are living in an unprecedented time, where the demise of the third-party cookie allows us to rewrite the Internet and profoundly shift to Advertising 3.0. Contextual and people-based targeting (as opposed to audience) will take a new shape and form. The technology is being built (and rebuilt) now based on ever-changing regulatory and privacy-by-design guidelines. Let’s face it, the cookie has been misused, abused, and misunderstood for some time. Its original purpose was mutated and grew to power $100B+ of programmatic advertising from targeting, data buying, measurement, and attribution. That is why Google has set a two-year timeline to figure out another solution.
CPG brands may feel anxious about a future that holds more questions than answers. And they’re certainly not alone. Marketing technology providers are positioned to assist brands with honest insights, guidance, and the tools they need to move forward with confidence. This collaboration presents a great opportunity for both parties as we move into a new era of digital advertising.
Evgeny Popov is executive vice president of global data solutions at data management firm Lotame.