Create your very own Auto Publish News/Blog Site and Earn Passive Income in Just 4 Easy Steps
Imagine a world where you bake sweets and cakes. Almost all of your competitors make similar sweets and cakes, but you do well because your cakes are great.
In this world, you and your fellow confectioners leave the market for the same type of chocolate. One company controls a large percentage of this high-quality chocolate offering. Everyone complains that the company is too big and too powerful, but they buy it anyway because the chocolate is good and cheaper than everyone else's.
Suddenly, with much fanfare and public outcry, the world considers chocolate to be harmful to health. It's not that there isn't chocolate. People will still make it and consume it. But the biggest chocolate retailers, including this giant supplier, say: “No more chocolate!”
Are you changing your business model and products to fit the new world? Or will you turn into a chocolate outlaw?
Before you decide, the chocolate major says, “We're going to make something that's just like chocolate, but without the dangerous things the public is worried about.” Trust us. And this new chocolate is only available from us.”
Does this influence your business decision? Do you think the chocolate supplier could take advantage of the situation?
Well, that's where publishers and advertisers are today with third-party cookies. Due to privacy concerns, Google is discontinuing support for third-party cookies. But there is also a “new” version that they say you want. Yet you still have no idea what's in this new morsel.
Who knows what the correct answer is? CMI's chief strategy advisor, Robert Rose, has some ideas. Watch this video or read on for his opinion.
The history of third-party cookies
We've talked about data protection and eliminating third-party cookies a few times on this channel. But recent developments may have you saying, “I just don’t get it.” Will third-party cookies disappear? Will anything change? I have to do something?”
The answer is yes.
So that you don't continue to be frustrated by all the buzzwords, technical details, and duplicity in conversation, I'm going to break it down.
A few weeks ago I talked about Google and the status of the third-party cookie. I've defined what a cookie means and how it goes into personalized or customized ads to a target audience across digital channels.
As I said, the third-party cookie has been a controversial feature for years. But now Google has major market share in web browsers, content/publishers AND search advertising. Google is the hub of the advertising industry.
That's why about two months ago, Apple made a simple but extraordinarily significant change to how it manages podcasts. Before the change, a subscriber who skipped a week or two of a podcast would return to find that the app had downloaded all the missed episodes.
After the recent system update, Apple no longer downloads episodes retroactively, causing many podcasts to lose around 25% of their downloads. Podcasters experienced a collective meltdown. For those who monetize their podcasts through advertising, that's a big deal considering it's a $2 billion industry.
Now imagine that the impact would be almost 300 times greater. Programmatic advertising is a $546 billion industry. Google accounts for about $230 billion of that, so this third-party cookie change is taking on tectonic proportions. If Google eliminates third-party cookies, all companies' advertising performance will be significantly affected. Publishers, media companies, the Interactive Advertising Bureau (IAB), and even tech companies are experiencing toxic freakouts.
Google is, of course, smart. It's not just about removing the third-party cookie. Finally, it also increases their sales. In 2019, Google basically said, “Uh, yeah, hey. We value privacy and are starting to work on new solutions that do not involve third-party cookies. We would be happy to work with you on this. Let’s shoot for, I don’t know, 2022?”
Around that time, the company launched what it called the Google Privacy Sandbox — an “industry-wide effort to develop new technologies that will improve people’s privacy on the web and in apps.”
Uproar over possible solutions without cookies
When Google began work in 2019, there were heated debates about how to proceed with groups like the IAB, which represent the affected industries. There were delays. In 2021, Google said, “OK, we get it.” That's hard. That’s why we will delay the phase-out of third-party cookies until 2023.”
In the meantime, Google just kept going. New technologies were tried out. There was experimentation. No one in advertising or the media paid attention to it, or if they did, they didn't like it. So Google said again, ‘Okay, we’re going to delay it.’ But come on, we’re serious – 2024 is it.”
In 2023, the company introduced the solution for a world without cookies – a cleanroom technology with partner providers such as Habu and LiveRamp. The concept would allow advertisers to match Google data with the product company's data. A data exchange called “Switzerland” was created, a neutral place to identify people to target with ads without either side revealing their data identities. Google called this PAIR – Publisher Advertiser Identity Reconciliation.
To further confuse matters and expand the sanity of the Bingo acronym, Google has also announced FLEDGE – First Locally Executed Decisions over Groups Experiment. It divided people into a number of content categories. The test found that Google's category definitions performed similarly to those using third-party cookies. Luckily, they changed the name to Protected Audience API and said, “Hey, this kind of works. So what do you say?”
Disappointed publishers and others responded, “Meh, I don’t get it.”
And that brings us to today.
A few weeks ago, Google kept its promise. It made real change by limiting the use of third-party cookies to 1% of Chrome browsers, and people weren't happy.
Now news is that IAB – the industry group that represents advertisers and publishers – has released a report outlining all the flaws with Google's privacy sandbox approach and why it's not ready for prime time yet. They shouted, “What?! You’re actually doing what you told us five years ago!”
In their outrage, they not-so-subtly tried to point out that Google might not be transparent in its practices. The British Competition and Markets Authority has taken up the unfounded tip. It essentially said: “Google needs to do more to address the problems with the Privacy Sandbox because, well, because the way they're designing the sandbox may be giving Google an advantage.”
Shocking, right? Google could design the next generation of ad targeting to benefit from everyone else.
Overcome third-party debates with first-party solutions
What does this all mean for you?
You'll be seeing similar headlines about third-party data fixes for a while. There will continue to be talk about standardized methods for targeted advertising. It is in everyone's interest to delay, obfuscate and make everything complex. So don't expect the problem to resolve itself any time soon.
But don't use all of this as an excuse to stop your company, your team, or yourself from refining your first-party data approach – and using the data collected from your customers, website visitors, etc. to Manage how you target your content. Create value for the audiences and customers you want.
Whatever the outcome of all these disputes, it will fundamentally change the way advertising media is bought. It's not a matter of whether it will change, but rather how much and what will change. I guarantee you that no matter what solution ends up becoming the standard, it won't be easier to target content.
If you don't have a first-party data strategy and a way to get a 360-degree view of your audience as they travel through your content experiences, marketing and advertising becomes much more expensive. I know it exactly.
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Cover image by Joseph Kalinowski/Content Marketing Institute
Create your very own Auto Publish News/Blog Site and Earn Passive Income in Just 4 Easy Steps
