By Vihan Sharma, European Managing Director, LiveRamp
2020 was a turbulent year for adtech and digital marketing, but not just because of the pandemic. In fact, for many, the biggest impact to the industry was Google’s decision to deprecate third-party cookies by 2022.
The decision from Google Chrome came in line with increased focus and scrutiny of how consumer data is being collected and used. And Google was not alone – 2020 also saw Apple announce upcoming changes to their IDFA to give users more control over the data they are sharing, and transparency over how it is being used to serve them adverts.
The end of third-party cookies may mark the end of an era of digital marketing – but it is also an opportunity to build back a better internet, one that centres on customers and their privacy. The question then becomes, how can we create a more sustainable future for the industry that is better for consumers, brands, agencies and publishers alike?
The answer lies in taking a people-based approach. If we truly want to address the challenges presented by the deprecation of third-party cookies and the changes in the privacy landscape, we must find a solution that performs better than the third-party cookies it will replace. This solution must simultaneously tackle many of the inefficiencies of cookie-based workflows — namely poor accuracy and addressability — all while putting consumer privacy and trust first. Taking a people-based approach, using an identifier that centres on individuals versus devices, goes a long way to reaching this goal, and provides a strong framework for a new way forward in 2021 and beyond.
Yet as we see the industry landscape shift so dramatically, brands can also use this as an opportunity to go further, working to truly maximise the potential of their first-party data through collaboration, all while keeping customer privacy front and centre.
Data collaboration, where two parties can securely connect their own first party data without losing control, has the potential to dramatically improve a brand’s customer intelligence. For example, consider a clothing brand partnering with a fashion chain that sells their items. For the clothing brand, they gain deeper insights that help them to adapt their strategy: who is buying their clothes, how successful existing promotions are, which items are bought together and when. They may then collaborate with the fashion store on offers – perhaps less popular items can be offered at a discount with popular ones, moving slower-moving inventory and generating higher sales. This approach benefits all parties involved, helping the brand and the shop to sell more, and giving the customer a more relevant experience and saving them money through offers.
Innovation does not have to end with existing partnerships or partner sets. In fact, companies who on the surface have no clear connection, or who work in completely different industries, can leverage data collaboration to identify unique data insights to help them reach their customer base.
A collaboration between two different sectors trying to reach similar consumers could be beneficial for all parties, as well. For example, a leading sports brand with millions of app downloads can collaborate with a CPG brand interested in reaching health conscious consumers, generating a greater return on investment for each advert and helping the customer receive more relevant adverts within a privacy-first framework.
As we enter the final year of third-party cookies and the adtech ecosystem continues to grow and evolve, the best brands will not only adopt a people-based approach to move forward from third-party cookies but will take this a step further and realise the potential of data collaboration.
In fact, a recent report from specialised management consultancy provider Winterberry Group found that the deprecation of third-party cookies was already driving a surge of innovation towards data collaboration solutions, something which is only likely to grow as more brands realise its potential.
Brands must ask themselves how they can better serve their customers, themselves and their partners, adapting to the changes in the landscape while also putting privacy first. Within a people-based framework, data collaboration has the potential to drive new and exciting insights for brands across the board, and is a key technology to engage with as digital marketing evolves.