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Why Marketers Shouldn’t Fear The Cookieless Future

Tom Cheli is CEO of Frequence, a leading advertising sales automation and workflow software.

The coming demise of the third-party tracking cookie has been on top of the minds of publishers, brands and advertisers for over a year now. First announced in 2020, then postponed, the phase-out of this ubiquitous surveillance technology should somewhat enhance consumer privacy, while at the same time, upend the economics of digital ad targeting that has made ad-supported content sustainable across the open internet for many years.

Local-market advertisers and media companies will have particular challenges to contend with as a result of cookie depreciation, but they need not despair. The fact is that cookie-based targeting may not have been as effective as most of us have been led to believe, and tools already exist to help marketers of all sizes reach the right customers to grow their business without the need for third-party cookies.

Cookies: All They Were Cracked Up to Be?

Arslan Aziz, an assistant professor at the University of British Columbia business school, found in 2016 that ads that use cookie tracking improved performance by a mere 2.7%. It’s not the most compelling boost. The effectiveness of cookie-based ad targeting has never been based entirely on core efficiency but rather the sheer scale that technology and big data bring to bear across millions of interactions. 

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Because local-market advertisers and media companies rarely employ that level of scale, cookie depreciation could turn out to be less disruptive for them than it will be for the 60% of U.S. marketers who believe they’ll need multiple identity solutions to survive in a post-cookie world.

The solutions being developed to replace cookies have real promise and will likely exceed the effectiveness of cookies for local-market digital advertisers. Publishers with authenticated audiences can provide the opportunity for scalable people-based campaigns outside the walled gardens, and advertisers and publishers will benefit from establishing more direct relationships with their new and existing customers. 

What Will the Future Hold?

Advertisers and publishers across the ecosystem are about to find themselves thrust back into a world of first principle advertising via tried-and-true methods like contextual targeting. The practice of ensuring that advertisements appear next to content that’s context-appropriate has been out of fashion for some time, but it will be one of the most effective methods for audience segmentation in a post-cookie world.

Moreover, for too long advertisers have known their consumers as an abstract field of data points devoid of real humanity. Performance marketers, especially those who have long relied on direct correlations between media spend and conversions, are likely to have a difficult time adjusting to a world with less concrete attribution data.

Local-market advertisers and media companies that don’t have the deep pools of data and expertise as their national counterparts will need the help of technology in order to make the smaller margins on their media spends economically justifiable. Part of this could mean employing agencies with local-market expertise to help run complicated campaigns and using workflow automation software to make labor-intensive processes more efficient.

In the end, the companies that flourish in the post-cookie advertising world will be the ones that thoughtfully leverage their best resources and maximize the value of their data and relationships wherever possible. By anticipating the post-cookie world now, advertisers and publishers can be prepared for what’s to come.

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