Wednesday, November 30, 2022

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    Third-party cookies: the blind spot you’re not checking

    A critical component of adapting to the cookieless future entails evaluating demand-side platform shortcomings, argues Epsilon’s Mike Feczko. 

    Think back to being a teenager when, a little nervous, you jumped in the driver’s seat of a car for the first time. After the basics – buckling up, adjusting your mirrors, ensuring you have your license – what came next? Checking your blind spot. Always, always check your blind spot.

    It’s not only crucial advice for drivers, but also for businesses. Today’s businesses must know their weak spots, adapt to them accordingly and reevaluate every so often.

    Unfortunately, most marketers today are completely ignoring a major blind spot: third-party cookies.

    There’s a refrain I hear a lot: “We’ll worry about cookie deprecation when it happens. Plus, Google just pushed its timeline back to 2024!” But Google is only half the internet. The remaining 50% – owned by Safari, Firefox, in-app and more – is already cookieless. Safari eliminated third-party cookies in 2017. Firefox in 2019. Apple’s Identifier for Advertiser rules – which introduced new consumer data privacy protections and limitations for advertisers – went into effect in 2021.

    Some three-fourths of marketers today rely solely on third-party cookies for advertising – which cuts them off from reaching the 50% of the internet that is already largely cookieless.

    That’s a pretty big blind spot, if you ask me.

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    An (unknowingly expensive) fender bender just waiting to happen

    No one likes a fender bender. Although they often seem minor, they’re inconvenient and frustrating. What’s more, fixing the damage can actually cost two to three months’ worth of lease payments – on top of the headache of dealing with the insurance company and the body shop.

    Similarly, while it may not seem like a big deal at first, there are large financial and intangible costs associated with ignoring half the internet when advertising.

    Wasted, unmeasurable ad spend

    How third-party cookies impact a brand’s advertising ultimately comes down to the organization’s demand-side platform (DSP). DSPs that rely on third-party cookies for identity cannot recognize unauthenticated consumers on cookieless environments. While they can see a bid request, they lack any insight into that person’s demographics, interests or browsing habits.

    As a result, DSPs can serve only generic, contextual ads in these instances. Contextual is a great tool for upper-funnel use cases, but if a brand’s marketing approach is tied to outcomes, then this is inefficient and wasted ad dollars.

    Furthermore, while these DSPs can count clicks and impressions of ads from unauthenticated consumers, they cannot measure business outcomes such as purchases and sign-ups. Without third-party cookies, they don’t know who saw the ad and so can’t connect it to a conversion. How can businesses calculate ROI based on that?

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    Incomplete customer experience

    On top of paying for inefficient targeting, marketers also deliver an inferior customer journey if their DSP depends on third-party cookies.

    The real-time levers required to ensure a consistent experience – personalization, frequency capping, suppression and more – generally require identification. For example, when a marketer recognizes a consumer across browsers, it’s possible to tally the number of times they’ve seen an ad for the brand and limit it to prevent fatigue. Without recognition, marketers can’t count the ads shown and the consumer is at risk of seeing the same, impersonal ad – potentially an infinite number of times.

    Up to 65% of consumers report they have moved to a competitor after a poor digital experience, per research from Verint. If an organization’s DSP is not ensuring personalized, consistent journeys across all browsers, the brand is putting its goodwill at risk.

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    Missed opportunities

    Finally, marketers are leaving conversion opportunities on the table if they are not utilizing cookieless environments for one-to-one marketing.

    A recent internal analysis of Epsilon retargeting campaigns across clients showed that, on average, 22% of conversions were attributed to impressions served on Safari. Cookieless browsers cannot remain a blind spot if marketers want the most effective ROI for their budget.

    So, how can this blind spot be fixed?

    The best thing to do is to find an advertising partner that can recognize and reach consumers across the whole internet – not just in environments with third-party cookies.

    The key is a robust identity solution that leverages both offline data signals such as phone number, home address or email, as well as online data signals such as device ID and IP address. The greater the number of data points, the more accurate the relationship with that individual person and the greater the likelihood of recognizing them across all digital environments – ultimately patching up that blind spot.

    Matt Feczko is vice-president of product management at Epsilon. 

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