The Internet — after the cookies crumble

Nandana James | Updated on March 21, 2021

Safe distance: Some companies prefer first-party data management while respecting customer privacy   -  ISTOCK.COM

The future of privacy on the web is being remodelled with the removal of third-party cookies. How are brands adapting to this change?

You know how you do a Google search on a product or place only to be stalked by ads on the same, making your internet life hellish? Such eerie targeting and bombardment could become a thing of the past with Google Chrome sounding the death knell for third-party cookies.

From 2022, says Google, it’s doing away with third-party cookies — parts of codes used by a website’s advertisers to capture one’s browsing history and then serve targeted, personalised ads. Google says this move is to address the mounting privacy concerns and trust erosion surrounding collection of data.

But there is consternation in advertising and marketing circles. As Sanjay Mehta, joint CEO of digital agency Mirum, says, the change may choke off the economic oxygen from advertising that startups and emerging companies need to survive. It would be hard to imagine how advertising on the web could be relevant, and accurately measured, without third-party cookies, he says. It’s pertinent to point out that Google Chrome owns a lion’s share — over 80 per cent — of the web browsing market in India.

Agencies and ad-tech providers who have mastered third-party data will lose their privileged position in this new world, says Mehta.

Google’s decision to phase out third-party cookies to remodel the future of privacy on the web will most likely remodel the future of the online advertising industry as well, says Shashank Srivastava, Executive Director (Marketing and Sales), Maruti Suzuki India. For years, marketers have relied on third-party cookies for behavioural targeting, re-targeting and data-driven advertising, he points out.

Taking direct control

However, it would be wrong to construe this as the end of targeted advertising, as the bastion of first-party cookies still stands tall. First-party cookies, stored by the website or domain one is visiting, will now become the holy grail of advertisers.

“Everybody should try and get as much first-party data as they can. From the advertisers’ perspective, the more direct control or direct relationship they have with consumers, the more they will be independent of distribution platforms like Google, Facebook, and Amazon,” explains Gautam Mehra, Chief Data and Product Officer – Dentsu Asia Pacific, and CEO – Dentsu Programmatic – South Asia.

Already many like Maruti Suzuki have set this in motion. The auto giant has on-boarded a Customer Data Platform for first-party data management while respecting customer privacy. “Internally, we have developed SVOC (single view of customer) to guide our marketing efforts as per user needs. Also, proactively, we are working towards consent management. App ecosystem is one of the ways we can build meaningful relationships with customers,” says Srivastava.

Second-party data tie-ups with publishers can be leveraged for marketing, and advertisers can look at placing apps at the centre of their digital strategy, he adds. “This can help use the iPhone’s IDFA (identifiers for advertisers) and Android’s Advertising ID for advertising and re-targeting. Certain ad-tech companies have recently launched identity solutions based on unique identifiers built from multiple inputs (web, mobile, customer data),” Srivastava explains.

At advertising agency Dentsu, cookie-less strategies have been in the works for the past four years, says Mehra, pointing to their product Dentsu Marketing Cloud. “This is based on cohorts, and it does contextual advertising, and has no implication with the new laws coming up. It only takes the first-party data of the client into consideration and is privacy compliant.”

All over the globe, privacy regulations are coming into effect. The EU has General Data Protection Regulation and in the US there is the California Consumer Privacy Act. India is also heading towards that direction with the Privacy Data Protection bill introduced in 2019.

Small players will suffer

Jessie Paul, CEO, Paul Writer, a B2B marketing agency, feels that the change won’t be as cataclysmic as people are making it out to be. While tech behemoths like Google and Facebook already have huge repositories of user data, it’s the small ad-tech players and publishers who will face the heat, she says, owing to their reliance on third-party cookies.

Indeed, big companies have already started adopting solutions like fingerprinting and graph identity providers for effective marketing.

While the larger ecosystem is working on creating alternative identifiers, smaller publishers, too, need to get their first-party data strategy right, says Dentsu’s Mehra. “Without cookies, you are looking at consumers having to sign-in for content... it’s hard to imagine that an average user would keep giving their email address and creating logins for every website one visits.”

The alternatives

Google Chrome has offered alternatives such as the Privacy Sandbox technology for interest-based advertising (FLoC), where groups of people with common interests could replace individual identifiers. This approach, Google says, effectively hides individuals “in the crowd” and uses on-device processing to keep a person’s web history private on the browser. Google says its tests of FLoC show that advertisers can expect at least 95 per cent of conversions per dollar spent when compared to cookie-based advertising.

The removal of third-party cookies and its replacement by Privacy Sandbox is a win-win for all, says Vivek Srivatsa, Head, Marketing, Passenger Vehicles Business Unit, Tata Motors, as it builds innovations that shield anonymity while delivering better results for advertisers. Tata Motors is relooking its strategy to target a cohort instead of personal identifiers, he says.

“Rather than looking at phasing out third-party cookies as a setback, we would like to look at this step as a positive change for the future,” says Srivatsa.

Indeed, as Mirum’s Mehta points out, marketers will focus on building trust and delivering such a great user experience that the customer will opt in. He also feels that circulating content in email newsletters and email-based ads, launching targeted ads on social media, testing contact list re-targeting could be alternatives.

Paul emphasises the importance of contextual advertising. “As a consumer, I am not going to click on an ad that is not relevant to me. So, you will have to find ways to make it relevant to me.”

As things go, the big and powerful players will probably become more powerful. “I think the takeaway is that local marketers will have to work harder. Will smaller sites and advertisers lose out? Yes, they will. But will the customer benefit? That also is true,” Paul sums up.

Published on March 21, 2021

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