First-Party Data, the End of Third-Party Cookies and the Future of Targeting

The NAB commissioned a study on the depreciation of cookies suggesting that broadcasters could see annual losses of 21 billion That39s a number that would get anyone39s attention But is it inevitable There39s still much that has to play out and many unanswered questionsWith that in mind Marketron recently interviewed Katy Sokolowski lead associate account director at The Trade Desk who gave us great insights into the history of cookies the future of firstparty data and what39s next for targetingWhat Are Cookies Where Did They Originate and How Are They UsedFirst Katy gave us an important history lesson on thirdparty cookies quotThe cookie was developed in the 3990s by Lou Montulli for ecommerce usequot she said quotIf a customer went to a website and put products in their shopping cart they could return to the website and the items would still be therequotFirstparty cookies on websites still offer this convenience for online shoppers but the cookie grew into something it was never intended for targeting for digital advertising quotThe advertising ecosystem caught wind of this and started to leverage it in a much different format which became thirdparty cookiesquot Katy explainedThe thirdparty cookie that Google plans to end and other technology companies already have is the script in a browser from a website that39s not the one you39re visiting which includes thirdparty advertising platforms quotThe way it39s been used for advertising is twofoldquot she noted quotWebsites place a cookie on a browser and use that identifier to target you later called retargeting or to track whether you39ve created an action which is called conversion trackingquotWhy Is Google Ending ThirdParty CookiesGoogle39s main message about the deprecation focuses on consumer privacy Katy expanded on possible intent quotThere are benefits to cookies but the technology is pretty archaicquot she said quotA cookie in general is inefficient at understanding who a consumer is because different cookies are placed on each browser and devicequotThe advertising industry recognizes these issues Katy noted that the industry should shift away from cookies for both reasons to be more consumer and privacycentric and more effective and efficient in targetingWith cookies soon fading from the ecosystem the question now is what39s next Katy offered some key insights on this focusing on an authenticated InternetAuthenticated Identifiers More Effective and PrivacyCentricTo prepare for what39s next The Trade Desk has developed Unified ID 20 UID2 quotUnified ID 20 is based on an email address or phone number converted into hashed salted identifiers which means anonymized and securedquot Katy explainedUID2 is an open source identifier not owned by The Trade Desk which seeks to benefit the entire ecosystem by making advertising more relevant and giving consumers transparency Katy shared that The Trade Desk is creating a consumer privacy portal to give individuals more controlSo how can innovations and approaches to targeting prevent the losses discussed in the NAB reportThirdParty Cookie Death Consequences and How to Shift ForwardThe concern for those lost billions is understandable but every seller of digital advertising and company that uses it is in the same situation The shift and how quickly sellers can pivot will matterquotSome thirdparty data providers have only built their data segments off cookiesquot Katy said quotA lot of those data providers are now changing their data aggregation strategies to shift toward a futuristic identifier like UID2 that authenticates interaction with the consumer They39ll be able to track data assets and build audience profiles for targeting much more effectivelyquotThe second part of the solution is firstparty data which is information a business collects directly from its customers and owns Katy shared how this data can have tremendous value in the advertising ecosystem quotThese data sets can be a starting point for advertising that you can onboard to a platform for retargeting consumersquot she said quotYou could also build a lookalike model to reach consumers like those customersquotAccess to firstparty data isn39t plentiful for many advertisers but it39s not necessarily because consumers won39t give it away A global study found that 77 of consumers are willing to provide their email addresses for more personalized experiences Businesses can start their firstparty data collection simply by askingAdvertisers may not be comfortable sharing this but other opportunities exist quotYou can build effective marketing strategies without firstparty data by focusing on geolocation and contextual targeting which will stay the same in a cookieless futurequot Katy said quotChannels like connected TV are already not cookiebasedquotThe biggest takeaway from our discussion with Katy is that things are not as grim as some of the headlines Advertising platforms are innovating and investing in a new era of targeting that will be much more accurate than cookies Focusing on authenticated identifiers and firstparty data will drive better experiences for media companies advertisers and consumersThe new direction loses the cookies but the future looks much sweeter with an ecosystem that fosters privacy effectiveness and authenticationThis column was written by Jenny Slade Senior Product Marketing Manager MarketronClick the social buttons to share this content with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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