Everything you need to know about the future of cookieless advertising.
Due to increased consumer privacy concerns and data regulations regarding consumer privacy, the advertising industry is shifting towards “cookieless advertising.” In this blog, I will be discussing the concept of cookieless advertising and its implications on digital marketers.
Firstly, what’s a cookie?
In order to better understand cookieless advertising, it is important to understand what a cookie is. A cookie is a text file with data that contains personal identifiers of consumers. To describe how this works, a company’s website is programmed to place a cookie in the browsers of the consumers who visit their website. When the consumers proceed to visit other websites, they continue to see ads for that company. There are different types of cookies. First-party cookies are created by the same website a consumer is visiting, such as language preferences, usernames, and products added to shopping carts. Third-party cookies are created by a domain other than the one the consumer is visiting. They are used specifically for marketing and advertising purposes, such as monitoring navigation between various websites and directing retargeting ads (such as the example described above).
In cookieless advertising, third-party cookies would not be used.
The newest and most prevalent method digital advertisers are switching to is called contextual advertising. In this method, rather than depending on cookies or behavioral indicators to distribute ads, insights would be extracted from the context of the ad to create messaging that resonates with consumers. Context can provide valuable information about a consumer’s interest. This works by using AI, machine learning, and predictive advertising tools to analyze text, speech, imagery, and geolocation. This makes it possible to create a highly personalized experience, ensuring the placement of the ad is timely, relevant, and of interest.
The advertising industry is moving toward cookieless advertising due to increasing concerns about privacy. As technology has continued to advance, our entire environment collects and analyzes data about us. Cookieless advertising can change the perception that skeptical internet users hold about the online marketing industry because it will force brands and companies to be transparent about how data is collected and used. Cookieless advertising would allow consumers to have more control over their personal data.
A long-term implication big tech corporations will deal with after implementing cookieless advertising is the need to adapt to alternative methods and entirely reshape their digital marketing strategies. Without the ability to rely on third-party data, the data will need to be collected directly from consumers. Businesses will be forced to be more transparent, and share how and why they want to collect consumer data.
Personally, I am all for cookieless advertising. Like most other people, I value privacy and there are details about my life that I would not want to be broadcasted into the world. I am hopeful that the online marketing industry is trending in the overall more ethical direction to retain the trust of consumers, however, that is not an easy road. As Gerd Leonhard stated in his TED Talk, Digital Ethics and the Future of Humans in a Connected World, machines will soon have similar or vaster intelligence than people, so what will happen to ethics and beliefs? Technology has limitless potential and everything is being digitized and automated. Cookieless advertising is a good first step to a more ethical direction, especially when consumers are increasingly losing trust in online content as they have greater awareness of marketing tactics. This is a driving force for companies to evolve and change their strategies.
With the shift to cookieless advertising, there will be a monumental change in the way digital marketers handle their day-to-day jobs. Digital Marketers are currently used to having volumes of data available to support their decisions, strategies, and guide campaigns. Without the ability to rely on aggregate data providers, digital marketers will need to clean their first-party data and improve their customer engagement strategies, specifically as it relates to segmentation and targeting. While the shift may be challenging, in the long run, cookieless targeting has many benefits. These include reaching consumers in the right frame of mind, the ability to target niche audiences, receive real-time metrics, and build brand affinity.
Finally, users can expect an increased level of privacy protection. The most important benefit of cookieless advertising is improved data privacy. They will receive less aggressive marketing from brands they engage with, and have control over when they provide personal information. Lastly, there will be a positive relationship shift between brands and consumers since delivering a more personalized experience will be prioritized.
Written by Kimberly O’Hanlon
Blog for MRKT584: Digital Marketing Platforms
Instructor: Nikki Brown
May 6th, 2022
References:
“Cookieless.” Adobe Experience Cloud. https://business.adobe.com/glossary/cookieless.html
“Cookieless Advertising: What It Is and How to Prepare for a Cookieless Future | IBM.” IBM Watson Advertising. 12 May 2021. https://www.ibm.com/watson-advertising/thought-leadership/cookieless-targeting-what-it-is
Hynes, Erin. “4 Reasons to Bake Cookieless Targeting Into Your Media Plan.” StackAdapt. 11 Mar 2022. https://blog.stackadapt.com/cookieless-targeting
“What is contextual advertising? Everything you need to know.” IBM Watson Advertising. 14 Sept 2021. https://www.ibm.com/watson-advertising/thought-leadership/what-is-contextual-advertisingMaddox, Kate. “The Future of Advertising in a Cookieless World.” CMO Today. Content by Deloitte. 1 Oct 2021. https://deloitte.wsj.com/articles/the-future-of-advertising-in-a-cookieless-world-01633113320
