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As the Browser Cookie Crumbles…

Like Mark Twain’s claim that the news of his death was greatly exaggerated, the news of the browser cookie’s death might also have been a little premature, but the cookie’s demise, like the Twain claim, is destined to be fulfilled and whether it’s within a year, a two or three, it cannot be stopped.

Whether we like it or not, the cookiepocalypse is upon us and it threatens to upend brand marketing as we know it. The browser cookie is headed to oblivion for a multitude of reasons, mostly because it’s incompatible with the push for privacy being embraced by brands and governments alike. However, this push for privacy isn’t something to fear. Rather, it’s an opportunity brands should embrace. Browser cookies aren’t always the best tools for marketers to use to connect with their customers, let alone to build long-term customer relationships.

A Cookieless Future

The future doesn’t look bright for the browser cookie. Google’s Chrome browser won’t support third-party cookies beyond 2023. According to 9to5Mac, Apple’s iPhone iOS 15 will no longer default to ‘Apple personalized ads enabled’ and users will be asked whether they want them to be enabled. Apple’s Safari browser and Mail service will also block brands from tracking pixels and/or IP addresses.

Even China, a country not known for its strict data privacy laws, is evolving with the times. “Securing user data is an important step to retain consumer confidence in platforms that have become everyday tools for many people,” reports Jiaxing Li of KrAsia. Tencent, the owner of the Middle Kingdom’s ubiquitous WeChat superapp, has established an independent oversight board to protect personal privacy.

Skeptics and doomsayers warn these developments presage a complete disruption in advertising, but the cries that we’re facing a devastating “cookiepocalypse” that will make digital marketing impossible might be overblown. “As an industry, we are transitioning away from opaque consumer data collection and usage and toward a choice-driven, transparent, and privacy-friendly future,” said Fatemeh Khatibloo, Joanna O’Connell, and Tina Moffett, of Forrester. The cookie browser situation should be viewed in the larger context of the moment, the Forrester trio contends, arguing that there are plenty of opportunities for brands to build better CRM and personalization marketing systems. AI, with all its personalization capabilities, is here to help.

Millisecond-paced Decisioning

The cookie’s demise, as Adobe warns, is uncharted territory for every business; there is no playbook on how to move forward. In general, Adobe argues marketing and advertising are now facing the following four hurdles:

  1. Restrictive privacy laws.
  2. Browser and operating system restrictions on privacy and data collection.
  3. Consumer adopting privacy tools and employing privacy-protecting behaviors.
  4. The ubiquitous walled gardens of customer data like Amazon, Facebook, WhatsApp, Snapchat, and Google.

Forrester refers to these four headwinds as “data deprecation”, believing these issues will make it increasingly “difficult for marketers and advertisers to collect and activate consumer data at scale.” This is a problem that will become more acute as the cookiepocalypse approaches.

Adobe suggests companies start small, understand their first-party data assets, and test out scenarios while the third-party cookie is around. “Brands must restructure their existing customer experiences around millisecond-paced decisions, that align each individual with the right message and the right moment,” argues Adobe.

In his article Top tips: The new reality of addressability, Florian Lichtwald recommends the following six types of marketing that will help brands succeed beyond the cookie, including:

  1. Contextual targeting: Website advertising that is relevant to the interests, characteristics, and demographics of a brand’s targeted audience.
  2. Cohort-based: Marketing to people with similar browsing habits to a targeted audience who remains anonymous to the advertiser.
  3. Probabilistic: Utilizing a user’s metadata to build a targetable profile.
  4. Authenticated users: Utilizing ‘premium’ audience members who have authenticated themselves on a publisher’s website.
  5. Walled garden social networks: Building an audience on Facebook, WhatsApp, WeChat, Snapchat, Instagram, LinkedIn, or other similar sites.
  6. First-party data: Utilizing this kind of data, brands can create their own walled gardens.

For Lichtwald, first-party data should be recognized as the most reliable and highest quality data a company has, while contextual advertising would be considered data of the lowest quality but data that had the most potential to scale. Admittedly, first-party data can be anything but high-quality. As an aside, I’ve worked with many a client who thought a marketing automation system was the last piece of their personalization puzzle and, once they turned it on, they’d be seeing substantial marketing campaign lift. The reality was they needed to get their data house in order before seeing any kind of lift in their marketing. “Junk in, Junk out” goes the analyst’s lament. It’s a truism that must be fixed before any substantial marketing lift can be attained.

Publishers can use their first-party data to create their own walled gardens, with their high-quality authenticated data, contends Lichtwald. This gives “advertisers a new means of high-accuracy addressability in a cookieless future.” This is why so many businesses are frantically building customer data platforms, sophisticated CRM systems, as well as multichannel marketing platforms right now. Brands are realizing first-party data is what can separate them from their competitors. It’s also a powerful advantage that can build up over time as well as concretizes their customer relationship.

Contextual Advertising

In his article Kargo reinvents advertising with AI-driven contextual targeting, Lexi Soberanis claims, “Contextual advertising is nothing new. From newspaper and magazine display ads to TV and web page placements, contextual ads have matched brand messaging to relevant content for decades. But today’s advancements in big data, automation and artificial intelligence have amplified the power of contextual advertising.”

Kargo, an international ad technology company, utilizes IBM Watson to deliver contextual ad campaigns safely and securely to smartphone users. Its technology can refine contextual signals as well as compile and cluster data by a customer’s interests, habits, and as well as any challenges he or she might be facing, explains Soberanis. This allows Kargo to obtain a deep understanding of a reader, which it uses to build relevant ad experiences. This helps with the value exchange as relevant brand messages can be aligned with all adjacent stories, claims Soberanis.

“Kargo creates an actionable, first-party data set to inform contextual advertising decisions by analyzing publisher web page content and applying keyword targeting research, sentiment analysis and other analytical tools,” says Soberanis. Using Kargo, publishers and advertisers can circumvent external vendors.

Providing relevant ads at scale isn’t easy as it requires deep natural language understanding expertise, contends Soberanis. However, it is worth it as it can produce some rather unexpected and unintuitive results. For example, an analysis of the data might show that people who read about the Olympics tend to spend a lot on pet care. Armed with this knowledge, “Kargo can approach a pet food client with a contextual advertising plan to target pet owners on Olympics-related content,” adds Soberanis.

“Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital,” said business professor and economist Aaron Levenstein. These kinds of insights are far beyond the analytical capabilities of man, but they are easily within the reach of AI. By combining data from IBM Watson with its own data capabilities and then augmenting it with key data partnership capabilities, Kargo built a new behavioral advertising solution that could combine web user data from people with similar interests, says Soberanis.

Watson’s sentiment analysis capabilities also helped Kargo trial many different types of creative assets, including some with distinctive emotional content. Kargo’s team found results varied substantially between “happy” and “serious” tones. These tests allowed Kargo to optimize the creative content, which sometimes doubled an ad’s performance, notes Soberanis.

As the Cookie Crumbles…

Whether we like it or not, the cookiepocalypse is upon us. The browser cookie’s demise, like the claim about Twain’s death that eventually came true, will unquestionably arrive. Today, businesses need to prepare for this eventuality. “In the midst of chaos, there is also opportunity,” said Sun Tzu and it’s a quote that couples well with his other quote about opportunities — “that they multiply as they are seized.”

The end of the third-party cookie is definitely a challenge for the ad tech industry, but the adoption of better technology provides data-oriented innovators an opportunity to create marketing environments that are both less intrusive and more relevant to a digital advertising audience, contends Soberanis.

Companies that choose to recognize the so-called cookiepocalypse will be able to weather the approaching marketing disruption best. Those brands who ignore it might find what crumbles is not just their customer base and CRM lists but maybe even their entire raison d’être.

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Product AI is a magazine that covers AI product/project management, AI business cases and reference architectures. We invite product experts and solution architects to share their knowledge here.

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Andrew W. Pearson

Andrew W. Pearson

Andrew Pearson is the MD of Intelligencia, a software consulting company. Speaker, author, columnist, Pearson writes about IT issues like AI, CI, and analytics.

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