Death to the Cookie: What Comes Next?

Google announced that it will be phasing out cookies by 2022, which incited obvious concerns for advertisers and brands about the ability to remarket to loyal or returning buyers — or to consistently measure impressions frequency for awareness and branding campaigns. The announcement, however, also provides an opportunity for marketers to develop new strategic and creative ways to remarket to their audience.

“When Google phases out cookies, it may lead to more focus on 2-way communications in ad campaigns; creating surveys or some other engagement tool and outlet that will require site converters to provide information about themselves, even if it is generic and focuses on demographics, preferences, or interests,” says Ovie Oghenekevbe, Creative Digital Agency’s Media Operations Specialist.

“It’s definitely going to disrupt the the role of programmatic in media planning,” says Kevin Almeida, Managing Director at CDA. “As an industry, we’ve kind of collectively gotten addicted to having this data readily available. It’s important not just for advertisers, but for publishers to start strategizing, learning, and concept testing today — and not be reactive for when the shift comes and have the carpet yanked out from under them. Luckily, there are a leaders on both sides of the equation doing just that right now.”

It’s What the People Want

Alternatives to the cookie will need to consider the reason why they’re being phased out in the first place: consumer privacy concerns. From the consumer’s perspective, people feel as if they are being watched and cannot keep their online activity private. While this has become an everyday aspect of life, consumers increasingly want to exercise control over their personal information.

For the first time ever, consumers now view data privacy as a competitive differentiator for online services. With 79% of Americans concerned about how their data is being used by companies (which lead to California being the first US state to pass a data privacy law), alleviating data privacy concerns is a must in today’s digital world. But there’s serious caveat to this: consumers are willing to give up their privacy for convenience.

It won’t take long for advertisers to adopt alternatives to the cookie. “Big data is here to stay,” says Oghenekevbe. “I don’t believe phasing out cookies completely is plausible, but they may be renamed/rebranded with something functionally similar. For instance, Flash/Macromedia was phased out and replaced with HTML5/Bootstrap.”

In terms of alternatives, “Pixel data is an alternative or a work-around but still depends on Cookie traffic. Also, I believe an alternative to losing Cookie data would be an uptick in temporarily storing IP addresses. I’m not sure how this will be conducted, but it should have the same parameters as Cookie tracking and would be less likely to become lost because every device has only one unique IP Address.”

IP addresses combined with user IDs has long been considered an alternative. One of cookies’ major shortcomings is the fact that they cannot track activity between different devices, so if a user were to hop between their laptop and mobile device, the continuity of consumer experience would be lost. An IP/UID approach wouldn’t have the same issue.

Another trend has been public disclosure of advertising technology, like Apple’s iOS 14 update which required users to opt-in to its Consumer Identifier for Advertisers (IDFA). While incredibly useful for tracking in-app behavior for advertisers, Apple decided in favor of consumers to give them the option to opt-in.

The transition away from the cookie will change things on an operational and strategic level, but it shouldn’t drive advertisers away from digital media, says Oghenekevbe. “I don’t see the digital marketing industry losing steam any time soon. If anything, we will likely see more big data companies provide exclusive insights into consumers and creative ways to stand out amongst the competition. Also, new ad formats will continue to become more and more immersive. We’ll likely see many technological advances that will track and feed the network’s extensive insights.”