DMPs in a post third-party cookie world
- 26 April, 2022 09:06
Online tracking using third-party cookies has long been one of the more questionable aspects of digital advertising.
Today, the ‘nay’ camp is ascendent, as demonstrated by the effective abandonment of support third-party cookies by major technology providers. The most notable has been Google, which will stop supporting use of cookies in its popular Chrome browser by the end of 2023. Apple made a similar call in 2020 to block cookies by default in its Safari browser.
These changes have forced a rethink of digital ad strategies, especially those relating to acquisition and retargeting. They're also driving significant changes to the positioning of data management platforms (DMPs) used to manage digital advertising efforts.
According to Forrester Research New York-based vice president and principal analyst, Joanna O’Connell, the rise in DMP adoption over the past decade flowed from their ability to enable advertisers to centrally manage anonymous digital audiences in a clear way and activate them, such as through demand-side platforms (DSPs), from a single place.
“When you lose third-party cookies, you lose the currency of the digital ad industry and the foundation of all the behavioural targeting built up since the dawn of time,” O’Connell tells CMO. “It is a huge deal. That traditional infrastructure of the DMP doesn’t work very well anymore, nor does the DMP really have a way to communicate with the world around it.”
These perspectives are shared by analytics and audience measurement company, Quantcast. Its APAC managing director, Andrew Double, agrees the role of the DMP is likely to change significantly as the technology becomes integrated into CDPs to form one solution that combines first-party data, the consent to use that data, and the platform to activate against it. DMPs per se will become the online activation arm.
“The first part of this is acknowledging a gap has always existed in the way marketers have attributed sales-to-media spend using third-party cookies,” Double says. “Cookies were built to function as the short-term memory system of a browser, rather than tracking the activity of that browser across the Internet in perpetuity.”
The writing has been on the wall for third-party cookies for some time. Just look at the actions of technology vendors and the emergence of regulatory regimes such as GDPR in Europe. As a result, DMP providers have had time to make adjustments to their platforms to ensure relevance and utility for users.
For Adobe, that has meant focusing on the profile and the identity architecture sitting underneath its DMP offering.
“Our DMP was already in a position where it was addressing more than just third-party data use anyway,” says Adobe APAC lead for product strategy and marketing for data management, identity, and privacy, Gabbi Stubbs.
This kind of functionality is more akin to a first-party data focused customer data platform (CDP). In Adobe’s case, however, Stubbs says there is no need to rip and replace one system in favour of another.
“The reality is the third-party proposition wasn’t necessarily the most ideal one,” Stubbs says. “If you are a brand, you should be considering how you own and operationalise your own data and maximise the trusted relationships you have with your customers directly, as opposed to relying on a third party or a walled garden to enable that for you.
“It is a seismic change, but it is a change for good in terms of how you build out that trust and how you own your own future.”
Yet Stubbs admits many marketers are not confident about making such a transition. Adobe’s research found the level of confidence among marketers fell from 37 per cent at the end of 2020 to 33 per cent a year later.
“If you are not well along your way to starting that first-party data strategy now, and Google does hold true to its timelines and you are reliant on those walled gardens, you will find yourself beholden to those outcomes and be on the back foot,” Stubbs says. “The other scenario is that it is more advantageous to move early, because you will have those relationships and the muscle to be able to adapt to whatever other changes might come.”
Other technology suppliers tell a similar story. Oracle’s DMP offering was built through its BlueKai acquisition in 2014 and came with a heavy reliance on third-party cookies. BlueKai once boasted native integration to the largest third-party data source around, with more than 15 million sites represented.
According to Oracle APAC director of strategy for customer experience, Lisa Collins, brands were essentially using third-party cookies as a proxy for an identity that they could target. As the industry evolves to embrace alternative identity standards, such as hashed emails, PII-match, segment-level data activation, Oracle Advertising and CX has evolved to offer a connected suite of applications that provide alternatives for customers.
“This starts with placing more emphasis on first- and second-party data strategies to drive personalisation across the entire customer journey,” Collins says. “With first-party data as the cornerstone, we’re seeing more brands investing in a customer data platform that provides a single, unified customer view across advertising, marketing, sales and service.”
However, these solutions do not fill all the gaps that have emerged because of the disappearance of third-party cookies - especially in relation to activities such as acquisition.
Second-party data partnerships
One solution for brands that lack access to first-party data is to invest in second-party data sharing partnerships. This has been good news for data aggregators such as Flybuys and its Unpacked offering.
“Many businesses don’t have a lot of customer data or a direct relationship with the customer – they are selling through supermarkets. It is not as feasible for all businesses to be collecting the large volume of first-party data you might expect,” says FlyBuys product manager for agencies and brands, Natalie Minter.
The result is an increased interest in services that enable prospecting activity that relies on utilising other people’s authenticated consent-based data sets shared one-to-one. Minter says what makes this solution acceptable in ways third-party cookies were not is the different perspective they bring to consent.
“A lot of the issues we have seen around cookies and privacy is that it all happens in the background. There is no transparency around what data has been collected, and how it is being used across the ecosystem,” Minter says. “What we have seen in consent research is that if customers feel they are getting value from a business, then they are happy for data to be shared. So there will continue to be data sharing, but it will be much more in second-party relationships.”
According to O’Connell, increased interest in data sharing is also reflected in the shift in power back to publishers, other owners or so-called walled gardens. In the US, this has led retail media offerings to rapidly rise in prominence, such as Walmart Connect or Target’s retail media network, Roundel.
The digital advertising industry has also been pursuing other strategies, such as The Trade Desk’s creation of the Unified ID 2.0, an open-source framework built from hashed and encrypted email addresses. However, O’Connell is adamant the future will not be based on an alternate form of identity.
Read more: Adtech industry reacts to latest universal ID updates
“Moving to a model where every consumer has a known deterministic identity associated with them is not realistic,” O’Connell argues. “Any time they try to figure out a workaround, it is destined to be shot down in some way. Anything that could be construed by a consumer as intrusive is problematic.
“There will be a subset of consumers who authenticate in a permissioned way, and you’ll be able to talk to those people as individuals. Everything else is going to be abstracted away from this idea of targeting individuals.”
Up next: The fresh take on audiences required; and what the future looks like
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Fresh take on traditional audience ideas
A further development flowing from the loss of third-party cookies is the renewal of interest in older forms of audience building, such as contextual audience building, but using new technologies that provide opportunities for semantic targeting and even moving to predictive targeting.
“There’s a huge volume of solutions marketers haven’t really been forced to contend with, because they have this old notion of how audiences are built they rely so heavily on,” O’Connell says.
According to Oracle’s Collins, more advertisers are leveraging contextual intelligence solutions allowing for targeting by the content, page or video without need for third-party cookies or personal information.
Read more: Is contextual marketing the answer to the end of third-party cookies?
But despite the changes, the current approach for many appears to be one of business as usual. Programmatic marketing agency MiQ’s operations officer, Damian Healy, is surprised at how little demand there has been to get in front of the changes. Even for his own business, he says the changes have not been significant.
“You could think that [being programmatic] means we are entirely reliant on cookies,” Healy says. “But the beauty of programmatic these days is it is omnichannel. I am delivering huge amounts of overall volume in BVOD now, and all of that is based on set top box IDs and smart TV IDs. It’s not dependent on cookies at all. We can use that data to build out optimised reach for advertisers.
“When I was looking at this initially, it seemed an insurmountable mountain. But once we got into it, we saw there are lot of things we can do without cookies.”
Healy also noted a swing back to search, especially for acquisition for performance advertisers.
“Search is a click-based medium, and when you click on to an advertiser’s website you can use first-party cookies at that point,” Healy says. “You know the click came from Google, you know the keyword, you know it landed on your website. You’re then in first-party cookie territory to tell whether they bought something or not.”
In addition, Healy is keeping an eye on other initiatives coming out of Google, including its FLEDGE privacy sandbox proposal. This browser-based technology is being pitched for next-gen remarketing and custom audience use cases but will not be able to be used by third parties to track user browsing behaviour across sites.
Read more: Google’s plans to replace cookies with Topics API dubbed grossly insufficient
“There are some pretty strong reasons to believe there are going to be technology-based and potentially browser-based solutions that are going to get us past some of the sticking points,” Healy says.
For the short term at least, the job for marketers when it comes to campaign planning is likely to be more difficult than it once was.
“With cookies going away, your ability to use mobile IDs fragmented as well, and all the new channels like digital out-of-home and set to boxes and over-the-top devices, there are so many IDs and devices out there it has become a lot harder,” Healy says. “That is where our identity work comes from.”
With the emphasis inevitably swinging towards greater use of first-party data, Stubbs sees plenty of territory still to be explored around how data might be collected and utilised.
“There is a lot more innovation around how you might extend your first-party data, and brands are becoming significantly more commercially savvy around the value of their own data as well,” Stubbs says. “Pieces that start to become really interesting are things like micropayments and getting under the hood of what value exchange looks like.
“What might it look like to get them in the door without having to hand over all of their data at the start, and then build up that relationship through a value exchange? You will start to see massive convergence around content and data, and elements where it brings in commerce. That will be one of the interesting growth areas.”
So while the industry might be shaken up in terms of changes to data and the tools that manage it, O’Connell says it’s a good time to closely examine what consumers actually want.
“A first-party data strategy means you have to have something useful to the consumer they want to interact with,” O’Connell says. “It is really about customer experience and content strategy. You need to think all about those things.”
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