Everyone’s Asking Us About 3rd Party Cookies. Here’s My Take.

It’s not exactly breaking news: Google will put a stop to 3rd party cookies in Chrome starting (supposedly) in 2022. 

The news was out just before most headlines turned to COVID-19. 

Google first made the announcement in January 2020, and had been working toward a more private web well before that. 

(In an ironic twist, the search giant wrote that blocking 3rd party cookies “jeopardizes the future of the vibrant web” nearly two years ago, now.) 

Now that the deadline is getting closer, I’m here to answer the question concerned marketers have been asking since January 2020: what does this mean for me?

Before going any further, I want to make one thing clear: the end of 3rd party cookies in Chrome isn’t the end of targeted advertising — not by a long shot. 

Sara Morrison at Vox puts it in consumer terms: “It doesn’t mean that Google will stop collecting your data, and it doesn’t mean the company will stop using your data to target ads.”

But what does this mean for the marketer? Is this truly a privacy move from the goodness of Google’s heart, or is it a consolidation play? 

For the second question: I’ll leave that one up to you (sorry.) 

Re: the first question: this spells change for B2C and B2B marketers everywhere. 

Yes, marketers will still retain the ability to target ads and serve relevant content. 

Instead of spelling out doom and gloom, I want to walk you through your best options for targeted marketing in 2021 and into the future. 

The Internet runs on advertising. We’re going to figure this out.

All this might not be as new as you think — and it’s definitely not as scary.

A few things to consider:

  • Chrome isn’t the only browser, and Mozilla and Safari are both there already. Safari started blocking 3rd party cookies as a default in early 2020; Mozilla set up the default a year earlier. (Sure, they have less than a third the market share that Chrome has, but it’s still something). 
  • Rapid responses don’t always pan all the way out. In the wake of the Cambridge Analytica scandal, it looked like Facebook would block account data access for 3rd party apps in response. While they landed on some limitations, did it really impact a developer’s ability to benefit from the ecosystem? 
  • It’s not like we’re backsliding from rocket science to the wheel. 3rd party cookies are going away; the ability to serve a targeted, relevant web experience to users is not going away.

In a phrase: cookies aren’t going away with nothing to replace them. Alternatives are already in place. Actually, there might be too many options in place. Just consider:

  • LiveRamp’s Authenticated Traffic Solution, a two-way approach that gives visitors the ability to authenticate themselves. 
  • Lotame’s Panorama ID, an enriched ID solution designed for the open web. 
  • ID5, a new universal ID solution for publishers and ad tech companies (unlike most other options, this one was created specifically to fill the gap). 
  • Zeotap’s ID+, a proprietary universal ID project from an existing customer intelligence platform. 
  • Consortiums between multiple SSPs and DSPs (one of the earliest is the Advertising ID Consortium). 
  • Guidelines from major professional associations, such as IAB’s ReArc project. Keep an eye on these, as they provide guidelines for getting past 3rd party data altogether. One standout phrase from the recent ReArc report: “First-Party Audiences, now disconnected from other audiences, are one safe bet. With no 1:1 link to advertiser audiences through cookies, IDFAs and the like, this is where seller-defined audiences, contextual signaling, and private marketplaces play their roles.”
  • SWAN.community, from platform supporters like PubMatic and OpenX (it stands for the Secure Web Addressability Network).

All of this is on top of The Trade Desk’s Unified ID 2.0 and Google’s Federated Learning of Cohorts (don’t worry, that’s the main focus below). 

All in all, I see this as more of a ‘speed bump’ along the road to a better, more private and still customized Internet experience. There are already companies (including Metadata, cough) with solutions that don’t rely on 3rd party cookies, as well as many groups working toward a viable replacement. 

Let’s dig into what that looks like.

What are my options?

This isn’t an “ultimate guide” to every single option out there (though, again, I do recommend taking a close look at IAB’s recommendations — they have guidelines that go way beyond the technical aspects). 

But there are two prominent approaches that I think will have the biggest impact on marketing in the next couple of years:

  • Google’s Federated Learning of Cohorts (FLoC). Don’t let the terrible name fool you — Google is reporting 95% of the conversions per dollar spent compared to cookie-based advertising. Based on Google’s wider Privacy Sandbox initiative, which they’ve been developing since at least 2019, FLoC is sure to see the widest adoption due simply to Chrome’s market share and Google’s outsized presence in ad tech. 
  • Unified ID 2.0. Trade out a funky name for a boring one (along with entirely different tech) and you’ll have Unified ID 2.0. It’s The Trade Desk’s take on how to move forward with effective, addressable programmatic advertising online.

WTF is FLoC?

In a phrase, the Federated Learning of Cohorts (FLoC) is an anonymized, interest-based version of cookies for Google to share with advertising partners. 

Here’s how Google defines it: 

“FLoC provides a privacy-preserving mechanism for interest-based ad selection. As a user moves around the web, their browser uses the FLoC algorithm to work out its ‘interest cohort’, which will be the same for thousands of browsers with a similar recent browsing history.” 

How does this approach serve targeted marketing in any meaningful way? Google’s summary is that Chrome recalculates the appropriate cohort periodically, directly on a user’s device. FLoC doesn’t share browsing data with Google’s other ad platforms or with any partners. 

While there was some skepticism toward Google’s claim that cohorts are 95% effective compared to individualized data, others see the move as a kind of influencer. In a write up from Ad Exchanger, Myles Younger (Sr Director at MightyHave) says the efficacy isn’t a surprise. “The idea that 1:1 was the holy grail of digital advertising was always a fallacy,” Younger says. “Cohorts are an obvious and practicable ‘middle ground.’” Zach Edwards, founder at Victory Medium, put it a bit more pragmatically: “Does FLoC somehow reduce competition or suddenly change the shift of ad money going digital?” 

That said, there are a couple of potential drawbacks to wide adoption of FLoC:

1. New security issues could crop up. While the Privacy Sandbox is built to prevent digital fingerprinting, less honest developers could still infer identity through context clues in the cohort approach.

2. The approach runs through an unsupervised algorithm, making it harder to police for bad actors as advertisers start to figure the approach out. 

3. The approach essentially creates a black box for account-based advertising and attribution. While FLoC may work well for consumer advertisers, the anonymized approach may prove difficult for B2B, where you’re more concerned with things like title and company than interests.

And, unsurprisingly, more than a few commentators have noted that FLoC could open the door to more anticompetitive behavior (What’s New in Publishing called it Google’s “black-box intellectual property”). One of the most vocal objections comes from the Electronic Frontier Foundation, a privacy nonprofit — the organization also launched a tool to unveil whether your Chrome browser is in the FLoC trial.

How promising is Unified ID 2.0?

For a company that wants to help brands deliver a more insightful and relevant ad experience, it’s no surprise that The Trade Desk (TDD) put up its own alternative to 3rd party cookies: Unified ID (2.0). 

It’s not exactly all new — as the largest independent DSP with plenty of longstanding programmatic partners, Unified ID simply gives TDD the ability to work with a new universal identifier within an existing ecosystem. 

(Side note: The Trade Desk has handed over the project to Prebid.org, an open source partner, but that doesn’t stop us from thinking about Unified ID as the TDD alternative.) 

None of this would be complete without a little spin: TDD is calling Unified ID an “upgrade” to cookies, and that the tech “preserves the essential value exchange of relevant advertising, while improving consumer controls.”

Here’s the full description of how Unified ID works: 

“When a consumer logs into a website with their email address, an identifier is created based on…an anonymized version of that email. The identifier regularly regenerates itself, ensuring security. At the point of login, the consumer gets to see why the industry wants to create this identifier and understand the value exchange of relevant advertising, in simple terms.”

One of the big long term benefits to Unified ID is that it’s interoperable — it can work with other identifiers, making the scale that much more appealing to advertisers around the world. Of course, this comes with a drawback: making the Unified ID less secure and less anonymized. 

Two potential drawbacks seem to have been addressed proactively: the potential to create just another “walled garden” and handing over the project to Prebid.org, or the lack of scale and ensuring interoperability, for example. But there’s a third: the long term viability of this approach is less than clear. With rapidly evolving regulations and consumer expectations, the vague approach to anonymization may not work in the future. 

Okay, but not all marketers are losing all their data

I’ll tell it to you straight: this change affects B2C marketing organizations a heck of a lot more than B2B marketing orgs.

Or, at least, it’s a problem that’s easier to solve for B2B marketers. 

Why? 

Because in B2B use cases, advertisers may be better served by using data sources that don’t rely on cookies at all — and that doesn’t mean just building out your own treasure trove of first-party data, either. 

The biggest impact of 3rd party cookies going away is the loss of intent data in your marketing strategy. The ability to track individual behaviors and use that for a marketing play will likely no longer be an option.*

*promising cohorts and anonymized identifiers aside

For programmatic ad networks, B2B advertisers will be able to target with similar efficiency. For example, you’ll still be able to serve a relevant white paper (based on industry or business interests) whether you’re using FLoC or a Unified ID. Even though the cohorts and IDs are anonymized, they still give advertisers the ability to target a group with similar interests and experiences. 

For social ads, you’re able to target potential buyers by email address or device ID. 

Platforms like Metadata have mature corporate-to-personal identity solutions that provide even better targeting than 3rd party cookies. 

I say better on purpose: with Metadata, you’re not just blasting your ads and messaging to everyone at a specific account. Instead, you’re laser-targeting only the people at those companies where your ad has relevance. You can’t do this without using cookies on Google.

Using a combination of first- and third-party data, Metadata allows you to more effectively target specific people within your target accounts.

So how does it work with Metadata?

Based on your criteria (i.e. industries, # of employees, annual $, job titles, location, intent, account lists and technographics), we build audiences in Metadata using our corporate-to-personal data graph that resolves your business targeting criteria to a prospect’s personal profile, and then pushes those to the platform. 

For social ads, that’s typically personal email address and mobile device IDs. The social platforms (typically LinkedIn and Facebook) look for an exact 1:1 match against what we uploaded to identify which accounts to serve ads to. With that info, you’re able to serve targeted ads based on first- and third-party data, not 3rd-party cookies. 

How to prepare for the cookieless world

Instead of simply leaning into the alarmist language (primarily coming from ad tech companies serving B2C folks) around cookies, learn the options that will allow you to reach your audience directly.

Again: this isn’t new, and the world isn’t ending tomorrow. 

Google announced it would phase out cookies in January 2020, with a two year timeline. That means we’re looking at the beginning of 2022 for all this to shake out.

FLoC still in the origin trial stage — which has been rolled out to about .5% of Chrome users. 

From there, the feature will slowly be “turned on inside Chrome via the usual process of introducing it into developer builds, then beta, then finally in the shipping version most people use.” 

Unified ID, for its part, is still in the splash-new-partners-around-to-generate-buzz stage. 

I would be 100% unsurprised if there were a 6+ month delay in getting 3rd party cookies alternatives fully rolled out. 

If you like planning ahead, these are our five tips as I get back to doing what I do best (that’s generating revenue, not just leads, btw): 

1. Retargeting on social media is safe, but you might need to update some settings. Facebook will be unaffected, as 1st party data is the default. For LinkedIn advertising, you’ll need to enable a new pixel by heading to Manage Insight Tag under Campaign Manager. Get the full breakdown of LinkedIn’s 2021 pixel update for conversion tracking here

2. Stay focused on your customers’ privacy. Ad tech isn’t exactly a Situation Room type situation, but the way advertisers will be able to connect with their audience is shifting relatively quickly. Make sure you keep up with the conversation — and that you communicate that commitment to your customers. 

3. Consider ads that don’t rely on intent data. Not every version of targeted marketing relies on cookies, as you saw above with Metadata. Take the time to learn how the tools that don’t rely on 3rd party cookies can play into your marketing approach.

4. Land on the alternative that makes the most sense for your brand. One, some or all of these alternatives to 3rd party cookies are going to stick. While I focused on FLoC and Unified ID 2.0, do your homework for each of the alternatives I mentioned above to find the right fit for your marketing efforts. 

5. Focus on establishing as many first-party relationships with your market as possible. Google recommends it, and we recommend it as consumers become hyper-aware of how their information is being used. In a phrase: first-party data will future-proof your advertising efforts. 

Long story, short: if your current marketing approach relies significantly on 3rd party cookies, it’s time to start expanding your horizon.

Being a Marketer Is Hard.

This shouldn’t come as a surprise, but CMOs increasingly have the shortest tenure of all C-Suite executives.

As a marketer, your feet are being held to the fire by growth-obsessed CEOs and their investors, who demand you deliver more while your diva sales team continues to throw temper tantrums over the quality of your work. Every decision you make is scrutinized and needs to be approved by Finance, who requires you to show an ROI justification before they let you spend your own budget. And finally, IT gets to dictate what tools you can and can’t use.

Your work is among the most visible in the org, bringing scrutiny to every tiny mistake. Can you even imagine a world where every product bug, sloppy sales call, or budget error received the same blowback as that one typo in that one email?

The good news: there are technology and vendors who can help you out.

The bad news: there are over 8,000 of them, they are starting to blend together, and they can’t seem to play nicely together. OH! Then there’s those 8,000 SDRs who have you in their 8-12 touch Outreach sequence. (That’s 96,000 cold calls, templated emails and Linkedin requests per year!)

Like I said, being a marketer is hard, which is why when ABM came along in the early 2000s promising a smarter way of doing things, we all lined up.

Let’s be honest.

As marketers, if we had 1 superpower it would be storytelling. Mostly we use our powers for good, but like in the schoolyard game Telephone, sloppy storytelling can also blur the line between fact and fiction. That’s how we find ourselves in a situation where ABM continues to rise and CMO tenure continues to fall.

At its core, ABM is about smarter targeting and execution, but we’ve always done that. Even before the Internet, if you were marketing a financial product you’d place your ad in The Wall Street Journal and not Cosmopolitan. With the rise of digital, we gained access data. We can be more targeted and measure the effectiveness of our activities like never before, as cited in the 1993 Peppers and Rogers book, The One to One Future, which is widely credited with branding Account Based Marketing.

Initially, the results were great. Suddenly we were generating Named Account Lists, forecasting which accounts would be our best customers, and focusing all of our activities around them. The accounts in our target lists had higher ASPs and shorter sales cycles–Success! At long last our impacts were measurable and our efforts were vindicated. Here was tangible evidence ABM worked, so what did we do? We doubled down. Suddenly CMOs were given fat budgets and huge bonuses, we got more decision-making power and autonomy, and everyone lived happily ever after.

Except that didn’t happen. So what went wrong?

Assumptions

As marketers and as an industry, we either made poor assumptions or lost track of where the facts ended and our stories started.

We put all of the largest and best accounts on our named account lists. Of course the largest accounts were going to spend the most, and of course the ones with the most pain were going to buy the fastest. That’s not ABM, that’s just common sense.

Next, we focused on surrounding these accounts with brand-awareness activities. You know the ones I’m talking about: expensive gifts, swanky in-person events, ad spam, and personalized content.

We basically called ‘dibs’ on all the best accounts and took credit any time a deal closed, because we couldn’t measure the impact of all our efforts. Maybe we sourced it, maybe we influenced it, maybe we had no impact at all. Who was to say? All of this activity was supposed to lead to higher revenues and lower CACs (aka Profit), but again it didn’t. So what did we miss?

We’re at a Crossroads

We all know we’re missing a Phase 2. We might blame something else like data cleanliness, product-market fit, attribution, sales, or outside factors like pandemics or competitors, but we’re not the only ones who have noticed something isn’t right.  

In the last few years, the way marketers have been measured and compensated has changed drastically. More and more, I’m hearing that marketers are responsible for a sourced pipeline number, or even revenue. Those vanity metrics like account engagement, lift, and impressions are a thing of the past.

Despite our best intentions, our ABM story outgrew the data and the secret is out. This is why our CEOs are raising the bar. This is why you’re seeing the rise of performance and growth marketing titles over brand. And this is why you’re starting to see a divergence between historically reliable sources like industry analysts and customer review sites.

Most notably, TOPO is starting to advocate for the Double Funnel approach, emphasizing equal parts ABM and Demand Gen. While G2 broke ABM into 8 subcategories, Forrester isn’t adapting to this new reality. In fact, their latest ABM New Wave report still seems to measure ABM on the old vanity metrics and their grid seems to be the exact opposite of what real marketers are saying via G2.

This disconnect is so profound that the CMO of one of our customers, Virtana, took the time to write an article highlighting the tectonic shift B2B marketing is undergoing.

Modern marketers like Scott Leatherman understand the traditional all-in-one ABM tool is already antiquated. It’s slow to implement, hard to execute, and nearly impossible to measure any tangible sourced revenue.

Time matters

Average tenure of a CMO
Photo credit: https://www.b2bnn.com/2019/01/editors-note-b2b-cmos/

CMO tenure is slipping, pandemics are raging, and we live in a culture obsessed with instant gratification. This means immense pressure on marketing leaders to deliver meaningful results right now. Switching a core system like a CRM, MAP or ABM platform can be a huge project, and today requires buy-in from Sales, IT and Finance. At a time when marketers likely have little to no social capital, it’s non-starter. Maybe your budget just got cut or you had to downsize your team, but did your goals change?

It doesn’t matter how insurmountable the odds are–you have to deliver, or you have to start updating your resume. You need to figure out what works best for your business and double down on what needed to happen yesterday.

This is exactly why our customers are so passionate about Metadata. Our automated experimentation delivers these answers, and by the time you’re analyzing these insights your budget has already been shifted to double down on the winner. This new generation of marketers knows what they need (results)—and don’t need (fluff)—from their platforms.

Why It Works

Without having the luxury to build the core tech stack of your dreams, having tools that seamlessly plug and play means you can spend your precious time executing, and less time onboarding and configuring a massive tool. That means ROI in weeks, not months or years.

We lay out a trail to guide your strategy and execution, and then make it very efficient for you to track, pivot, analyze, and test—all the things we need to do as marketers while removing all the friction with experimentation.

That means your team can spend less time on tedious tasks like campaign setup, UTM tagging, and sifting through spreadsheets of data, and more on the value adding activities like understanding your customers, adjusting messaging, or rolling out more effective GTM strategies.

All this to say: with Metadata, you can do with more with less. With demand automation you can deliver leads that will satisfy even the most vocal sales diva, while lowering your CAC for your penny pinching CFO and sourcing more pipeline for your CEO.