Why I love the Cookieless world

Walter Flaat

Chief Data Officer

thought leadership

I love data because it is the best way for us to effectively understand human beings and their needs responsibly. Good marketing then is simply trying to understand people, their needs, and helping to fulfill those. Responsible marketing then, is fulfilling those needs in a way that is good for people, society and the climate. For the good of our people, society, and the sanity of technologists and marketers: I can’t wait for the cookieless world!

Being responsible is a very hard mission if you realize that our marketing infrastructure - a billion-dollar industry - for decades has been held together by happenstance technology. We're serving people tiny invisible images/pixels, that piggyback information onto their devices, as the core of our view of them. No architect, even an inept one, would ever intentionally design an infrastructure like this.

Right at the start of the data collection process, this outdated technology promotes asking people from ambiguous consents; shady data-sharing practices and it really just maintains an archaic infrastructure of identity management. 

The cookieless word will be a reset. It gives us the opportunity to redesign identity management; to put people back in control of their data, while allowing marketers to responsibly understand their needs in a more reliable way. I love it.


Privacy: The cookie as the fall guy

As I stated, cookies are archaic. They tag your device with a unique identifier and through an extremely complex landscape of systems, those identifiers get stitched together to attempt to build an addressable profile of you. Often only consisting of a few data points that lead to sweeping conclusions about you. Not great. Which explains why legislators have focused on them and ‘big tech’ is cracking down on them.

But the tech companies are cracking down on cookies above and beyond the immediate requirements; they essentially declared war on cookies. Why?

First, there’s the honourable reason: we need people to have more control regarding their data through a more reliable marketing architecture; with more governance and rights.

Secondly, because it makes them money. In the last couple of years, some of the biggest players have used cookie privacy risks as a reason to switch to collecting data in their own ‘identity graph’ (a big database where they store all of the information on their logged-in users).

In effect: they’ve moved from anonymous, unstable cookies, that we didn’t know a lot about, to storing much more detailed information about you — tied to your actual identity.  There’s nothing wrong with this — if you give full consent and are aware of what’s happening — though it is a peculiar approach to privacy. 

This is where things get interesting. As Prof. Galloway points out in his excellent “Post Corona: From Crisis to Opportunity,” this reinforces data-monetized business models for the future. Some companies charge premium prices for their products - which preserve privacy. And some will be cheap/free but essentially take their 'payment' in data.

In a post-cookie world. I believe we will see those business models ripple through in the advertiser space. It sets up a 2-speed world.


This will be a 2-speed world: Data-Haves and Data Have-Nots. 

Every up-to-date marketer is aware of the need to use data to stay relevant to the consumer. They use it to shape and transform customer experiences to a level where the customer feels in control, understood and appreciated.

They do this through managing touchpoints, or moments, that consumers have with the brand. Those moments ladder up into larger experiences. And those experiences ultimately form the relationship between the brand and the person. 

Many brands still need to work hard to manage this complex customer experience transformation. It first requires a data transformation, then a digital transformation.

How should brands approach that?

The Haves

A lucky few will form the group of "Haves". Companies that effectively capture their own valuable zero and first-party data on consumers. All aspects of the business will be supported by a ridiculously valuable "data fabric," powered by unique data, applied to create the best personalized moments. Which drive experiences. Which drive enduring relationships.

They will end up with access to a free and open buffet of tools across many vendors and stacks. One built on a stable foundation that is their data fabric. Granted, they'll have to invest to build their assets from scratch; but they will have something truly unique. A setup that can evolve as fast as the best providers in the market and customer experiences that are tuned into their business. 

The Have-Nots

Others will not be in this position. They will be faced with the inevitable deadline of cookie demise, without a data asset to fall back on. They will have to move quickly to find alternative solutions. By essentially buying or renting data. This lands them in the world of third-party data.

Because there are no viable data onboarding partners in Canada, this reliance on external data will effectively mean buying into a ‘walled garden’ provider, using their tools for a majority of marketing efforts and supplying any gained data back to that partner. 

Now, there is nothing disparaging about this scenario. The major ‘walled gardens’ have amazingly effective and flexible tools. From analytics to addressability to AI; it can all be done in these environments.

But it does come with a level of dependency. It also levels the playing field for other competitors. They are using the same tools; with the same functionality; powered by the same data. That takes a lot of the competitive advantages off the table. Which means creating superior customer experiences becomes even more critical.

Another drawback stems from my earlier mention of Galloway's dual business models: consumers paying for premium devices & services will be protected from having their data captured (think Apple); which will make more affluent audiences likely harder to reach through third party data.

Who the “Haves” will be is not that obvious

When talking to Clients, I often hear that they are in the wrong industry to capture first party data. For example, many CPGs will say they can’t build first-party data to scale because they don’t sell to consumers directly. That is a very reasonable and logical argument. I believe it is also false.

There is an amazing opportunity for some of the less obvious non-direct-to-consumer brands to succeed in building first-party data. There are three main reasons why I predict there will be some surprising winners in the battle for data:

1.First-party data is driven by engagement. It is the result of excellent Customer Experience Management. Driving engagement is extremely viable even for brands with indirect sales. The key is to reach out to consumers with experiences that represent the values of the brand, even if it is not related to the actual product. It is the brand as entertainment; the brand as service; the brand as an experience. Think "Hockeyville" or those virtual concerts organized by beer brands.

2. If the engagement on brands doesn’t fit the strategy; there is another option: Do right by society. We are seeing a groundswell of clients adopting CXM (customer experience management) strategies focused on allying with NGOs and good causes. Drive a compelling emotional experience that does good - and true engagement will follow.

3. The final reason for surprising winners will be what I like to call ‘the great reset of March 2020’. COVID-19 changed everyone’s life. The pandemic made our previous market research describe a world that simply doesn’t exist anymore. All our predictive models are about a world that doesn’t even remotely look like the past. In short, a huge portion of pre-existing data became irrelevant. This makes now the perfect time to refocus on data transformation. Everyone is back to the starting line. Who are my customers? What do their journeys look like? Moving fast now will pay huge dividends in the future. The only benefit that those who already went through these transformations earlier have, is that they’re already set to learn quickly; adapt and be successful. 

 

Is there no other option?

Not yet. But there should be! Some markets like the USA have viable third-party data partners outside of the walled gardens. The biggest gap in Canada is that there are no viable "onboarding partners" (companies that essentially connect smaller 1st party datasets to external sources). Companies that are offering this, for instance in the USA, really just don't perform here.

That is why we need to find a different solution: A truly Canadian data-co-op.

The market is right for a neutral industry body to step up and offer a highly governed data clean room solution to non-competing brands that desire to bring their data assets to the rest of the market. Brands that have sizable first-party data and join forces to offer addressability and insights to the “Have-Nots” in the open marketing architecture, outside of the walled gardens.

Imagine a safe and joined environment where a big retailer, streaming content provider, sports franchise and financial service combine their data, benefiting advertisers while building the tools needed for consumers to be both in control and be rewarded for participation.

That future is still a while away but at dentsu, we’re eager to helping make that data-driven, cookieless future a reality, so consider this an open invitation to get in touch!