Or, the Upcoming Non-Event for Most Credit Unions and Community Banks
The recent announcement by Google regarding the ongoing phase-out of third-party cookies created a lot of buzz primarily because Google said it would not be replacing the popular cross-site identity tracker.
When the initial announcement of the third-party cookie phase-out came, Google also threw its support behind the Privacy Sandbox initiative to find alternative ways to connect advertisers and consumers while protecting individual privacy. However, the continued speculation that Google and the advertising industry were working on an alternative identifier led to the March 3rd announcement that none would be forthcoming.
Why We Care About Third-party Cookies
First-party cookies help a website “remember” a visitor to help improve their experience by keeping items in their shopping cart, or not repeating steps already completed. You can see the anonymized first-party data in your site analytics platform.
With third-party cookies, a website and advertiser can share data to help identify a shared user and present relevant information (usually advertising) to the visitor as they travel to sites that use the same cookie serving platform. One of the biggest is DoubleClick, which powers many of Google’s own advertising products, like remarketing. You see this in your web browsing every day as the product you looked at on Amazon or Best Buy follows you around on other sites, or ads for a company that you just researched start popping up in your LinkedIn feed.
Publishers are the biggest beneficiaries of third-party cookies as they generate revenue from providing space on their sites for ads from Google and other ad platforms. The death of this kind of advertising has been in the cards for some time, with GDPR just the first of many blows to the effectiveness of the tracking technique. While Google’s Chrome browser still has the biggest market share of all the browsers, Safari and Firefox (numbers two and three in market share) had already moved to block the third-party cookie. So, while slow, Google’s move to full user-controlled privacy was inevitable. The amount of money in play is the reason a replacement for third-party cookies is being looked for.
Why Moving on Is a Good Thing
The push to protect user privacy is a good thing and Conotext is in full support of the continuing work to make a user’s web activity fully private. We know advertising will change to accommodate the new rules, but we have already weathered a major shift when demographic targeting was no longer allowed for advertising financial services on the major ad platforms.
In our case, we found that targeting by the interests of a user was as good or better for campaign performance than demographic targeting. According to the announcements coming from the Privacy Sandbox group, that appears to be the case with the latest shift as well, at least.
Innovation in the Works
In January, Google announced findings of its tests of interest-based advertising that produced nearly the same results as third-party cookie advertising. According to Google,
“Federated Learning of Cohorts (FLoC) proposes a new way for businesses to reach people with relevant content and ads by clustering large groups of people with similar interests. This approach effectively hides individuals ‘in the crowd’ and uses on-device processing to keep a person’s web history private on the browser.”
The tests of the new ad targeting method were so successful that Google plans to begin testing of the method in Google Ads this quarter (2nd quarter 2021). The Privacy Sandbox work is also looking at ways marketers can create and deploy their own audiences without the use of third-party cookies – basically a replacement for the most popular current method of remarketing.
While we would appreciate being absolutely certain that we only spend to advertise to the most receptive people to our messages, we will always have to live with ambiguity and “waste” in advertising campaigns. After all, if we only spend money to advertise our products to people who know they need our product, we lose out on the huge portion of the market who have not quite made it to that level of certainty: the “well now that you mention it” or “I did not know that” consumers.
If you think about it from an historical standpoint, interest-based advertising is taking all of the demographic data we used to use in direct mail and digital campaigns (age, income, types of car owned, presence of kids) to try to guess what a home equity consumer looked like and replacing it with huge amounts of actual (anonymized) home equity consumer behavior data.
With that data, the ad platform can identify all of the interests of actual known home equity borrowers in the lead up to the purchase. It can then look for other consumers that belong in the same interest group(s) the home equity consumer was part of leading up to their purchase. By advertising to the right interest groups, you get your message in front of consumers with the highest likelihood of wanting your product without looking “creepy” but being timely and relevant instead.
There are plenty more examples of innovation in advertising, including some already in practice (like contextual advertising) but we’ll leave that subject for another post. Today, we’ll leave you with the concluding thoughts from the company who stands to make or lose the most from the efforts to make advertising privacy-friendly, Google:
“People shouldn’t have to accept being tracked across the web in order to get the benefits of relevant advertising. And advertisers don’t need to track individual consumers across the web to get the performance benefits of digital advertising.”
Have more questions about privacy and digital advertising? We are here to help solve marketing problems. Contact us to start a conversation today.
