What you need to know for the post-cookie era of successful digital marketing

Cookies are an important foundation of the digital industry, and since the new General Data Protection Regulation (GDPR) at the latest, they are also visibly at the forefront of almost every website. Meanwhile, consumers - through the use of different end devices, browsers, various apps and the use of ad blockers - are showing the cookie its limits. The complexity of identifying and linking user data for advertising purposes is high, and the former idea of holistically linking users to an ID is increasingly receding into the distance.

Instead, a rethink is taking place: Issues such as the value and protection of personal data and advertising acceptance are gaining in importance. Browser providers such as Firefox and Safari have reacted to this and already block most cookies. The last big blow to cookies came at the end of 2019, when Google Chrome - the most popular browser with a 69% market share - announced that it would also be blocking third-party cookies in two years' time.

Now, we probably wouldn't be talking so much about cookies if there was a clear and generally accepted alternative. As things stand, however, the industry has not yet been able to agree on what the future of data-driven marketing will look like.

Alternative 1: Cookies stay alive

One possibility is to keep cookies alive in a roundabout way. The universal ID is often mentioned as the most promising candidate. In short, such an ID means that users consciously allow the cookie so that it can be used by many partners in the digital ecosystem.

Probably the biggest problem with this idea is that it still involves cookies. The risk that these will also be blocked is correspondingly high. This is exactly what happened when Firefox decided that anonymized user recognition in any form is not trustworthy - not even the IAB's neutral industry solution.

Alternative 2: "Walled Gardens"

The obvious counter-model, i.e. non-anonymized user tracking, is already available and established as a solution. As soon as you have registered with an online service, you basically give your consent to data exchange. All your data can thus be tracked and linked to a unique ID. This is even possible regardless of the end device, browser or associated app used.

However, as you probably also know, these so-called "walled gardens" do not release the data for use outside their own environment, so that, for example, the Facebook user ID cannot be used to target the same person in Google search results. This usually drastically reduces reach and possible uses.

A new privacy-compliant future could consist of thousands of such walled gardens and is currently the likely direction for the industry. The New York Times, for example, recently decided to ban all third-party cookies from 2021 and to rely more heavily on its own login-based user data. In Switzerland, the "Digital Alliance" of Swiss publishing houses is also moving in a similar direction. From a practical perspective, this means that the providers' data will be stored on their in-house data platforms and offered to advertisers as target group segments - but without the option of using the target group data outside of the in-house inventory.

The implementation of the "Digital Alliance", which relies on a shared login but separate data collection, shows how little willingness the digital economy in this country has to share its obviously valuable data. The global competition does not currently need to fear the development of a comparable local product. The project has recently been put on ice - probably due to coronavirus - which means that the first step, the obligation to log in, has not yet been taken.

The big players will benefit

It is therefore foreseeable that the largest, mostly global players with the resources and data volumes required for sophisticated data-driven advertising will benefit. Similarly, alliances, login requirements with transparent added value for users and similar industry initiatives promise to put other market players in a good starting position for the future without cookies. The impending shortage of personal data will presumably lead to an even higher price for this data, which in turn will encourage a shift in media buying towards data without personal reference.

This also means a shift towards contextual data for programmatic buying. Intelligent algorithms and AI-based test and optimization models, for example based on on-site analytics data, can be used to achieve outstanding campaign success. At the same time, so-called "data clean rooms", which enable the exchange of data between advertisers and inventory providers, are becoming increasingly important. This in turn increases the importance and value of the relationships between market participants.

Lots of potential without cookies

The cookie-free world offers many possibilities. In mobile environments, which make up a large part of today's digital communication, the familiar solutions can still be used in the future. Tools used to calculate video convergence can continue to provide reliable recommendations based on study and first-party data, taking into account the complex digital environment. Offers such as contact classes and remarketing can also be based in part on alternative identifiers.

All this shows that a contemporary media strategy and good planning skills can make a decisive contribution to preparing for the time without cookies and thus ensure the future growth of your brand.