AdTech Remarketing: Cookie Challenges Ahead

AdTech Remarketing-How cookies Work- StratoServe

The announcement by Google that 3rd party cookies will be gone in Chrome in 2022 has raised great concerns among advertisers. The AdTech community of hundreds of companies will also need to figure out their approach. Here is some background on this debate:

Do you recall those creepy ads that follow you around? These are remarketing ads in the Google system and also called retargeted ads in the AdTech world. Over 70 % of your first time web visitors will never return. These folks have moved down the buyer’s journey and are aware of your brand. If they were at more than one page or spent more than 5 seconds they are at the consideration stage. If you have an e-commerce website and new customers abandoned the cart- they were so close to conversion!

While those creepy ads freak out many consumers for privacy concerns, a more relaxed way of thinking about them is the persistent salesperson who follows you out of the store. When you enter the physical store and leave without buying something! Also consider, that if consumers want all content for free – how are publishers going to survive? Thus, digital display ads provide revenue for publishers and return to advertisers who spend.

Remarketing might be annoying- but it works for the advertiser and is cost effective. And this is what is about to change for Chrome that has over 63% of the browser market.

It’s timely to recap what all this cookie terminology in terms of basic marketing examples from the pre-Internet era:

  1. What are first party cookies ?: When you go to a website and read their content,browse products or buy products -the website (and business) starts a one to one direct relationship with you. Think of a Trade Show where you dropped your business card at a particular business booth. That gives the business a chance to follow up after the trade show. This is the strongest, best way of conducting business. This is is the cookies with milk option. So comforting and valuable for both business and privacy.As all Trade Show exhibitors (from pre-Covid) know, there are many people who come by your booth talk, collect the freebies but don’t leave their contact details. Do you wish you could follow up later? That’s what remarketing or retargeting helps you do for your website visitors.
  2. What are second party cookies? The problem is that you have a limited number of customers and you want to find more customers. Think of the trade show where the organizer frequently provides a list of attendees to exhibitors as a part of the exhibitors fee. You can follow up via direct mail and email by referring to the Trade Show connection. Since many of the trade show visitors may not have visited your booth, there is a chance that some non-visitors respond to your direct marketing efforts. Similarly if you are a Cruise line rolling out specials for after the pandemic, it would be helpful if you could repeat ads to folks on the travel pages of the online newspaper who had already visited your Cruise line deal page. The newspaper is a second party as there is a subset of the Cruise line web visitors. The second party has a larger pool of customers, some may be common to your customer base or be similar to your customers. They are the second larger cookie wrapped in the chocolate of their own customers. Your milk of customers is being connected to the chocate of customers of the second party. This has privacy issues but is acceptable just as we accept ads on TV targeted to us based on TV shows we watch.
  3. What are third party cookies? Third parties in the cookie world have no direct or indirect connection with the customer. They are neither trade shows who have a first party relationship with visitors nor online newspapers or TV shows who have a first party relationship with readers. Instead, they are like Direct Mail List providers who sell mailing lists for direct mail or email. The Direct Mail list providers compile the list from websites (B2B) , town home owner records, phone books etc. that are mostly public in nature. It is the third party who attaches a cookie to the browser and then tracks the person across the web. Think of the crumbling cookie that leaves a crumb on your chrome browser and then goes wherever your browser goes, recording all your behavior. This enables personal tracking and has privacy advocates riled up. Privacy advocates feel concerned that an entity who has no connection to the web visitor or the website- keeps tracking the visitor. Browsers like Firefox and Safari already do not allow 3rd party cookies. Chrome is following suit.

If you have a customer connection it is golden from both privacy and a marketing point of view. Thus, big companies are very interested in creating “Walled Gardens”. Walled gardens involve a signup into Apple, Facebook,Google,Instagram, LinkedIn or New York Times. Once you are signed in,you are walled in! You enter a first party customer relationship with that entity. Your behaviour data on these platforms become very valuable to advertisers.

In the pre-Internet era there were only so many (hundreds of) thousands of newspapers and TV channels. Today there are over a billion websites. The audience is fragmented or rather finds something interesting in the long tail. Reaching them while preserving privacy is a fine balancing act.

Developers from AdTech and elsewhere are being encouraged to participate in the Google initiatives of Turtledove. and FloC as part of their privacy sandbox.

Marketers will look eagerly to solutions that allay privacy concerns and allow respectful retargeting.

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