Cookieless Marketing. Lessons from Netflix, Disney, and Amazon
“We’ve had a good time, but it’s the end of the line” -Third-Party Cookies (1994–2023).
Its invention was as revolutionary as the creation of the wheel, and its death is as monumental as the discontinuation of Adobe Flash Player a couple of years ago.
Similar to the aforementioned ban, the removal of third-party cookies will affect the digital marketing and web development industry in as major a manner as the flash player’s demise did.
To be quite frank and honest, we have all known that such a move has been coming. The way cookies were being (mis)used had sealed their fate long ago.
Now, ethical, open, people-oriented solutions will have to take their place. So, what exactly are said solutions? Read on to find out.
This report by MNC Deloitte says that “the main danger posed by non-adapting cookieless marketers could be that the advertisements shown turn boring”.
A (Very) Brief Timeline Of The Cookie
1994: A programmer at Netscape (A Web Browser) invents the cookie. His goal is to help the website remember users, but cannot track them at all.
1995: Coders at DoubleClick (One of the first AdTech firms) figure out that cookies can be exploited to track users across the world wide web. They dominate the Ad industry forseg years after figuring this out.
2008: Google (Alphabet Inc.) acquires DoubleClick for upwards of USD 3.1 Billion in a closed-door negotiation. Google builds on DoubleClick’s legacy and expands the scope of third-party cookies both vertically and horizontally to include more types of tracking across more types of web pages.
2016: The European Union parliament passed the GDPR (The General Data Protection Regulation), which effectively strangulated the use of third-party cookies in Europe. The GDPR effectively requires users to have more control over whether they are tracked by cookies, to begin with, and even what permissions for data collection they give the cookies.
2020: Google announces that they will completely phase out third-party cookies in two years, that is, by 2022.
2021: Google revises the deadline to the end of 2023.
So, What Is The Future?
Cookieless.
Cookieless marketing is the only way for targeted marketing and personalized advertisements to continue to exist.
Without it, we would go back to the days when absolutely unrelated and uninteresting adverts would flood our youtube feeds and blog posts.
The following are what I find to be the most viable replacements for third-party cookies:
- FLOC algorithms.
- ABM (Account-Based Marketing).
- Contextual Marketing.
To counteract the anti-cookie drive, service provider giants like Netflix and Disney are introducing ad-inclusive subscriptions to gather targeted data. These subscriptions will cost less than the ad-free tiers, and will likely be in a different [1] segment.
The aim of such a move is to increase the revenue that an enterprise earns, using the following strategizations:
● Reduce the subscription cost to their services, which should, in theory, increase the number of subscribers as this would make their service more affordable and thus, more accessible to their customer base.
● The companies that follow through with a move (it will probably only be for the base tiers of their subscription), they will also be able to earn ad revenue from the companies that choose to advertise.
● Depending on if the companies choose to collect data, they could learn data about customer preferences, and could potentially improve their content-pushing algorithms that they employ on their applications.
It is at this point that I should mention that third-party cookies are not going extinct like the dinosaurs — they are simply becoming far less potent.
FLOC Algorithms
These are proposed algorithms that may well become commonplace with the end of cookies. FLOC stands for “Federated Learning Of Cohorts”.
Basically, earlier, cookies would track users of a website or web page at the individual level, and privacy was at a premium because TPCs (Third Party Cookies) would track the user long after he or she had actually left the website.
That was why we were so often in a situation where you would click on a product on a whim and then you would see adverts for similar products for the next week.
Via FLOC, a predefined number of users would be “batched” together in a cohort, and their activities as a whole would be traced, but not at an individual or even semi-individual level.
This cohort would then be shown targeted and personalized advertisements based on the activities of the cohort as a whole.
Translation: the searches of a member will affect not only him or her anymore but also that of the cohort to which s/he is batched.
This tracking will, of course, be anonymous. So, as marketers do not have that much to worry about after all — we are not going to lose all our data generation tools.
Netflix is already looking to try this in a new update, where similarly tagged shows will be pushed to the entire cohorts feed.
Account-Based Marketing
Pardon the jargon, but this is the best way to explain this concept.
Quit writing those generic monthly or weekly newsletters. Account-based marketing involves highly targeted, keyword-specific messaging for a small group of people in order to engage them with your inbound flywheel.
In other words, ABM marketing strategies involve fewer cookies and more connection between the organization and the customer.
We have all seen that targeted relationship maintenance and building make viewers convert to customers quicker than other, traditional forms of advertising.
Similar to FLOC algorithm-based marketing strategies, ABM involves sending targeted communication to a “batch” or “cohort” in order to convert them to customers or at least boot them down the opening of the funnel/ funnel process.
Remember to try and strike a balance between inbound, and outbound for your ABM strategy — too much of either is not good.
Contextual Marketing
This entire subsection can be summed up in one line: do not forget about the power of first-party cookies.
If a user comes to your website for the first time, your messages to them on the site should be along the lines of “hello, nice to meet you”, and if they are a returning customer, that message should convey sentiment of “Welcome back”.
Contextual marketing means displaying personalized advertisements to a customer based on their previous search histories on your website.
Thus, contextual marketing can make use of first-party cookies, and these are not going away any time soon.
Amazon is a great example of this: their entire “recommended” and “deals you may like” sections on your homepage are wholly contextual.
Wrapping Up
Do not hesitate to make hay while the sun shines — cookies are still around and will be for a while, so gather as much data as you can.
However, do not overdo it — just collecting the data and not acting on it till the ban is complete is also a prudent strategy, currently being followed by Hulu, who have ad-based subscriptions, but also have third-party cookies.
It is not doomsday for data-driven marketers and AdTech professionals — it is simply one of those points where those who do not adapt to changing scenarios fall by the wayside.
If you dont want to fall by the wayside and have a chat about how you can move with the times and give your digital marketing the edge it needs then lets chat.
