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January 22nd, 2020

Why the End of the Cookie Will Usher in a Great New Era For Marketing

This summer, the team from Google Chrome announced a new initiative called Privacy Sandbox, “a set of open standards to fundamentally enhance privacy on the web." The stated goal was to make browsing the web more private and secure for end-users while still supporting publishers by storing individual user-level data. This would enable personalization without exposing raw user-level information, according to Google.

On January 14, the company doubled down on its previous privacy pledge, indicating that the continued iteration of the Privacy Sandbox capabilities should render all third-party cookies obsolete within two years. “We plan to start the first origin trials by the end of this year, starting with conversion measurement and following with personalization," said Justin Schuh, director of engineering for Chrome, in a blog post. The announcement surprised a lot of people because it is a departure from the status quo. It is a completely different strategy than what we've seen as an industry from browser providers such as Apple with Safari or Mozilla with Firefox, both of which simply turned off third-party cookies by default.

It's clear why Google is taking this course. The company still controls 63 percent of the browser market and is facing down serious privacy concerns from pundits and government entities. It should be no surprise then that the company is now replacing third-party cookies as well as associated workaround tactics like fingerprinting with a methodology that will safeguard user-level data in a browser Privacy Sandbox. Add in the fact that Google will provide APIs to enable personalization and measurement capabilities without exposing raw user-level information, and you can see that while end users may be happier, there's a definite issue for advertisers: their ability to measure and target relevant ads is at risk.

Indeed, while the success of this phase-out is dependent on the next two years of development, testing, and verification, publishers, agencies, and advertisers are confused and nervous about how this will play out. Analysts, too, are taking a wait-and-see approach; they’re unsure if the announcement is good news — or bad. “It feels like a solution that sets Google in a power position to essentially be able to dictate — more than I think the adtech ecosystem anticipated would happen — how this will play out," explains Forrester Research Vice President and Principal Analyst Joanna O'Connell in a recent Featured Insight. “It also makes the rest of the adtech ecosystem even more dependent on playing with Google because the third-party cookie is, for all of its faults, the underlying mechanism by which, really, the whole digital advertising ecosystem transacts and communicates."

Here at Neustar, we agree. And while we believe that this is a step in the right direction — one that can transform the marketing ecosystem into one that's identity agnostic rather than one that relies on an unstable marker — there's still some concern. How can we be sure that Google doesn't just use this as an excuse to build on to its already high walled garden?

Yes, a cookieless world is beneficial because it leads to an identity-centric approach, which we have seen to be a more effective approach to marketing. When you stop focusing on the cookie and instead focus on the consumer's overall journey, you have more insight and control when it comes to your impact on both. This is why we've always supported an identity-centric approach to marketing, and why we feel hopeful that we can collectively move towards a paradigm that empowers everyone in the marketing and advertising world.


Working Together, Benefitting All

That said, there is much work to be done. As we move forward, advertisers and agencies — especially those looking to work with a more diverse publisher ecosystem — are going to need us and other industry leaders in the technology space. They will need us to work with Google as well as the other walled gardens such as Facebook, Amazon, and Pinterest to get as much information as possible at as granular a level as possible, as quickly as possible to facilitate better ad targeting and measurement.

Google's announcement means that the adtech ecosystem has been split into two factions: those who have offline identity (PII) and those who do not. For companies with offline identity, such as Neustar, there is a clear path forward for growth and opportunity to provide privacy-controlled and improved data strategy, audience creation, activation, and measurement across the ecosystem. For companies without offline identity, including both data management platforms (DMP) and multi-channel attribution (MTA) vendors, it will be imperative for them to quickly partner or pivot to maintain data access within the ecosystem. This is a clear “evolve or die” moment.

We are able to be a strategic partner because our technology and solutions already address the issue of offline identity. Neustar's OneID system powers our marketing solutions, including the Neustar Identity Data Management Platform (IDMP) and our Unified Marketing Analytics solution. The technology is built on a framework of cookieless connections across leading platforms, publishers, and partners such as Facebook, Amazon, The Trade Desk, Pinterest, Pandora, and MediaMath allowing our solutions to operate at a higher fidelity and confidence, ensuring optimal cross-channel measurement, audience segmentation, and syndication without relying on cookies. We're delivering today what Google is working on providing for Chrome users in the future: a single source of robust, person-based data that has been securely pseudonymized to protect consumer privacy.

For Neustar clients, the future is now. We’re providing data strategy, advanced targeting, and omnichannel measurement solutions for advertisers, agencies, and publishers that want a cross-channel, cross-platform view of the customer.

Our solutions will only improve going forward, as we maintain and grow our stable of strategic partnerships and data assets. We have a myriad of established relationships with industry leaders and regulators such as the NAI, DAA, ARF, ANA, MMA, IAB Tech Lab, as well as our recently established THREEE Marketing Council, which promotes an ongoing collaborative approach to efficient, effective, and ethical advertising. We also have strong relationships with many of the leading publishers in the ecosystem, and we consider the breadth of our partnerships — including those with walled gardens — to be a competitive strength (as does Forrester). This means we are already providing our clients with greater scale, higher accuracy, and consistent management across both offline and online channels.

If you have questions about this announcement, we'd like to help. To further educate and protect our clients as the ecosystem continues to change, Neustar will continually work with marketers to build, maintain, and activate a sustainable data strategy.  It's a challenging time with so much uncertainty — and there's a lot at stake. As Forrester's O'Connell reminded us, many in the adtech world may be caught completely off-guard with this announcement. Many, she says, may be scrambling. However, those organizations that step back, reassess their advertising program, and align with knowledgeable, capable partners have significantly less to lose (and a lot to gain) as the era of cookies comes to an end. 

 

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