March 11th, 2021

What's Truly Behind Google's Latest and What's the Next Step for You?

Google has just published a series of blog posts that has the adtech industry in a frenzy—again. The central announcement seems innocuous enough: “Google will not replace third-party cookies with alternative user-level identifiers.” And their accompanying proposals for key use cases (like remarketing, conversion measurement, or ad fraud prevention) are clear as well. But that hasn't stopped anyone from trying to read between the lines.

The crux of the question is this: In killing support for third-party cookies, is Google enhancing consumer trust or serving its own interests?

Consumer trust or self-interest?

It's a legitimate question. The company is dominant in everything from search to email to online videos, but while it's still the #1 ad seller in the business, its competitors (Facebook, Amazon, and Microsoft primarily) are gaining ground. Its control of the browser and smartphone markets (with Chrome and Android) gives Google enormous leverage to chart a course for an advertising ecosystem that serves its interests before the public good if it so chooses.

We see last week's announcements as a welcome progress report, and nothing in those posts gives us reason to question the trajectory that Google has been on for the past year. We've worked with them and the W3C on the Privacy Sandbox initiative, and we'll be actively involved in upcoming origin trials for FLoC-based cohorts, conversion measurement, and their revamped TURTLEDOVE proposal. We've even contributed our own proposal to the digital advertising industry, Neustar PeLICAn, to bring forward research-proven requirements for marketing analytics. And this is just the beginning of the journey of cookieless measurement in Chrome.

This is a good opportunity to take stock of where the industry is headed and how our solutions fit in.

Identified programmatic is a drop in the media ocean

Google just made it crystal clear that it doesn't see a future for PII graphs based on people's email addresses—even hashed. "We don’t believe these solutions will meet rising consumer expectations for privacy, nor will they stand up to rapidly evolving regulatory restrictions, and therefore aren’t a sustainable long-term investment."

Once cookies are gone, probabilistic matching, contextual, or cohort-based methodologies are going to take over, and our view is that the share of total ad spending going through identified programmatic media (i.e., relying on a deterministic match like a hashed email or phone number) will shrink down to 3-5%. We have our own ID solution (called Fabrick ID) and have been hard at work to integrate it with other leading programmatic ID solutions (like The Trade Desk's Unified ID 2.0 and LiveRamp's ATS), but it's important to recognize that this approach will meet the needs of a much smaller portion of brands' total media budgets in the future.

Identity is now front and center

Last year, we launched a new marketing and measurement ecosystem based on customer identity. It's called Fabrick, and it's much more than the ID I mentioned above: It's a complete customer identity platform that makes it possible for marketers to continue to perform cross-channel planning, segmentation analytics, marketing activation, measurement, and attribution even in a world without third-party cookies or other forms of device IDs (like mobile ad IDs).

We recognized early on that the future of marketing would not be built on one single ID, and that marketers would need a cohesive environment to make sense of all options in the market. That's why we made a conscious decision not to place all our eggs in the same basket and architected Fabrick to bring together:

  • Direct first-party integrations between publishers and brands
  • Secure data collaboration through clean rooms and private exchanges
  • A transparent high-quality second-party data marketplace
  • Innovations in cohort-based targeting and measurement
  • Upcoming innovations related to Google's Privacy Sandbox, when available
  • And, of course, integrations with leading programmatic solutions

The advertising equation is built on trust and a real value exchange between consumers, brands, and publishers. Consumers understand the role their data plays in funding free content, they just don't want the companies they interact with to cross the line. Thanks to the flexibility introduced by our multi-pronged approach, Neustar clients today are able to meet their customers' privacy expectations without compromising marketing performance.

Now is the time to streamline customer data management

Collecting, interpreting, and acting upon consumer data is getting harder every day, and news like Google's recent announcement (or Apple's upcoming IDFA changes) are sending shock waves down marketing and IT hallways around the world. How are analytics departments going to reconcile cohort data with individual CRM records, for instance, or adapt their existing behavioral models to new data points? How can they continue to build up and maintain control over their first-party data assets?

According to a Forrester study we recently commissioned, 75% of brands recognize that now is the time to get more direct control over their customer data strategies. And to do so, they need to start breaking down silos between their privacy, analytics, and marketing teams. It's a big ask, but success in this new marketing environment will require nothing less.

In a recent reaction to Google's announcement, Forrester painted an interesting picture of what they see as the future of addressable advertising. They see a pyramid with "consented and authenticated first-party data" at the top, "non-audience-based contextual data" at the bottom, and "anonymous cohort-style segments" in the middle. I think it’s an apt description of the complexity facing marketing departments in the not too distant future.

This is a future we’re well prepared for.

Data-driven strategies are more important than ever to create lasting relationships with consumers. If you have any questions about how Google or Apple’s latest announcements might impact your business and how you can get a leg up on the competition, please reach out.


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