Season 2 Episode 15
Google Changes Course for Third-Party Cookies: What Marketers Need to Know

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Episode Summary

On this episode of The Marketing Rapport, host Tim Finnigan sits down with Russ Schultz and Christine Frohlich to discuss Google’s change of course regarding third-party cookies.

Russ, Verisk Marketing Solution’s digital product and media ad tech subject matter expert, shares his take on how Google’s decision impacts marketers and the future of digital advertising. He believes companies that already have robust first-party data strategies will be well-positioned for a cookieless future. Russ also advises listeners to stay vigilant and continue diversifying their ad budgets to include areas of ad tech that are not as cookie-dependent.

Christine, VP of Product and Data Governance, stresses the importance of transparency and disclosure around data collection, regardless of what the future holds for cookies. She believes companies should prioritize building trust with consumers by providing them with control over their data, ultimately creating stronger relationships and better products and services.

Guest-at-a-Glance

Key Insights

• The Future of Third-Party Cookies Remains Uncertain
  Despite Google’s latest announcement, the future of third-party cookies is still uncertain. While they may be around for a while longer, their effectiveness and reach are likely to diminish as consumers prioritize privacy and exercise their right to opt out of tracking. This uncertainty highlights the need for marketers to focus on building robust first-party data strategies, diversifying ad budgets, and prioritizing consumer trust and transparency.
• First-Party Data is Crucial for a Cookieless Future
  Both Russ and Christine emphasize that building a strong first-party data strategy is more critical than ever. As third-party cookies become less reliable, marketers need to focus on establishing direct relationships with their audience and obtaining consent to collect data. This approach will enable personalized targeting, measurement, and a deeper understanding of consumer behavior, ultimately driving better marketing outcomes.
• Transparency and Consumer Trust Are Critical
  In a privacy-conscious environment, building trust with consumers is crucial for long-term success. Christine underscores the importance of transparency around data collection practices, regardless of evolving regulations or the fate of third-party cookies. Companies that prioritize clear disclosures, provide consumer control over data, and demonstrate the value exchange of data sharing will be best positioned to navigate the shifting landscape and build stronger, more sustainable customer relationships.

Episode Highlights

The Impact of Third-Party Cookie Deprecation on Publishers
Timestamp: [00:07:48]

Russ explains that the demise of third-party cookies could significantly impact publishers who rely heavily on them for revenue. Smaller publishers who haven’t prioritized building first-party audiences may need to rethink their business models, potentially introducing subscription services or registration walls to offset lost ad revenue.

“A lot of publishers that used to rely on anonymous third-party cookie targeting as a major revenue stream no longer have that. And if they don’t have a lot of first-party data to use to restore a lot of that ad revenue then they might have to change their business models.”

The Role of Regulation in Shaping the Future of Data Privacy
Timestamp: [00:19:24]

Christine discusses how the lack of a comprehensive federal privacy law in the U.S. makes it challenging to predict the future of data privacy and online targeting. However, she anticipates that the U.S. will eventually implement a federal privacy law that will likely impact third-party cookie tracking and data collection practices.

“Those regulations are yet to be determined. That’s still like trying to look in the crystal ball. I think there are certain trends that we can see from what’s happening at a state level.”

The Potential Impact of the Google Antitrust Case on Third-Party Cookies
Timestamp: [00:10:36]

Russ speculates on how the recent ruling in the U.S. Google antitrust case, which found Google’s search practices monopolistic, could indirectly impact the timeline and approach to third-party cookie deprecation. He suggests that Google may need to carefully consider the implications of its actions on its market dominance as it navigates these changes.

“Google’s thinking about how do we want to work with the DOJ, and how do we want to work with others to potentially deal with cookies and end user choice impact on third-party cookies. It’s an indirect signal showing that third-party cookies could impact monopoly positioning.”

Diversifying Ad Budgets and Strategies for a Cookieless World
Timestamp: [00:24:07]

Russ encourages advertisers to stay agile and diversify their ad budgets to reduce their dependence on third-party cookies. He suggests exploring ad tech channels and strategies that are less reliant on cookies and focus on building identity solutions that incorporate alternative identifiers for targeting and measurement.

“Continue to diversify your ad budget. Think of areas of ad tech that aren’t as cookie-dependent, where you still can one-to-one target, measure, and be able to really get a true understanding of your return on ad spend.”

Top Quotes

[00:17:52] Russ Schultz: “Ultimately the end user’s response to third-party cookies is still very up in the air, because if a lot of them decide ‘there’s an easy button, I opted out of it,’ that will have wild implications not just in the ad tech economy, but in the end-user experience.”

[00:19:26] Christine Frohlich: “It’s difficult to say at what point in time the U.S. will have a federal privacy law. But if we take our cues from what’s happening globally, and in particular what we saw happen in the EU with GDPR, my prediction is that at some point we will have a federal privacy law in the U.S.”

[00:26:50] Christine Frohlich: “If you have first-party data, you can augment that with additional insights that help you understand your consumer better, which is going to help you create stronger relationships, make sure you’re creating products and services that are going to be a value to them.”

[00:05:54] Russ Schultz: “Advertisers that had really strong first-party data out of the gate, or did a lot of successful strategies to grow them, are really well-positioned to handle cookies going away.”

[00:08:55] Russ Schultz: “When you look at it overall as an industry, when cookies were being used on the buy or the sell side, it was around 75% of the whole ad tech space that was involved with cookies.”

[00:17:37] Christine Frohlich: “We’re definitely seeing, whether it’s a company like Google or a company like Apple, proactively taking steps to give consumers more transparency on how their information is being used.”

[00:21:13] Christine Frohlich: “Companies need to at least be transparent and disclose what they’re doing with cookies and give consumers some optionality at their owned and operated web level.”

[00:24:13] Russ Schultz: “For all you advertisers and vendors and compilers out there that were preparing for a cookieless world, stay the course, stay smart, stay versatile.”