The cookie conundrum: How are brands adapting beyond the demise of third-party data?

Google has unequivocally taken a decisive stance in its quest to obliterate third-party cookies from its Chrome browser before the culmination of this year. This move, long foreshadowed by Google's announcements, signifies a seismic shift in the digital advertising landscape.

With third-party cookies being a cornerstone of targeted advertising for decades, the ramifications of this decision extend far beyond mere technical adjustments, posing profound challenges to advertisers, publishers, and the entire ecosystem reliant on targeted advertising strategies.

Despite the protracted discourse surrounding the demise of third-party cookies, brands find themselves grappling with the exigency of finding viable alternatives.

With the impending loss of a reliable mechanism for tracking user behaviour across the web, advertisers are left in a state of flux, seeking novel methods to maintain relevance in a privacy-centric digital milieu. As privacy regulations tighten globally and consumer expectations evolve, the onus is on brands to innovate and adapt.

In a panel discussion, held at Digies 2024, hosted by afaqs!, industry experts dissected the dichotomy of cookie deprecation and what it means for marketers worldwide. The panel included Vishal Chinchankar, CEO, Madison Digital; Rajiv Dhingra, founder and CEO, ReBid; Dippak Khurana, co-founder and CEO, Vserv and VMAX; Gaurav Seth, vice president of data solutions, LS Digital; Paras Mehta, business head - programmatic solutions, Interactive Avenues.

Vishal Chinchankar, CEO of Madison Digital, illuminated the nuanced landscape, emphasising that while the demise of third-party cookies looms, alternatives such as first and second-party (1P and 2P) data offer a ray of hope for marketers.

"Marketers must adopt a publisher mindset," he urged, noting that those entrenched in the direct-to-consumer (D2C) space are better equipped to weather the storm, leveraging first-party data for targeted strategies.

He underscored the inevitability of first-party data adoption, asserting, "It's not hype, it's reality. There are questions such as the composition of the demographic of a brand’s customer, reengaging them, their drop-off time, or their lifetime value for the brand. If the marketer has the 1p data and is able to customise it, he’ll probably inch towards the answers."

Paras Mehta, representing Interactive Avenues, echoed Chinchankar's sentiments, acknowledging the multidimensional challenges posed by cookie deprecation. As per Mehta, 20 percent of digital marketing bucks need a more nuanced approach in wake of cookieless world.

"We must prepare for what lies ahead," he cautioned, highlighting the varying impacts across industries. Mehta projected a potential revenue dip for publishers but stressed the importance of readiness amidst evolving paradigms.

"From a publisher’s perspective, there is going be a drop in revenue, but i dont think it is going to be that significant at least in the near future. But this is a good reminder for people to prepare themselves."

Rajiv Dhingra, CEO of ReBid, delved into the quest for a comprehensive customer view amidst the impending cookie apocalypse. "Over 60% of marketers are striving for a 360-degree view of a customer," Dhingra disclosed, urging brands to embrace AI-driven solutions to amalgamate disparate data streams. He emphasised the imperative of data harmonisation, stressing that the timeline for readiness hinges on proactive measures.

“Writing is on the wall for the clients. Today data can be processed and turned into intelligent nuggets with the help of AI. All the enterprise AI players are pushing towards that future. It is upon marketers and organisations to get their act together and use it to the best of their abilities. Harmonise it, connect it, and unify it, so that when it is fed to any copilot, it spits out intelligence and not garbage.”

Gaurav Seth, VP of data solutions at LS Digital, addressed the consumer experience paradigm shift in light of retargeting challenges. He says, "We’ve all experienced retargeting before. But with the demise of third-party cookies, brands must pivot towards managing first-party data." 

Retargeting entails the strategic practice of re-engaging website visitors who have previously interacted with a brand but haven't completed a desired action, such as making a purchase. This technique allows advertisers to deliver tailored advertisements to users across the web, serving as a potent tool for increasing conversion rates and maximising ROI.

At the heart of retargeting lies the use of third-party cookies, which enable advertisers to track users' online activities and serve them with relevant ads based on their past interactions.

“People need to start collecting, and then unify the first-party data. With cookies, the technology was a little complex. But now, some of the existing technologies, such as Google Analytics allows you to gather, segment, and analyse data. Once you have that in place, then you can build AI models on this information,” Seth advised, citing the evolution of analytics tools for enhanced data utilisation.

As per, Dippak Khurana, co-founder and CEO of Vserv and VMAX, “The demise of cookies is actually a blessing in disguise." Khurana harked back to a time when the internet was a more private space, devoid of the ubiquitous tracking mechanisms that now define online interactions. 

Reflecting on this transformation, he outlined the progression from traditional impression-based advertising to the era of targeted ads facilitated by cookies. However, Khurana posed a thought-provoking question: "What alternatives exist for brands seeking to target customers effectively?"

In response, Khurana proposed a solution: second-party data. He explained, "This second party data harnesses deterministic identifiers, such as hashed mobile numbers, to facilitate targeted advertising without relying on cookies." Khurana's words resonated as he highlighted the rapid adoption of these alternatives, citing over 50 brands already embracing second-party data with Vserv, undeterred by the impending demise of cookies. 

Furthermore, he underscored the growing significance of first-party data, noting its evolution from obscurity a decade ago to a prized asset today. "Consumers are increasingly willing to exchange data for a seamless transactional experience," he noted, positioning first-party data as a crucial element in forging deeper connections with audiences.