Are You Asking the Right Questions About the Future of Identity?

Our Cookieless Future

The death of third-party cookies has clients scrambling to ask their advertising partners: “How do we replace cookies?”

Makes sense, right? Not quite! The market is loudly, clearly, and repeatedly telling us (through new privacy legislation and otherwise) that they don’t like cookies. Finding a cookie replacement is just replacing a problem with a slightly different problem.

The question we should be asking is, “How can we show advertisers that their advertising dollars are working—without cookies?”

Identity Disruption in Advertising

First, let’s recap why cookies are important. Cookies serve two critical functions:

1. Ad retargeting: You know that pair of shoes you looked at once that are now following you around the internet? Cookies made that happen.
2. Ad effectiveness: Did seeing an ad cause you to buy the product? Cookies give us that information.

It’s number two that has media planners worried. How can advertisers show that their digital advertising works and that their digital spend is worthwhile?

Twenty-five years ago, if you wanted to advertise, you placed ads in the newspaper or on TV. But advertisers had no way of knowing whether their ads worked. Sales might have gone up after an ad campaign, but it was impossible to directly connect an ad to a specific customer’s purchase.

The internet (and cookies) changed that. Now, it's at least theoretically possible to track a consumer from ad to purchase. This ability to measure ad effectiveness is a central feature of modern digital advertising.

Now that cookies are going away, the digital ad world is scrambling to find replacements, such as unified IDs, and IP “fingerprinting.” But these replacements aren’t listening to what the market (and lawmakers) are telling us: People don’t like the intrusive nature of the cookie. A whopping 86% of US consumers say they are concerned about data privacy. That means we’ll need to do more than just find a cookie-like solution to the third-party cookie. We’ll need to embrace a new, privacy-friendly approach to digital advertising.

Calculating ROI Sans Cookies

Advertisers, however, expect to see how their dollars work. They're accustomed to seeing the effectiveness of their ad spend, and aren’t going to easily give that up and go back to the days of TV and newspaper advertising.

As a result, there will be continued demand for cookie replacements in the short term. But if these replacements offend consumers in the same way cookies do, they won’t last long.

Which is why we should all be working to answer a different question: How can we show return on ad spend without cookies or other intrusive tracking methods? There are a number of alternatives out there—from contextual targeting, to better leveraging first-party data by creating targeting segments with your CRM or tapping into lookalike audiences. (We’ve got plenty of resources if you want to read all about the latest in privacy and identity—check them out!)

So, what does the long-term future of identity look like? There is no single answer to that question yet. But focusing on finding the answer will allow our industry to develop a privacy-friendly, consumer-first approach—instead of repeating the same mistakes of the past.

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Want to learn more about the future of identity? Check out our guide, Beyond Third-Party Cookies: Your Guide to Privacy-Friendly Advertising.