With Google set to crumble the 3rd-party cookie, Sir Martin Sorrell’s advice to marketers: ‘1st party cookies the holy grail’

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With Google having announced it will stop third party cookies on Google Chrome and stop painting targets on individual users for Google Ad Sense to deliver targeted ads, the days of (third-party) cookies-based marketing are well and truly numbered. Sir Martin Sorrell, Executive Chairman & Founder of S4 Capital, has some useful advice for digital marketers who, he believes should start investing in the future, now.

“CMOs,” says Sir Martin, “should take note that this reiterates, once again, the importance of first-party data and how consumer trust and privacy are moving to the forefront of marketing. In the coming years, digital consumer relationships will be earned by customer experience and value exchange.

“With Google Chrome removing support for third-party cookies by 2022, the time for marketers to start investing in the future is now.”

As one of our most respected clients said – Google’s decision reinforces again the importance of first-party data and that we are entering into a world of at least 25 big walled gardens. It’s a natural evolution of the privacy debate: Sir Martin Sorrel

Shifting gears to S4Capital, Sir Martin says it is “guided by our belief that first-party data is the holy grail – and already has its sights on the critical next phase for marketers, where digital identity is in the hands of the brands themselves.

“In 2020, we merged with leading cookieless measurement company Brightblue and readied brands like Mondelēz to leverage first-party consumer data to plan, personalize, and optimize their digital media and content,” he says.

“As one of our most respected clients said – Google’s decision reinforces again the importance of first-party data and that we are entering into a world of at least 25 big walled gardens. It’s a natural evolution of the privacy debate,”Sir Martin says.

So the browser cookie is going away––for real this time, but not all is lost. This is the best long-term decision as Google is coming out on the side of consumers and will not use “alternate identifiers” in the Google ecosystem. There is a great opportunity for marketers to focus on their data strategies over the next 12 months, and need a trusted partner as data, consumer privacy, and technology changes will happen with greater frequency.

S4Capital’s data practice is ready to help clients navigate this announcement, starting with an impact assessment that will help CMOs understand how these changes will impact the returns from their investments media, insights capabilities, and customer experience on digital touchpoints.

Jakub Ortzasek, APAC Head of Data & Analytics, MightyHive, says, “Google is taking the next steps presenting their vision of the cookie-less world, as their newest blog post outlines their intentions to assure a required level of privacy without a devastating impact on the advertising industry. Since Apple’s Intelligent Tracking Prevention updates to Safari invalidated third-party cookies for user tracking, all eyes were on Google.”

“When Google Chrome announced it would remove support for third-party cookies by 2022,many asked how they were going now to maintain their main source of income (advertising) with the impact of these privacy changes. Google presents this challenge as privacy vs utility.

“For a while,” says Ortzasek, “We’ve been fed with developments about Chrome’s privacy sandbox, which attempts to balance privacy and some advertising features. Now it seems that Google found a way to go with FLoC (Federated Learning of Cohorts).”

The upcoming demise of third-party cookies, and indeed, cookies-based marketing — which the privacy-driven Apple and it Safari browser warned the lazy part of the reluctant universe of digital marketers using the invasive third-parties cookies short-cut about – have started to quickly morph into reality when Google announced that once the cookies phase out, it won’t build plans to support user tracking on its Chrome browser. Big, disruptive decision for Google, this, because what this means is the third-party cookies that cling to users on their website travels will no longer be available to point Google AdSense to push highly relevant and targeted contextual ads, and this will cause severe and strong realigning and shifting of both, ad pricing and their efficacy.

So after years of making money invading everyone’s privacy, Google has decided to follow on the footsteps of evangelist brands Apple and Mozilla Firefox which have already been blocking all third-party cookies.  Google’s Director of Product Management, Ads Privacy (yes, that department at Google) and Trust (and that too) David Temkin, wrote  that going ahead, Google would neither build “alternate identifiers to track individuals as they browse across the web, nor will it use them in its products”. So curtains to Google tools for tracking thereafter.

Well, thanks to the growing noise and global pressure from proponents of individual privacy , the mounting pressure from regulatory authorities and pressure from anti-trust moves against Google and others, as also some governments now having squared up to fiercely eyeball the bullying tactics of the FBs of the world, this big announcement from the digital giant heralds the massive shift in Digital Marketing that professionals were avoiding like the proverbial pigeon, eyes tight shut.

And the severely algorithm-dependent digital marketers will be haunted by the ancient spectre of the spray-and-pray  style of digital advertising. Well, not really, because Google will shift its scrutiny from individual users to the herd. Actually, the flock. Just spelt FLoC as the acronym for its new approach called Federated Learning of Cohorts or FLoC, which will shift focus from individuals to groups or clusters of people share habits and areas and activities of interest. But a more detailed piece on that the next time.

However, in fairness, to present Google’s perspective unalloyed, here’s what David Temkin, Director of Product Management, Ads Privacy and Trust at Google, wrote earlier this week. He titled his blog post, Charting a course towards a more privacy-first web, and here’s what he wrote:

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David Temkin

Director of Product Management, Ads Privacy and Trust

It’s difficult to conceive of the internet we know today — with information on every topic, in every language, at the fingertips of billions of people — without advertising as its economic foundation. But as our industry has strived to deliver relevant ads to consumers across the web, it has created a proliferation of individual user data across thousands of companies, typically gathered through third-party cookies.

This has led to an erosion of trust: In fact, 72% of people feel that almost all of what they do online is being tracked by advertisers, technology firms or other companies, and 81% say that the potential risks they face because of data collection outweigh the benefits, according to a study by Pew Research Center.

If digital advertising doesn’t evolve to address the growing concerns people have about their privacy and how their personal identity is being used, we risk the future of the free and open web.  

That’s why last year Chrome announced its intent to remove support for third-party cookies, and why we’ve been working with the broader industry on the Privacy Sandbox to build innovations that protect anonymity while still delivering results for advertisers and publishers. Even so, we continue to get questions about whether Google will join others in the ad tech industry who plan to replace third-party cookies with alternative user-level identifiers. Today, we’re making explicit that once third-party cookies are phased out, we will not build alternate identifiers to track individuals as they browse across the web, nor will we use them in our products.

We realize this means other providers may offer a level of user identity for ad tracking across the web that we will not — like PII graphs based on people’s email addresses. 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. Instead, our web products will be powered by privacy-preserving APIs which prevent individual tracking while still delivering results for advertisers and publishers.

 

Privacy innovations are effective alternatives to tracking

People shouldn’t have to accept being tracked across the web in order to get the benefits of relevant advertising. And advertisers don’t need to track individual consumers across the web to get the performance benefits of digital advertising.

Advances in aggregation, anonymization, on-device processing and other privacy-preserving technologies offer a clear path to replacing individual identifiers. In fact, our latest tests of FLoC show one way to effectively take third-party cookies out of the advertising equation and instead hide individuals within large crowds of people with common interests. Chrome intends to make FLoC-based cohorts available for public testing through origin trials with its next release this month, and we expect to begin testing FLoC-based cohorts with advertisers in Google Ads in Q2. Chrome also will offer the first iteration of new user controls in April and will expand on these controls in future releases, as more proposals reach the origin trial stage, and they receive more feedback from end users and the industry.

This points to a future where there is no need to sacrifice relevant advertising and monetization in order to deliver a private and secure experience.

First-party relationships are vital

Developing strong relationships with customers has always been critical for brands to build a successful business, and this becomes even more vital in a privacy-first world. We will continue to support first-party relationships on our ad platforms for partners, in which they have direct connections with their own customers. And we’ll deepen our support for solutions that build on these direct relationships between consumers and the brands and publishers they engage with.

Keeping the internet open and accessible for everyone requires all of us to do more to protect privacy — and that means an end to not only third-party cookies, but also any technology used for tracking individual people as they browse the web. We remain committed to preserving a vibrant and open ecosystem where people can access a broad range of ad-supported content with confidence that their privacy and choices are respected.  We look forward to working with others in the industry on the path forward.