Is the cookie crumbling?

The long-running cookie deprecation saga appears to have reached its inglorious end. But what have media businesses learned along the way?

In the same manner as a team member who repeatedly promises to deliver their part of the project but never delivers, Google’s mooted deprecation of the third-party cookie limped along for years without anything tangible turning up.

The closest the media and marketing industries ultimately got to a sea change in the way cookies were handled came at the beginning of this year. Google moved 1% of its users into its so-called ‘privacy sandbox’ as a trial, with plans to leap straight to 100% of users by the end of the year with no intermediate steps. It was seen as the commitment to a cookieless future that the search giant had been promising for years – but ultimately in July it announced that the scheme was to be scrapped. And just as a team project falls apart when one member doesn’t deliver, the years and years of work on preparing for the privacy sandbox was all for nothing.

For news and media companies, who had been threatened for years with the removal of the primary means by which they tracked audiences for commercial purposes, it was a frustrating announcement. Some wryly noted that it was almost an inevitability given how lengthy the process had been, and how many times it had been kicked down the road.

Others – rightly – pointed out that hundreds of thousands of hours had been poured into a project that was unilaterally tanked by Google, which did little to heal the fractious relationship between publishers and platform.

However, while the total deprecation of the third-party cookie might not have come to fruition, it is undeniable that media businesses did begin to prepare for a cookieless future. In doing so many senior decision makers within those companies sought to re-emphasise some of the capabilities that they had allowed to lapse in the chase for enormous digital advertising revenue. So, to what extent has the mere threat of cookie deprecation and the work done to ameliorate its consequences actually benefited publishers in the long-term?

First party data’s return to the top table

While the move away from third-party cookies has been halted, the potential of it has some advertisers thinking about their relative value compared to the first party data to which they have access. With the push towards subscriptions that has been gathering steam across the media industry over the past decade, media businesses now have a vast stock of first party data to which they alone have access.

As Google estimated that ad performance could take up to a 60% hit from the change, impacting the amount advertisers would be willing to spend, it is small wonder that publishers would look for some way to avoid the commercial hit in turn.

Last September Shawn Riegsecker, founder and CEO of digital ad platform Basis Technologies, told a crowd of players in the local news space: “As for ad agencies, no one gives a s*** about buying local news. The end of cookies could change that — we should all thank Google. This is the opportunity. When the cookie goes away, who can garner the depth of audience[s] better than local news organizations?”

And that, in turn, meant that local newspapers found themselves needing sales teams able to communicate those benefits to advertisers. PJ Browning, publisher and president of The Post & Courier in Charleston, says: “We added a digital agency with a different staff and digital-only sellers. It has been the biggest game changer for us to compete in the digital space. We tried to teach our core print sales reps how to sell digital, but we discovered, as other news outlets have, that you need separate digital reps who are consumers of digital content to sell it.”

The move to sell advertising based on that first party data, then, is forcing some publishers to make their digital transformation faster than they might otherwise have done. Research from Performance Marketing World found that nearly four fifths (78%) of publishers were investing more in their first party data capabilities as a result of the depreciation of the cookie.

Moreover, that increased primacy of first party data allowed publishers to reset the value of advertising across their owned and operated websites. While it remains a hard sell to some media buyers who still value scale above relevancy, some publishers are charging a premium for their first party and contextual advertising solutions. While that remains a difficult pill to swallow for some advertisers it is a worthy attempt to get off the hamster wheel of selling vast fly-by-night audiences for pennies – a practice that was created in part by the widespread use of third party cookies.

The mix of six

It cannot be overstated how long the overall process of cookie depreciation – from the first announcement to its retirement – took in total. These were years in which publishers had to grapple with the fact that one of their major sources of revenue was about to take a hit as ad targeting became far harder.

Faced with that likelihood, publishers engaged in a vast amount of experimentation to discover potential new revenue sources. While many – such as the investment in events – were forestalled by the Covid-19 pandemic, publishers accelerated their experimentation in using apps and newsletters to bring potential audiences into the ecosystem, in new reader revenue opportunities, in the launch of premium products as paid-for extras, and in the application of artificial intelligence.

Brands like Dotdash Meredith, for example, sought to ameliorate the issue of low CPMs from the deprecation by creating more video content. Typically video inventory can be sold for much higher amounts, or provides lucrative sponsorship opportunities, as the Independent has capitalised upon.

Most importantly, however, the return to primacy of first party data and the experimentation that came with it has allowed publishers to focus on creating virtuous circles between all their products.

The Telegraph, for example, has been using its suite of newsletters in a far more targeted manner, using them as a means of bringing people into its ecosystem. The brand’s head of newsletters Maire Boneheim explains that “if people become a subscriber to The Telegraph after clicking on a link in a newsletter, they’re 50% more likely to still be a subscriber a year later. Some of [the newsletters] might be specifically aimed at providing a short window to registrants who aren’t sure yet and are dipping their toes,” she explains, but the important thing is that once they are within the ecosystem they are able to be monetised in a variety of different ways based on the data they offer up to the publisher.

The third party cookie might be here to stay – but the threat of its removal forced publishers to adapt to a potential world without it. In doing so they both rediscovered their strength in providing contextual advertising opportunities based on first-party data, and became more experimental than before. It was a hassle, yes – but in the long-term it’s a healthier media ecosystem.

Chris Sutcliffe

Tech and Media Reporter and Co-Founder of Media Voices 

[email protected]

This blog by MTA appears on MediaMakersMeet.com: bit.ly/3zn2UK7

Martin Tripp Associates is a specialist executive search consultancy. We work globally across the media, information, technology, video games and entertainment sectors, and with some of the world’s biggest brands on communications, digital, marketing and technology roles. Feel free to contact us to discuss.