Strategies For Marketers: Navigating the Cookie-Less Future

Tessa Burg: Hello and welcome to another episode of Leader Generation, brought to you by Mod Op. I’m your host, Tessa Burg, and today, I’m joined by our executive vice president here at Mod Op Shanon Sullivan. She heads up our Audience Strategy and Media teams. Shanon, thanks so much for joining us.

Shannon Sullivan: Thanks. Glad to be here, Tessa.

Tessa Burg: So today, we are going to be talking about a very hot topic, cookie deprecation. And it’s been buzzed about for years, but now it’s finally here. So before we jump into what people should be doing, benefits, outcomes of this massive change, tell us a little bit about yourself and your role here at Mod Op.

Shannon Sullivan: Sure. So I’ve been at Mod Op for almost 25 years. My background has been in account service originally, and then I started heading up the digital media side of Mod Op. So my responsibilities are really connecting our clients to their audiences through all the different channels that we use. And obviously with cookie deprecation, that’s gonna be pretty largely impacted. So I’m happy to share some of the knowledge and tips with everybody today about what to do about that.

Tessa Burg: Yeah, so when we think about cookies, there’s actually different types of cookies. Can you tell us what’s the difference between first party and third-party cookies?

Shannon Sullivan: Sure. So I’ll start first in case people are not really familiar with what a cookie is, it’s basically in a very simplified manner, a piece of text that gets put on websites that tracks information. And that information can range from your settings or your login. If you have, like it reminds you of your login number or it can be tracking you to be able to target you with personalized messaging and ads and things like that. So what first-party cookies are, are those that are owned by a company. So when you go to a website and you are engaging with them to buy a product, so we’ll just use HOKA running shoes or something and you’re gonna go to the HOKA website, there are cookies on there that track a couple of things. Some are session-based. So those are ones that just end after you’ve got your browser and you close down. And there’s persistent cookies that are first-party as well that are tracking your activity on that site. So what you look at, what you put in your cart, how you transact, if you happen to transact and it’s all information that that company is capturing about you based on your interaction on their website. And that’s all considered first-party data. That’s normal data that you would expect to have captured based on your interaction with a company or you sign up for their newsletter or you take a survey or in those kinds of things. What third-party cookies are is when a third-party company puts a cookie on a website and all these companies like HOKA have those. And that is to enable other types of information. And so a lot of that has to do with your behavior, the actions you take, the decisions you make, the things you source, you know, what you’re trying to educate yourself on. And all those data points get aggregated by aggregators and then can be accessed by advertisers to target you. So it can access a lot of different information. And the reason this is becoming such a big issue is that there’s a lot of people that feel like that’s an invasion of privacy. And so it’s really driving this change from Google is a couple things. One is related to privacy and owning your own information and having the right to opt out, opt in to what you want to receive and how you wanna be targeted. And some of it is more, you know, regulatory pressure from governments and things like that. So that’s a little bit of an overview about the two different aspects and how we would address those based on this cookie deprecation are different.

Tessa Burg: I think it’s funny that it’s for privacy because as numbers people and we’re just trying to, you know, get our ad, get our message, get our experience to someone at the right place in the right time. And so this data really helps personalize when that ad gets delivered. But of course, there’s bad actors and so they cross lines, they spam, they hit people up too much and now they ruined it for everybody.

Shannon Sullivan: That’s true, yes.

Tessa Burg: What are the areas that are going to be impacted from third-party cookies being deprecated?

Shannon Sullivan: Yeah, so a couple of key areas and some of those have to do with sort of internal things that are gonna be impacted and some of them more about external. So from an external standpoint, the biggest thing that’s gonna impact advertisers, particularly people that are investing in media, is targeting. So when you go and buy third-party lists, there’s lots of lists you can buy that have to give you information about in market. Somebody that purchased something in Home Depot the last 30 days or this person has taken these actions, it would be a good indicator that they are in market to buy car for example. So that information is no longer gonna be available because it’s really dependent on cookies. There’s also a lot of behavioral information that is no longer gonna be available as well. So what that means for targeting is that it’s going to get less granular, less specific, which actually creates a less valuable ad experience for the recipient. But it doesn’t mean that there aren’t other things that can be done. So that’s one area we’ll talk about sort of what we can do about that in a second. The other one is attribution. So with some of the changes with cookies, there’s gonna be some attribution models changing. So how you can attach performance back to your advertising is going to change a little bit. Some of the ad platforms have their own attribution models, which a lot of people are working towards. But some of the old school way of doing media mix and how you’re gonna attribute the impact of media, it’s gonna be a little different than what you’ve done before. Some clients, the other big change too is the ability to track what’s called view through conversions. Some clients only track direct conversions, so it’s actual actions somebody had to have clicked on a link and then taken an action. But what cookies enable you to do is also get imp impression-based actions. So somebody saw your ad, didn’t take an action and then actually did something later. It’s more of a reflection of influence. So that is no longer gonna be available. So that will also change the bigger picture of particularly awareness-driven programs of the impact. And then lastly, campaign management. So reach and frequency controls. It’s gonna be a lot harder to try to control how often somebody can see your ad or not. And so a lot of what we’re gonna have to do is look at different tools, what different ways to get to our audiences than we have before and different ways to measure.

Tessa Burg: So how has your team changed their approach to building out campaigns or doing strategic planning internally and what have clients done in response to that?

Shannon Sullivan: Yeah, so there’s kind of two areas in here that are really important. They kind of work together. So the first one on the client side is really trying to capture as much first-party data as you can. That’s gonna be extremely valuable to you. And I think that a lot of people have invested in a customer data platform that allows you to capture all of that information, not only for what you’re doing from a marketing standpoint, but all your interactions. So organic traffic, trade shows, all the different things that you’re doing and use that to connect to sales. You know, making sure that there’s a CRM in place where you’re capturing all your database information. So the more that you can capture and find ways for people to give you their information voluntarily through their interactions with your website or other marketing means is really, really critical. Because we are gonna be able to use some of that information to market. Some of those are really big things, you know, getting a CRM does not happen overnight. A CDP is a pretty big undertaking with a lot of backend work and mapping and schemas and all those kinds of things to really track your audience as well. But they’re really critical to enable some of the things that you’re gonna be able to do through your systems internally to take advantage of the information that’s coming into you. So that’s sort of that one piece. Externally, it’s changing the way that we’re targeting. So there’s still gonna be things like location and proximity targeting. So if you’re doing a lot of localized things or you’re like restaurants where location’s really important, those things are also gonna be available. But contextual is gonna be really important. That is now where you’re serving based on the content on a website versus the behavior of a person. That has really grown, we’ve invested a lot in that with a lot of our clients. It’s worked pretty well. Also, looking at things that are cookieless. So CTV is also a big growth area. There’s a huge growth in video not only on YouTube but also through CTV in general and that is cookieless as well. And also keyword-based things. So you know, search is gonna have less of an impact because it’s mostly keyword-based. We’re gonna even do keyword and YouTube. And there’s still gonna be topic targeting, but it’s just gonna be less specific. So now you could access a third-party list that said something like, people that frequently eat breakfast at restaurants. Like that could be a list that somebody’s gathered and created based on all this behavior that will now be like people interested in restaurants. So it’s much less specific but still valuable. And what we’re gonna probably see, particularly through with Google, is they’re starting with about a thousand topics that those topics are gonna continue to build and get created because of developers and backend APIs and through the privacy sandbox and everything, they’re gonna make suggestions for different cohorts. And those are gonna basically become cohort groups that you can now target and they’ll get more granular over time, but they’re not gonna be as granular as what we’ve seen before because of the cookies.

Tessa Burg: Yeah, so that lack of personalization, lack of granularity certainly is a big disadvantage. But you hit on, you know, people starting to invest in a first-party data strategy and specifically, the tech that can enable that, which is CDPs and CRMs. And that really is something that is going to allow businesses not just to better support their salespeople, so that salespeople can see who I’m on the phone with, but also on the B2C side, allow you to power very personalized communication and digital experiences, even physical experiences at point of sale since the information contained in a first-party data strategy has so much rich detail about who that is and what will benefit them, what they’re looking for. And I think that’s really what cookie deprecation was meant to move towards is, yeah, you still have to think about who is the audience, what’s their interest, what do we want to deliver how are we serving them without encroaching on their behavioral and what they feel is very personal to them, their behavior on websites that simply are not your brand?

Shannon Sullivan: Yeah, and I think, you know, in some ways, you know, we’re gonna have a big change, right? There’s a little bit of an unknown in July. So the big cutoff for this is July and that’s when Google is going to remove third party cookie enablement from Chrome. This has already been happening with Safari for a little while. In January, Chrome started this. So there’s about 1% of traffic that’s already been started. So if you’re pretty invested in programmatic and DSPs and things like that right now, you might have already started to see some contraction of audiences a little bit depending on where you’re serving. But what we really don’t know is how long that’s gonna take to really deprecate. So is that something where on July 3rd, you have absolutely no access to anybody? Unlikely. It’s probably gonna deprecate over time. But I think what that means for your data, what that means for your targeting is a little unclear until we get into July and see what the full bigger impact of all of this is. But what I think over time, we’ll probably see is a better quality of customer because these are people that are willing to give you their information. And this is where I also think content becomes really, really important. And it’s not necessarily the content that you’re using to advertise, grab people into the top of the funnel. It’s the really rich content that people are willing to give you their information for. So I think also in the B2B world where lead gen is much more important, it’s gonna become really important to have content developed that people that you can work with publishers and third parties to offer to people to gather their content and get their information that way. So I think you have to find more valuable ways for people to interact with you and give them something back for them willing to give you their information. And then what that’s gonna help is those are gonna build your lists and those customer lists can be integrated back into the platforms through customer match or working through companies like LiveRamp that match data or doing private deals with second parties where you will share each other’s data and match and be able to do things like that. And that I think is gonna help increase the quality of people because they’re willing to give you their information for something that they find valuable. The likelihood of that being a better customer is probably high.

Tessa Burg: Yes, I agree. And some things that we’ve seen be successful already is thinking of content in all its forms, including community. You know, if you are hosting an experience that truly is customer centric that give people the opportunity to find answers from people like them with their peers and you’re creating this digital experience that adds value to the product or service you’re already bringing to market, that’s an awesome way to start gathering first party information. And then not only that, it’s in a space where you’ve provided security so that when you are personalizing that to them, it’s very similar to first party cookies. They’re seeing the benefit of that use of data as compared to your stocking them and you’re always going for the sale. So, I agree that evolution of content and something I always say is this really forces us to truly be customer-centric. Like I think we say that a lot, but it’s like, now you really have to up your game and be like, but what do customers really want in their journey with our brand? And you know, going back to brand, what does your brand stand for? And are you delivering on the value and the promise of your brand?

Shannon Sullivan: Well, and I think it’s always comes down to like, are you valuable to your customers? Right? And that value takes lots of different forms, but I think that’s really important to think about. And I think that you’ve got to make give people a reason to engage with you and do so in a way that has a return for them. And so like, you know, I think a lot of the time in the past or currently still, a lot of people lead still with creative. Like, it’s the campaign is the number one thing and I think it’s really over the last couple years shifted to be audience first. And it’s more important to think about who is my audience and what kinda content is important to them versus here’s the content I wanna push to whoever I care about. It’s gonna be really important to kinda match those things a little bit more and make sure you’re leading with the audience first. How am I reaching them? What are all the channels? How are we surrounding them? What is the content they’re getting? What’s the cadence that they’re getting from all the different channels? What’s that experience like? And there’s a lot of companies we work with that have people groups internally that their whole job is that customer experience is how are they working together? How many times are we touching them? Is that too many? Is that too few? You know, when they do X amount of touches, we see this better performance. And I think that kind of analysis is gonna be way more important and that’s gonna drive other changes in terms of your channel mix.

Tessa Burg: Yes, I agree. So if, you know, listeners who are thinking about what do I do right now, you know, starting with what is your brand, your business objectives, the value you wanna bring, then look at your audience. And maybe even grade yourself, how well are you living your values and what analysis can you do against that data to better understand the audience? What are some other things, Shanon, that people who might be intimidated by this change or may not even started, what else can they do to prepare for July and after as the cookie deprecation continues?

Shannon Sullivan: So I think one of the big things, a lot of most people have Google Ads, right? I think that’s a pretty common platform for everybody. You’re either using that for search or for display network or YouTube or something like that. There’s definitely things like installing the Google Pixel that’ll really help you with some certain things. It’s making sure that you have all your privacy stuff updated. It’s building out your list so that you can use those for customer match. If you have the means and the ability to go down the road of a CDP and a CRM, I definitely would look into that for long-term success. But I think if you’re not, you know, if you have an agency support or whatever, or make sure that they’re looking at other opportunities that aren’t cookie-based, that they have a plan for what’s gonna happen after this happens where you might shift your dollars into more contextual things or that you may have to invest more in video production, which is actually a much heavier lift if you’re gonna go down the road to CTV, right? Those have to be higher quality videos. So I think assessing sort of the things that you have, the content that you have would be a good place to start. If you’re in the B2B world, I think the conversations with your third party publishers are really important. What are they doing? So how are they adjusting to this? Are you not gonna have the same offerings from them because they haven’t adjusted or have they adjusted and are we gonna be able to do more customized programs or what are those offerings that need to be? I think the big thing too is to think beyond display. You know, I’ll think a lot of times when people just think about advertising, they just think about banners or you know, if you’re in a different world like a broadcast ad or something like that, I think it’s understanding there’s lots of different ways to get to people and not all of those are a display banner, right? There’s tons of different ways and it’s being a little bit more creative, guerrilla tactics, all those types of things depending on the industry that you’re in. So I think some brainstorming would probably be a good suggestion to a lot of people is get your teams together from lots of different perspectives. And I think if you’re haven’t done an audit about where you’re vulnerable, that’s important. I think we’re gonna get into like a really technical topic here where like it’s beyond me, but there may be some adjustments that you actually may have to make to your tags internally to how you’re capturing things in order to be compliant and be able to transfer some data. So that gets really into the technical weeds, but making sure that you guys are looking at that as well. Look at what you have on your website. Like do the audit of all your cookies, what are they? You know, which are the ones that are gonna have to come off and have to be adjusted or where are you gonna be vulnerable and how is that gonna impact everybody else? So I think from an internal standpoint, start with that audit, see what you have, like, what are the things that you’re capturing from people and if you have an agency partner as well, making sure that they’ve gone through that same due diligence of what do we have, what’s impacted, what could we need, what could we want? How are we gonna adjust those things as well. But I think the other big thing I’ll say is there’s gonna be a lot of wait and see. Whatever your benchmarks are now, whatever your KPIs are now, those are all gonna have to change, right? We don’t know what that’s gonna look like exactly. You’re gonna need a little time to let that settle and then reestablish what those KPIs and those benchmarks may be because of this change.

Tessa Burg: Yes. And you hit on something that I think not everybody fully appreciates, but that this change of cookie deprecation doesn’t live in isolation. So it’s coming because of privacy concerns. And then we have this other phenomenon that we talk about a lot, which is AI and ML, which brings its own security risks and other areas where people aren’t sure they don’t trust. Was this created by machine learning? Is what I’m putting onto a website going to be private? Is it gonna be between me and this brand? Or is it being used for something else that I’m not sure of? So when you’re going through this audit, also look at, how do we create trust signals and how do we be very visible and transparent whether it’s in B2B to clients or to consumers that we have security and compliance programs that respects their privacy. Because if you go too far down the path of like, okay, we have a first party data strategy, oh my gosh, we can use first party data to power AI and ML solutions. And if you just start that without recognizing that privacy and security is a major concern of all clients and consumers, then we’re gonna get caught in the same trap. That we’re gonna have to start forfeiting more things that could be good, but it’s always the bad actors that ruin it. And so be proactive about being transparent, about how you’re using that consumer’s data and you know, I keep saying it, but keep it customer-centric. Do it in service of them. And then you won’t go out of bounds.

Shannon Sullivan: I would also say the other thing, and this also gets sort of out outside the media realm, but the tech areas be really versed on the privacy laws and what you have to have on your website. And I think if you don’t have that internally, you need to find a partner, a digital transformation partner that can help you with that. Or there’s definitely companies like OneTrust that it specializes in all this. The laws are so different. So I think GDPR was the big one for everybody first where, you know, there was a lot about how the data was stored and how you had to very specific opt-out language and you know, and that came along from a media perspective. Like we were really diligent at looking at privacy policies and we won’t work with people that don’t have the privacy policy to the degree that we find acceptable, which is probably more than what’s required. But we don’t ever wanna take the risk or put our clients in the risk that we would be working with a company that wasn’t abiding by those rules. However, the big difference with GDPR was that is it’s association based. So if you get fined, the dollars go to the association to the GDPR, you know, body governing body. But when CCPA came out, which was the privacy law for California, that is individual-based. And so it is a $10,000 fine per individual that could accuse you of not having your ducks in a row and you have to pay them as an individual. That creates a whole different level of liability to you and it’s all related to this stuff as well, right? So it’s making sure that you’re really versed in that and that’s gonna come from your technical team and things like that internally. But if you haven’t gone down that road, it’s really important that you get an idea of what’s coming as each state and other countries and stuff that you might engage with have these privacy laws. It’s going to limit you in some things you need to do, but you can’t put your company in a position to be liable in those situations.

Tessa Burg: You used the word “customer match” a couple of times and when we’re talking about data security and getting that, you know, our first-party data and getting as close as we can to making sure that we’re delivering the right message, the right time for that person. Can you tell us a little bit about, what does the term “walled garden” mean? And then what kinds of companies should be concerned with that or what kinds of companies have the opportunity to engage with businesses and do matches in walled gardens? Or should they be creating their own space? This is something that for a lot of marketers of different sizes, they are thinking about privacy and they are wondering like how good of an idea that is, especially when so much is owned by so few.

Shannon Sullivan: Yeah, so the idea of a walled garden is that just like it sounds, there’s a wall up, there’s data that is owned by that company. So I’m gonna use Target for an example. Okay, so Target is a walled garden as well. They have so much consumer information, right? Can think about how many millions of users are on the Target website each day and they’ve amassed a colossal amount of information about their user. So what they’ve done is they then monetized all those visitors and all that traffic to their site and they’ve created opportunities for advertisers to come and advertise to those people, but within the environment of Target only. So they’re totally in control of the data, of the first party data, and you have to use their platforms to enable those ads and you can advertise to their consumers but they have complete control about what you say, how you access and stuff, and they’re not gonna share any of that data back with you. So it’s not as if if that person then goes back out and does something, it goes to another retailer that they can then tell you what happened. It’s all in this walled garden environment. So walled gardens also like Facebook, Amazon is a great example of that as well. And I think, you know, this is really popular in retailers right now because of the volume that people have with online shopping. And so if you’re a big retailer like Walmart, Target and stuff, those are good opportunities for you. But that’s a very B2C focused effort. So if you are somebody that has a consumer product or you’re clothing or makeup brand or something like that, then I think those things are really relevant to you. If you are Amazon’s extended, what you can do there, you don’t have to be manufacturer company on there anymore. Like you can target people within Amazon. But it’s for a certain level of consumers, right? There’s some minimums and things like that as well. I think B2B, you know, you’re really gonna be more in like the Facebook world and some of the types of things and those types of environments for walled gardens and not so much in the retail side, but it is a good opportunity. The key thing here is go where your customers are. So if your customers are there, the walled gardens are gonna be an option for you. If they’re not, then they’re not. And that’s kind of the whole thing about being audience-centric again is following where they are. So I think the more you can understand your customer, and I think this is also for agencies too, is your job is to really understand that audience that your client is going after as if you were them. And that is really going to help you know where to find those people, right? And when you have fewer opportunities. But I think it’s a good option for a lot of people that are in certain segments, in certain certain industries for sure.

Tessa Burg: Yeah. And so it’s secure because the data never comes back.

Shannon Sullivan: Correct.

Tessa Burg: And I think marketing leaders have to understand that, you know? I remember back in the day when I worked in media, you know, we’d even set up cohorts to exchange data. And a lot of times, it was visible and we were, you know, doing a contest together and in the terms and condition it was stated, that multiple partners would be in this chance to win contests, but we would get each other’s data. And that’s very different now. And a new concept has been introduced or it’s not very new, but becoming more popular, which is data clean rooms. So what role do those play now in helping marketers get that more accurate match?

Shannon Sullivan: So this would come into play when we talk about second party cookies and data, things like that. And that’s really the concept of two companies that own their first party data, matching that together to do a deal together. So I think a good example of this would be like a running shoe company and like 24-hour fitness, right? Maybe that could be something, right? And you want to match listings together. So where that data gets matched because you can’t legally give your information to somebody else ’cause they haven’t opted in to that other company. That all happens in a clean room, right? And there’s companies like LiveRamp that enable those types of things. And so that data gets all sort of matched and then you go and execute your programs within that. So it’s important for those types of things, but that’s gonna be pretty specific. Like those are end up being private deals. You can also do that with publishers. So that’s also valuable if you feel like you have a lot of your customers on our particular publisher that you may deal with and you wanna be able to retarget in their environment and only to the people that you already have, that would be a way to do it is through customer match. And so it’s kind of the concept of using that room to match and clean the data so that nobody sees it and so it’s still protected and then you enable it after that point.

Tessa Burg: Shanon, this has been a awesome conversation. I sometimes say awesome too much, but case it definitely applies. Marketers have a lot of options when it comes to different ways to target and engage their customers as long as they stay truly customer-centric and respect why this change is coming, which is privacy and security.

Shannon Sullivan: Yep.

Tessa Burg: If our listeners have more questions, where can they find you?

Shannon Sullivan: LinkedIn. So just look me up for Shanon Sullivan Mod Op, or you can send me an email at [email protected].

Tessa Burg: Awesome.

Shannon Sullivan: Great.

Tessa Burg: And thanks so much for listening and if you want to hear more episodes from Leader Generation, you can visit modop.com. It’s M-O-D-O-P.com. We have episodes on the impact of AI and machine learning, how the search landscape and experience will be changing, as well as more on digital transformation, how your business can prepare to have a first-party data strategy that feeds into sales, marketing, and user experience. Until next time, you can reach me at [email protected] and we’ll talk again soon.