Why is AdTech in Chaos?
There are tons of changes in the world of Media, AdTech, and Digital. We all know things never stay still for very long. But why are people worried about these changes bubbling up in the news? Let’s start off with: why is AdTech in chaos?
To boil it down, we are in a Techpocalypse. The fundamental mechanisms powering AdTech are evolving. And because those fundamental mechanics are completely changing – to the point where we are unsure what they will look like – how useful are they going to be?
The two main components in AdTech we’ll talk about are:
- Third-party cookies primarily used for tracking users at the browser level
- Mobile ad IDs (IDFA is Apple’s version of that, which is used to track users at the app level)
Ultimately, this chaos is a good thing. It’s chaotic for everyone, but there are good intentions behind it, at least from the regulation standpoint and to a degree, big tech being required to increase transparency. Requiring them to answer questions for consumers on what data is collected, whose data is being used, and how it’s being used.
No one can argue these are important and good intentions. But it is causing a huge ripple effect for local retailers and marketers, who are already struggling. And they will continue to struggle for the next few years, regarding targeting their audiences.
Targeting is a fundamental capability of AdTech. People pay a premium to target that right user, but it is becoming more difficult and the road on how to continue to target is unclear.
Third-Party Cookies vs First-Party Cookies
You may have heard the terms “third-party cookies” and “first-party data”, as they are thrown around a lot. So, what is the difference between third-party and first-party cookies? How are they different? How are they collected and utilized?
To boil it down, a cookie is a small data file a web server uses to remember a user.
A first-party cookie would be a cookie set and stored by the website publisher itself.
Example: you’re shopping for clothes online, you’re looking at a new pair of shoes on a website and adding them to the cart, but then maybe you close the webpage and do something else without checking out. You hop back on that web page later in the day, your cart is still there with those shoes you were going to purchase.
That is a first-party cookie. The technology is only used for activity and remembering users within that specific website. First-party cookie technology isn’t going anywhere.
On the other hand, third-party cookies are where things get more complicated. It’s a cookie set and stored on that site by a third-party provider, usually an AdTech company.
Example: You’re on that shoe website, being tracked by the first-party cookie, but you’re also tracked as you visit other websites across the web. Then that cookie data of you is sold to marketers who want to target people in the market for shoes. Because they buy that cookie audience, they can serve you an ad.
This is the technology going away. Browsers are no longer going to support third-party tracking across websites.
To recap, first-party is data you own and control, which is great data to have. And third-party is collecting data and selling it to other advertisers, who then use that to continue advertising to other people.
So, what about the cookie apocalypse?
General suspicion over third-party cookies has been building. Those in the industry began questioning the technology’s validity and if it really is a unique identifier for individuals.
The fact is, it’s not really. Its capability isn’t spot on either. Third-party cookies are sometimes wrong and are, by no means, the best way of tracking.
A brief timeline:
2016 - GDPR (General Data Protection Regulation) was passed in 2016. It is a regulation in EU law on data protection and privacy.
2017 - the browser Safari blocked third-party cookies by default. Then, there were more high-profile data leaks. A few companies were found to be accidentally mishandling consumer data and very private information. Which was just out there on the web. Then, something big caught a lot of headlines: Cambridge Analytical scandal - misuse of Facebook data.
2019 - at FullThrottle, we created a completely cookieless tracking technology called ZeroGraph, right around the time Firefox blocked third-party cookies by default.
2020 - CCPA (California Consumer Privacy Act) went into effect, which was the United States response to GDPR (Europe).
Present - Now, we have the web browser (Google Chrome) with the lion's share of users out there saying they won’t support the tech anymore. Compound this with Apple's update hitting this past spring; iOS 14.5 limited the ability for IDFA to track. The update brought the opt-in to the app level and asked for explicit consent using language that could discourage a large proportion of users.
To look into the future:
Marketers are going to need to build pivot strategies.
Anyone who relies on third-party cookies has a grace period as Google extended its deadline to 2023. But eventually, support for third-party cookies will end. So, there must be pivoting. Additionally, more states will pass legislation inspired by CCPA and GDPR, to protect consumers and their data, because that is the ultimate goal of a lot of these stakeholders.
To sum up:
Consumer trust has been broken, Congress and big tech responded to legislation, and the marketers are forced to pivot. For us on the marketing and tech side, how can we do what’s best for the consumer? How can we remain completely compliant, but also deliver to advertisers the tracking experience they rely on?
Let’s backtrack slightly and discuss those legislations.
What are the GDPR and CCPA?
Essentially, they are legislations with the goal of providing more transparency to consumers about how their data is used. It mandates companies will have to change the way they use and sell consumer data. They will also need to tell the consumers what is being done with the data, very explicitly, with easy opt-out options. It can become very nitty-gritty, but the goal is for more consumer transparency and to make it easier to opt-out.
For media companies using digital advertising, you might be wondering how to have a successful business amid this chaos. What do you do moving forward? What’s the next thing that’s going to take over?
We wish we had the answer for you. We do feel we are getting closer to a solution, but because AdTech is in chaos, the path ahead isn’t entirely clear. There are a lot of different options. We want to stress to our readers and for anyone else thinking about this, any one solution that gets as big as how mobile ad IDs and third-party cookies did, they will be under increased scrutiny. We do not believe it’s going to be one solution.
However, we can confidently say that first-party data is going to be the new gold standard.
As a company, brand, retailer - collection and managing your first-party data is something you should already be doing. If you’re not already, you are multiple steps behind. It’s paramount. We can be on the walled gardens, Facebook, Google, etc., pushing their own systems in a way where maybe you can collect data and use their tech. The walled gardens have a massive amount of first-party data. But those audiences are sequestered within those walled gardens. As a retailer, you want to make sure you’re not putting all your eggs in one basket, especially a basket you can’t access outside of their rules.
And to that point, who wouldn’t rather have their own data that they own, control, and activate when they want, however they want, to never be de-platformed. If you own your own data, you are in control of your own destiny. If you’re thinking about things in the right way, it’s important to recognize data is a currency, especially if you own a brand and you are advertising.
Not only is it a currency, it’s a lifeline
And a direct connection to make marketing dollars work as hard as they can and should be worked. It’s the only thing that really helps target as efficiently as possible.
If you own your own audience, you’re starting from the point of taking that audience wherever it needs to be. It’s your currency, but it’s a wildcard currency, where it can become what you need it to be, depending on who you’re integrated with, how you’re trying to activate it, and what your end goal is.
There is so much power in being able to activate data. In this space, people talk about data all the time, but they don’t do a great job of saying what they’ll do with it, how they’ll activate it, and how they’ll put it to use for their clients businesses to succeed.
Something we say at FullThrottle is your data is useless without activity – without putting it to use.
Acting on your first-party data
You might be thinking, with the cookiepocalypse, there’s nothing we can do. We’re stuck. We must use first-party data. How in the world am I going to do this? What are my options out there now, to collect my first-party data, to build audiences?
The short answer: FullThrottle is here to help.
The longer answer: FullThrottle is here to help, but there are a ton of options out there, all with varying degrees of capability, and all are not created equal. There are going to be solutions that exist now and even going back here briefly, some of these solutions might not even exist in the next year.
To start: own your own audiences.
But if you’re a local retailer, where do you go from there? With all the chaos, looking at it from the perspective of doomsday prepping isn’t exactly the most productive way. Begin to think of this as more of an opportunity.
As a retailer, there are a lot of different partners out there. Some of which you might have to stitch different solutions together, things that might not totally integrate, but you’re forced to do so because you want to activate a certain way.
FullThrottle’s AdTech Solutions
FullThrottle has solutions in the identity resolution and the media activation realms we can help retailers use. We can help brands - with a one-stop-shop for a few of these tools - go into the new world. To briefly touch on them, thinking about the future of AdTech, how does one succeed? Owning your audience is the starting point. ShopperSuite is an excellent tool for this, where we can do end-to-end household-based identification of anonymous website visitors. We can help retailers and brands move beyond just their leads.
As you are managing these audiences and collecting data, you need to be 100% privacy compliant, especially as the legislation increases. The legislation is not going anywhere. In fact, it’s only going to become more complex. So, you need a partner that can manage, activate, but then on top of all of that, maintain complete privacy compliance the entire time.
Imagining having all of that in one platform, all stitched together.
Building an Audience
We believe the number one thing a business or brand can do is build an audience. To build the audience you own, control, activate whenever, and best of all, no one can take from you. With our software, you can take your first-party data and upload it into your other marketing tools to improve your ad campaigns and media buys.
When you own your data, the possibilities are limitless. It just depends on if you need multiple integrations to stitch it all together. But if you have a solution like FullThrottle, that does all the legwork for you, you’re already leagues ahead of everyone else.
Additionally, if you’re using your own first-party data – the people who came to your website to look at your products or services - those data points are real-time shoppers. These are people that are looking for what you are selling. If you’re going to make those buys or create those audiences, what better data is there?
Our industry has bought lists – we've all bought third-party data. We’ve scrubbed it. We’ve gone through it. Most times, it’s not great. But if you have actual data of people coming to your site that want what you’ve got – think about how powerful that is to have in your hands.
Let’s break down how powerful this really is:
From a digital standpoint, there are a lot of data sets out there used for intelligence but are vastly different in how they’re sourced and what those data sets look like. Especially if you’re a big brand trying for a local and want to get granular with your local executions, national data set won’t cut that.
Even if you’re a local brand, your competitor’s data set or an aggregated data set from everyone in the market, is not indicative of your customer base. There are a lot of nuances to every single brand and every single retailer.
So, you do need a tool that can take those audiences and use that as the true starting point. If you’re going to use a lookalike modeled audience, it’s the smartest modeled audience that ever could be for you. If you’re targeting one-to-one, it’s your actual customers.
To wrap up:
Yes, it’s chaos and it can be potentially overwhelming, and it seems like there is a lot going on.
But it’s the best opportunity for brands and retailers to grab market share because of the changes that are affecting everyone. It’s affecting the big guys; it’s affecting the little guys.
So, if you make the right moves, you make the right partnerships, you can succeed. Brands and retailers can succeed and gain market share where others are going to lose it. Others are falling behind in the tech; they’re not building their audiences and getting the right connections in place. However, amid the AdTech chaos, there really is a true opportunity here for market share.
Who knows what the future brings? All we know is that it is vital for brands that want to stay relevant and want to grow into the future to keep up and make sure to have a solid understanding of these changes in the AdTech world.
FullThrottle can help you navigate this chaos. With our proprietary, patent-pending, cookieless technology, ZeroGraph, powering our entire product suite, your business is sure to be future-proof. To discover more, schedule your demo here.