Consumer privacy is leading a wave of significant change in the digital advertising industry. This change is throwing the industry\u2019s foundation into disarray, and the need for sophisticated solutions will put local advertisers at a major disadvantage.<\/p>\n
With $526 Billion in global digital ad spend (by 2024)<\/a> in a state of flux, companies that have either built ad products to drive revenue, or that utilize ad products across their organization are all asking the same question; \u201cWhat will the future of digital advertising look like?\u201d<\/p>\n This article will provide a background on cookies, outline the key events that are leading to this change, explore the future of ad targeting, and explain how CRMs, Portals, Marketplaces, and Multi-location brands can capitalize on their first-party data, an asset that many are calling the new gold standard for ad targeting<\/p>\n On a blog post on Chromium.org<\/a>, Justin Schuh (Director of Chrome Engineering) explains that \u201cCookies allow websites to log your activity, and third-party cookies give that permission to sites other than the ones you’re on.\u201d<\/p>\n \u200dCookies are text files stored in your web browser<\/a> that store an identifier to track your internet usage data. These cookies help determine what ads you see, help personalize website experiences to you, help deliver usage and performance analytics back to advertisers and creators, and more.<\/p>\n In the Chromium blog post, Schuh goes on to say, \u201cGetting rid of them (cookies) will help internet users better protect their privacy. Users are demanding greater privacy \u2014 including transparency, choice and control over how their data is used \u2014 and it’s clear the web ecosystem needs to evolve to meet these increasing demands.”<\/p>\n Digiday.com author Seb Joseph mentions, \u201cthe third-party cookie served as the workhorse of the independent ad tech ecosystem<\/a>. Cookies are how ad tech companies communicate with one another in order to trade programmatic ads.\u201d This statement addresses a major privacy concern that users\u2019 data is being exchanged in the ad tech ecosystem. Removing the cookie and preventing third parties from transferring user data will lead to higher levels of user privacy.<\/p>\n Here are just a few of the major changes that have been announced.<\/p>\n These are three major changes that will change the direction of the digital advertising industry. These moves, coupled with legislation like GDPR (General Data Protection Regulation<\/a>) and CCPA (California Consumer Privacy Act<\/a>), will create a new landscape that the entire digital advertising industry will need to adjust to.<\/p>\n These moves against cookies have a significant impact on the digital advertising industry. Here are a few examples.<\/p>\n According to Marketing Land and eMarketer, 70% of all digital advertising spend goes to three companies, Google, Facebook, and Amazon<\/a>, and each company in this trio is large enough to create their own advertising ecosystem. The future of these ecosystems may include their own unique method of identifying users and transferring user data, whereas the cookie depended on web browsers and third-party ecosystems.<\/p>\n The innovations and standards that these companies create will pave the way for the future of digital advertising. This change may force advertisers to merge their first-party data with publishers to have reliable ad targeting, thus adding to the already complex world of digital advertising.<\/p>\n Channels, such as Facebook, have already started to move toward a server-to-server (S2S) method of exchanging user information<\/a>. Cookies are known as a \u201cclient-side\u201d technology because personal data is stored on the client\u2019s (or user\u2019s) browser. Server-to-server is a \u201cserver-side\u201d technology, where the data is transmitted at the server level directly.<\/p>\n Server-to-server offers a level of security that cookies can\u2019t compete with because there is no data stored client-side. However, users still have the ability to opt out of the use of server-to-server as required by GDPR and CCPA laws. Another benefit of server-to-server is it\u2019s the most efficient way to transfer data because it eliminates any latency created by the user\u2019s web browser.<\/p>\n Additionally, server-to-server allows advertisers to pass data, such as lead or click quality information, back to the ad server. Cookies are limited to data that is immediately available from actions taken on the website or mobile app and won\u2019t be able to match the sophistication that server-to-server makes available.\u200d<\/strong><\/p>\n Cookies help identify users across the websites that they browse and through the applications that they use. But for the trio dominating digital advertising (Google, Facebook, Amazon) this is not necessary due to the massive amount of people who log in to their apps every day.<\/p>\n For example, if you are one of the 1.8 billion people who use Gmail<\/a>, odds are you stay logged into your account as you surf the net with Chrome. Or, if you’re one of the 2.7 Billion people that use a Facebook<\/a> product once a month (Facebook, Instagram, Whats App), then Facebook won\u2019t need to rely on a cookie to ensure you see the right ad, or customize your experience within their websites and applications, because you’re logged into their platform and the ads and experiences are happening within their domain.<\/p>\n Related Read<\/em>: The massive opportunity found in traditional media\u2019s dominance in local advertising. <\/a><\/p>\n The more sophisticated digital advertising becomes, the wider the adoption gap is for local businesses. National advertisers, for example, will have an easier time taking advantage of techniques created by innovations such as server-to-server.<\/p>\n Due to national advertisers’ supremacy in digital advertising, local businesses will find it harder to connect with their customers and audiences through digital advertising channels. Local advertisers will continue to turn to their more advanced technology partners or corporate offices for help competing for local customer acquisition.<\/p>\n As the cookie and alternative forms of user identification become obsolete, popular ad targeting capabilities that use third-party data will be greatly affected. Companies harnessing the power of first-party data through sophisticated advertising programs will have an extreme competitive advantage. Also, the companies that create these sophisticated advertising programs, powered with first-party data, will create attractive revenue opportunities.<\/p>\n First-party data refers to data that you collect directly from your customers or users. For example, if someone fills out your contact us form on your website and sends you their email address and full name, this is considered first-party data. Your website audience is also considered First-party data.<\/p>\n Third-party data is data that you purchase or acquire from, you guessed it, a third party. In the world of email marketing, if you purchased an email list from a vendor, the email list would be considered third-party data.<\/p>\n CRMs are treasure chests full of first-party data. Not only do CRMs have thousands of users that input first-party data into the system (in the form of lead and customer contact info), they also organize the data into categories, pipelines, and industry lists. Using this type of data input, a sophisticated digital marketing system can automatically create local and global digital advertising audiences to share with their users. A feature like this can be used to enable users with powerful digital advertising tools. In doing so, giving the CRM a new feature to attract new business, and increase the lifetime value of its users.<\/p>\n We have also seen a trend that CRMs and Marketing Automation Software providers (take BoomTownRoi.com<\/a> for example) enable users with website builders. This gives the provider access to another powerful form of first-party data, website audiences.<\/p>\n CRMs, Marketing Automation Software Providers, and Website Builders all have an extreme advantage in digital advertising\u2019s cookieless future.\u200d<\/em><\/strong><\/p>\n Portals and Marketplaces attract first-party data by their ability to bring buyers and sellers together on the same website or application. First-party data from website signals, orders, and user-generated content create the perfect environment to build a unique ad product.<\/p>\n Local and national advertisers who take advantage of these unique offerings will have a leg up on their competition. In addition, Portals and Marketplaces that make their first-party data available through offsite ad programs will become an indispensable resource for sellers and advertisers.<\/p>\n Market Reach, a product offered by Realtor.com<\/a>, is a perfect example of this type of offering. Realtor.com gives Real Estate agents the ability to reach home buyers in their local market by accessing the exclusive audience created by Realtor.com\u2019s first-party data. Agents gain a powerful advertising tool, and home buyers and sellers are exposed to local experts to help them in their real estate journeys, it\u2019s a win-win-win!<\/p>\n For Multi-location brands, capitalizing on their first-party data advantage means enabling local offices to launch campaigns with localized versions of national audiences. However, local offices are at a disadvantage due to the expertise, technology, and resources needed to execute programs with this level of sophistication.<\/p>\n The right technology platform can reduce the complexity of launching programs and enable local offices to quickly and efficiently launch these types of campaigns.<\/p>\n Related:<\/em> National-to-local marketing: How can the implementation of an operating model make or break your distributed marketing strategy <\/em><\/a><\/p>\nThe Future is Cookieless<\/h2>\n
Why Are Cookies The Focus of Privacy Concerns?<\/h3>\n
The Industry Moves Against Cookies And Other Methods Of Personal Identification<\/h3>\n
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3 Ways Removing Cookies Impact Digital Ad Targeting<\/h3>\n
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The Future of Cookieless Ad Targeting<\/h2>\n
The Dominant Trio (Google, Facebook, and Amazon)<\/h3>\n
Server-to-Server (S2S)<\/h3>\n
The Login Advantage<\/h3>\n
Another Disadvantage for Local Advertisers<\/h3>\n
The First Party Data Advantage for CRMs, Portals, Marketplaces, and Multi-location brands<\/h2>\n
What\u2019s The Difference Between First Party Data And Third Party Data<\/h3>\n
Why CRMs, Portals, Marketplaces, And Multi-location brands Are In Prime Position<\/h3>\n
Use case for CRMs<\/h4>\n
Use case for Portals and Marketplaces<\/h4>\n
Use case for Multi-location brands<\/h4>\n