The impending changes to the digital ecosystem and the way that brands connect with consumers is set to fundamentally shift the relationship between marketers, advertisers and clients. In the first part of a three-piece series, we look at how changes to online tracking is impacting the agency world, and how machine learning through Discovery Commerce can grow business as consumers move to e-commerce in droves.
“The world has crumbled multiple times in the last 10 years. We are always faced with different and new approaches, yet I'm pretty confident that even this time we're going to find the solution.”
That is the upbeat take from Matteo Resta, regional business director, OMD APAC, when asked about the impact that impending changes to things like cookies will have on the industry.
As he rightly points out, a lot of things have changed in the past year for everyone in the industry. One of the biggest changes facing agencies as we head into 2021 is undoubtedly the death of cookies, as browsers like Apple, Safari, Mozilla and most recently, Google Chrome, announced that they will phase out third-party cookies in the next two years.
With that goes the ability to track website visitors and gain insights that help target ads to the right audiences and learn about what visitors are checking out online when they aren't on specific websites.
According to Resta, cookies are a good way to source data, but some marketers have become guilty of relying too heavily on them and now need a reset.
“Cookies are and have been a very good proxy for us to find scalable and precise data for the past 20 years. But I think that right now we need to shift the equation to think about what kind of insights we have and how we expand from that rather than the other way around,” he says.
What does the future hold?
Chantal Penning, a product marketing manager at Facebook APAC, points out the new data-driven way of advertising is far more sophisticated than the old ‘spray and pray’ technique of putting large display campaigns online and hoping to reach at least some of their target audience.
“A lot has happened in the last few years where advertisers have become a lot more data savvy,” she explains. “They understand how they can use available data and provide more personalised experiences for consumers in the form of the right message during the right phase of that user journey.”
The loss of cookies will see more marketers reach for first-party data to fill the void, but Penning warns consumers are also becoming more data savvy, and marketers need to start taking that into account.
She adds: “We shouldn't underestimate that consumers are starting to understand more and more about how advertisers are reaching them, and also that their online data might be used in ways that they do not fully understand.
“A study done by Tealium revealed that 97% of consumers say they are somewhat or very concerned about protecting their personal data. It's one of the many reasons why Facebook has taken a number of important steps to give consumers control over how their private information is used.”
YC Ng, COO and co-founder of Malaysia-based SearchGuru, says the industry can predict what a permission-based future may look like by looking at the loss of marketing attribution when sites became required to ask permission following the roll-out of Apple’s Identifier for Advertisers (IDFA).
“According to a survey done by Search Engine Land, only 23% of the respondents said yes to allow permission for app tracking services, whereas the other half said no and that they needed more information,” he explains.
“It's safe to say that roughly 50% of the marketing attribution from iOS and Apple users were lost when the IDFA was rolled out.”
Clearly then, there will be a large gap for agencies to help advertisers overcome when these changes come in.
People-based environments > Cookie-Era
In the post-cookie world, finding the right audience is going to become more complex. Marketers and agencies can take a page from how platforms like Facebook empower businesses of all sizes by leveraging data and machine learning to achieve better results.
Penning notes, “One of the reasons Facebook is so effective for businesses large and small is our ability of using delivery systems to find people who are relevant to a product or service that an advertiser offers.
“The speed and the accuracy of machine learning algorithms not only help to provide highly personalised experiences for customers, but also help to increase the return on investment or ROI for advertisers.”
Penning says Facebook’s Conversions API product is one way they’re helping clients strategically plan in light of these upcoming changes.
She explains: “Our Conversions API product uses a direct server-to-server connection and helps advertisers share data that is currently captured by Facebook Pixel, along with other data that can build a better picture for targeting. The data is sourced directly from the advertiser server and does not rely on browsers or any other third parties. This makes advertiser data sharing less likely to be impacted by browser changes, while still being able to honour users’ privacy choices and maintain performance.”
Ng says agencies can add value here by providing a human interface and filter to ensure that the best possible parameters are in place for machine use. In order to do this, organisations need to invest in training for teams.
He explains. “We start with the creation of the campaign structure, then plug in the geography, placement, user intent and objective. Then turn the campaign over to machine learning and allow it to find a common pattern that drives performance.
“Breaking apart the campaign from the beginning gives us more information that we wouldn’t have otherwise, and this provides no intrusion of privacy, and minimum risk of losing our performance due to the lack of cookies.”
Resta notes that platforms requiring consumers to log in have the ability to establish a deterministic connection with these very consumers by leveraging that log-in data to make meaningful decisions. Agencies should follow suit by putting the consumer at the heart of the equation.
“A lot of other agencies will be focusing their attention and efforts in trying to build people-based environments, which don’t rely on cookies. A lot of our attention and efforts have been gravitating towards collecting first-party data for our clients, but also trying to find a really meaningful way to categorise this data into meaningful taxonomies,” he says.
Proactivity, profitability and first mover advantage
The challenge for the market will be to redefine how they use contextual data — taking a more sophisticated look at the data for insights on how people are behaving under different circumstances.
Penning notes that even though these changes may seem far off, they will come quicker than most people think.
“Some of our advertisers don't see the urgency to respond to the ads ecosystem changes. Yet we’re seeing a real opportunity here for early adopters to get ahead of the curve,” she says.
Looking ahead, Resta says the best practise for marketers is to start early in securing their digital ecosystem. Those who began early will already have a market lead.
“In order to start building your digital acceleration roadmap...it starts by connecting the dots, and maximising the most valuable data that we can tap into. Obviously, first-party data is a very big component of that, no matter the category or the level of digital readiness for our clients,” he notes.
In the long-run, the demise of cookies will likely prove to be a boon to the industry and consumers. It will improve transparency and pave the way towards a new standardised way of data collection, and encourage advertisers to utilise machine learning to take the lead to better identify their target markets. It may even help them expand their consumer base by tapping into the pockets of people they would have missed previously through traditional targeting approaches.
These are exciting opportunities for agencies to redefine their offerings and move towards a more consultative way of working with their clients who will be looking for expert guidance.
Ultimately then, the death of the humble cookie will see the rise of best-in-class agencies, and will push them even higher up the value chain.