I recently spoke with David Moore, CEO at BritePool, who used the fable of the slowly boiling frog to describe the current mindset in ad tech.
“If you drop a frog in a pot of boiling water, it will of course frantically try to clamber out. But if you place it gently in a pot of tepid water and turn the heat on low, it will float there quite placidly. As the water gradually heats up, the frog will sink into a tranquil stupor, exactly like one of us in a hot bath, and before long, with a smile on its face, it will unresistingly allow itself to be boiled to death.”
A major threat to the ad tech ecosystem is on the horizon. We’ve been using the same web technology since the ‘90s: HTTP cookies. These are anonymous IDs set in a consumer’s browser that enable audience targeting, data trading, measurement, attribution, and frequency capping for the open web.
But major browser makers like Apple, Google, and Mozilla are making changes to block the use of these cookies in ad tech. When combining the market share of these three, the result is that more than 90 percent of the browser market would be untargetable and unmeasurable via cookies. I’ve been shocked that many of the brands, agencies, publishers, and tech partners I speak with are only casually acknowledging this change.
Why block cookies?
We will continue to see trackability of browsing behaviors via third-party cookies shrink until the measurable audience is negligible — resulting in a constant cat and mouse game where we build workarounds to cookie blocking technology, which isn’t the solution. There will always be another upgrade that blocks a workaround. For example, Apple just released news of its newest update, ITP 2.2, a much stronger version of ITP that also deletes a publisher or advertiser’s first-party cookies in 24-hours. Simply stated, if you use technology systems that rely heavily on cookies for data distribution, measurement, attribution and analytics, your business will be disrupted.
Google, Apple and Mozilla are simply responding to what consumers and regulators are demanding of them — and consumers are right to ask for more control over their own data. The good news is that the evidence shows consumers will respond positively to better information, controls and incentives. In the EU, dataxu is observing a fairly steady 10 percent opt-out rate for use of data since the launch of GDPR regulations. If we are to extrapolate this real-world data about consumers in the EU, it implies that a very healthy 90 percent of the market remains open to data use with reasonable controls in place. Even if this 90% projection is incorrect and the measurable portion of the audience is smaller, advances in inference-based methods can be used to fill in the gaps and provide statistically accurate performance and reach analytics.
If you’re an agency, brand, or publisher, what should you do?
The good news is that tech companies are adapting amidst this disruption and will find new ways of targeting and measurement that are compliant in this evolving landscape. At dataxu, we designed a technology called OneView™ that manages many different ad IDs, and other companies are pursuing similar alternatives – check them all out and do your homework – you need to really understand this, as it’ll be critical to your career in ad tech and help your company beat your competitors.
Get out of your comfort zone and get into test-and-learn mode. Start investigating and experimenting with the many companies who are working on solutions for consented alternative IDs like BritePool, AirDXP, DigiTrust and others. Demand greater adoption of these kinds of technologies from your tech partners.
Be fully aware that the changes are going to create disruption and chaos in 2019 and the next few years. You need to be working with technology partners who are ready to adapt to these changes so that you can rapidly switch to the winning technologies or mix, match, and performance test as needed. Don’t get locked into one proprietary solution.
Ask your partners more questions like:
- What is your plan to adapt to a post-cookie world?
- Is your platform configurable to work with many different identity systems, or is it locked in on only one ID solution?
- Does your platform provide methods to translate between different ID schemes to correlate your analytics across all forms of marketing?
- Does your platform enable alternative ID solutions for frequency capping?
- Do analytics like audience sizing and inventory forecasting work with an audience built upon alternative IDs?
- Are the alternative ID analytics provided in real time or are they batch one-off processes provided post hoc?
- Are modeling techniques available to fill in the gaps were measurability is impossible due to opt-out or other technical reasons?
Agencies, advertisers and publishers need to jump out of their hot bath before it kills them. 2019 will be a major year of change in this industry. If you’re not in test-and-learn mode, you’ll boil.