Clubhouse Session: March 25, 2021
Deer in Headlights: Google’s Driving an Advertising Overhaul 🚫🍪
Jim Anderson- SocialFlow, CEO
Sarah Fay- Glasswing Ventures, Managing Director
Jeff Minsky- MediaVillage, Lead Industry Analyst
How can we rebuild the digital advertising ecosystem to ensure brands get what they need + publishers can provide it. . . w/o cookies? This fundamental change is coming SOON– so let’s discuss.
We know not everyone can access Clubhouse sessions, so we’ve put together a recap of some of topics covered in the session:
This is one of those slow-motion train wrecks. This has been coming for a long time. It’s not new news that Google has planned to disable the cookie. It’s just that they’ve fed it now enough times that people realize that this probably is true and is going to happen. That said, it’s probably also still not going to happen overnight. So there is a little bit of time to figure this out.
The Up-side of Cookies
The type of targeting that cookies allow sometimes really help the end-user. So, you want to be remembered by certain marketers and, it does make it easier for you if you’re a known subscriber in some cases or a known customer. And a website can go directly to your interests.
We don’t necessarily want to undo that. I think that a lot of people would just like to either be in the know about it, be in control of what happens, and perhaps be able to share in the economics. And there are a lot of technologies afoot that are helping people tune into the fact of how their data is used and giving them some control over it. I think for a lot of people if a marketer said, is it okay if we use your data, we’ll give you a 15% discount or is okay if we use your data, we’ll give you insider knowledge relative to the general public, people would say, okay, I’m willing to make that trade.
The Power of First-Party Data
There’s sort of the rise of marketers getting their arms around first-party data and trying to enrich that data and understand more about their customers with their consent and to try and have that be a real volume kind of exercise. I mean, if you look at Google or Facebook, they have more first-party data or Amazon, more first-party data than anyone and that’s what makes them so powerful.
We're Addicted to Cookies
What do you think about this whole cookie change? Good, bad, indifferent? Who wins and who loses here?
I think it is good. We’ve, over the past decade, recognized that cookies are not just about selling product and the ramifications to society overall have to be taken to account. And, of course, we’re always myopic in our marketing perspectives, but at the end of the day, the good of overall society versus selling another pair of sneakers has to be taken to account.
I love data, but my starting point with data [inaudible 00:09:31] or just bought my client’s products versus going to try and find every kind of nuance of which audience person is going to want to find it. I do believe that we got overly addicted to cookies and lost sight of what I saw over a 25-year career looking at digital media reports, that told me sort of the same story over and over again, about 80% of the time and that was the contextual relevance, low clutter environments and larger ad units that had a strong call to action was the formula.
It’s those types of placements that worked best 80% of the time and converted not only on backend-conversion but also on brand metrics and awareness and attribution. So when we got down to this world of this kind of lobbying and response, every time somebody saw a report on clicks and then, we started optimizing by the wrong KPIs. So I think getting out of the cookie world is not a bad thing because the word I’ve heard used more often now over the past two months is people are trying to grapple with what’s next is the word context.
Context Rises Again
So I think getting out of the cookie world is not a bad thing because the word I’ve heard used more often now over the past two months is people are trying to grapple with what’s next is the word context. And I’m like, yeah. That’s what reports have said works. So now that we get back to some sort of world of context married, and again, I’m not anti data, but I am about using that data in the context of what we have learned over and over again since the digital era began.
And context is hugely important too. It always has been even for the world of clicks, I think has sometimes been counter-intuitive as to what, what really works. And I think that the more sophisticated models have migrated toward marrying context with the data.
Weaning off of Bad Data Practices
I think there’ve been a lot of bad practices being utilized in tracking.
And I think that just like any new child who gets a new toy and tries to find all the very different ways to be able to play with that toy, well, in the scheme of things, digital really hasn’t been around that long. And the toolsets that we’ve had for delivering audiences and delivering and targeting haven’t been around for that long, and we’ve been playing around and that’s there, that’s 100% there, but we’re learning and we’re getting the feedback and consumers are jumping up and down. And certain states like California and Virginia going, no, you can’t use that data.
And we’ve got to find ways to actually get there, but never forget and this is the number one thing that we should have done all along, it’s what marketing is based on, an old David Ogilvy quote, “The consumer’s not a moron, she’s your wife.” First and foremost, we have to remember to respect the consumer. And, I don’t think consumers are anti-brands. I think they want to engage with brands that they love. I think, especially when they’re at that lower end of the funnel, and they’re about to make a purchase decision, I think that’s an incredibly important time.
But at the same time, we have gotten so hyper-focused on that lower funnel. So we’ve forgotten that most of us think highly of brands from a few places, from the lifetime of exposure to great creative advertising, from the idea that a brand experience, whether it’s in-store or customer service or CRM, all contribute to this. There is no one attribution point that makes or breaks the decision. It’s a collection of experiences and exposures that really drive the value of a brand. And, again, we’ve been enamored with what data can do because, for the first time ever, we actually had access to this humongous resource, it’s incredible resources, but we forgot the core of business brand and that is respect the consumer, make them love your product.
We have to be careful about not over-targeting consumers based on behaviors in the background, but we do have the opportunity to use data to really give consumers what they want to. And I think to that end, a lot of people are thinking about permission-based marketing, asking consumers what they want.
And that permission base respected the consumer and that’s a hundred percent where we should be headed. Absolutely.
So to that and I think that’s why there is this trend afoot of marketers getting their arms around their data, really trying to understand attributes about who is in their database, being able to enrich that potentially by asking people questions, not just connecting the dots between the data to know more about who their customers are, but actually reaching out to them and asking them to participate and tell them things about themselves.
Again, I think that marketers have the opportunity to ask people if they’re willing to share their data, because if you’ve made that deal with a provider and then it’s targeting you, you say, hey, I made that deal and I’m getting 15% off because of it. So I don’t mind.
Is My Digital Assistant Eavesdropping?
Jeff, I want to go back to what you said about the idea that your digital assistant is listening to you because I hear that a lot. I must’ve had a dozen conversations with people and obviously, you’re a very sophisticated ad industry veteran, you know how this stuff works. Most of the people I talk with, it’s not their profession. And so it’s all just sort of creepy and feels invasive.
I don’t really think they are listening. At least I’m not aware of a product that they’re offering that will have kind of spying and then allow you to re-target on what they heard, that’s not happening. And what is happening, what I think is interesting is that it’s probably the fact that I would post whether on television or through a banner ad or through a pre-roll video to a Kalahari at some point in the two to three weeks leading up to this and I was talking about it.
And then the fact that I, and it was subconscious, I didn’t recognize that I had that exposure as much and it became top of mind. And then all of a sudden that feeling of coincidence, but that’s really the issue. It’s the issue of perception. It’s the issue of what is the consumer perceiving this and as we get more and more sophisticated with the types of targeting that we can do, how are we just watching the guardrails to make sure that we’re not over frequenting the consumer, we’re not doing things that would make them think that we’re doing a bad thing in their mind.
Realizing the Value of Consumer Data
But I think what we’re dealing with now, especially after what we’ve gone through in Cambridge and everything that’s gone on over the past five years is a heightened sense amongst consumers in particular, at a moment where for many consumers, because of the pandemic, they are hurting financially.
And if you recognize that my data has value and I believe consumers in mass are really starting to grasp exactly, they may absolutely be willing to make that trade-off, but it’s going to cost the market a lot more to use that data.
Winners & Losers
I want to take a step back to the winners and losers’ question. As I said, I think Google is in many ways right in the change they’re trying to make because consumers want and need it, and the industry has gone too far, but they’re also incredibly self-interested, right? And, and they’re going to benefit, I think any reasonable conclusion would say Google is going to win in this outcome, and also, Facebook and probably Amazon are going to win too.
I mean, and so is this change, which is being made in response to real problems and real consumer desires, just going to make the rich richer? And now we’re in a world where the only people who win are the big giant tech platforms and everybody else is effectively a loser?
It definitely makes the walled garden walls higher, because marketers can still benefit from all the same things within those ecosystems that they would have done using a cookie across sites. So, I do think that Google wins in doing this. It’s hard to say what their motives are. It could be just fending off the FTC, and the antitrust. I think that this might provoke antitrust, their power in the ecosystem in doing this hobbles so many companies that it’s a question.
The Facbooks and the Googles and, et cetera of the walled gardens, there’s no question that, I think that the cable operators, in particular with NBCU, Comcast, and Sky, they just had that announcement this past week, which I covered on Media Village. They’ve got the distribution, they’ve got the content and it’s all first-party data for them. And in particular, in addition, they’ve got physical locations, like the Universal Studio theme parks, where they can get your transaction credit card data as well. And that becomes first-party data to them. So there are other players besides just Google and Facebook that will win from this.
The Rush For First-Party Data
But there’s no question, as Sarah mentioned beforehand, it’s the brand’s first-party data and it’s the media companies that have scaled strong first-party data that are going to move forward, and it will be tougher from a data perspective, from a targeting perspective for those mid-tier to lower tiers. And that’s again, where I hope the industry continues to blend the idea of audience targeting and programmatic with still establishing one-to-one relationships and managed service with smaller companies to help them grow, to help them rise and understanding again, that context is still a key point in putting together plan.
Well, it does seem like and you’ve mentioned a couple of times the first-party data and the marketers and how they’ll respond, so it seems like it’d be a great time to be investing in customer data platforms that are sold to marketers.
First-Party Data isn’t Immune to Misuse
I can’t help but wonder though if by doing that marketers won’t once again, go too far.
So, yes, because I visited your theme park or I did something and I gave you permission, that’s fine, but my expectation is a consumer isn’t necessarily aligned around, I’ve given you that in perpetuity, right? What’s the refresh. How often do I have to give that consent? And I almost can’t help, but wonder whether regulation ends up being one of the things that dictate that, as you have to flush your data every six months or 12 months, unless you re-up your consent or something like that. I’m sure it’s way more complicated than that.
I mean, we’re definitely in the very early stages of how people manage their data and how they’ll maintain compliance. I mean, there are all different ways to trip the PII wires as you try to use the data. And so marketers are going to have to be savvy about that. I think there will be penalties to pay if you cross those lines. And interestingly, I mean, while the cookie does follow people around and it’s annoying and the reasons why we have Google making these moves is because of how it feels invasive, it’s actually much less invasive to privacy.
There is more anonymity with the cookie than these other forms of marketing using data. So I run a glee by eliminating the cookie, we’re probably taking a step closer to PII and first-party data in other forms of targeting
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