The Cookie Will Crumble, But Authenticity Offers A Solution

David Yovanno is the CEO of Impact, a technology company helping enterprises grow through partnerships.

This is the year that cookies will crumble. Ask any marketer responsible for digital revenue acquisition, and they’re likely to say that Google’s plans to phase out third-party cookies at the end of this year, as well as Apple’s imminent new privacy updates to block them altogether, will significantly impact — or change entirely — their customer acquisition strategy. So, what are third-party cookies? Why are they so vital to the industry? And how can marketers adapt before these types of cookies disappear?  

A Steady Diet of Cookies

Each time a person visits a new site, advertisers on the site can drop a third-party cookie on that person’s device. The cookie collects site visit data, including what they click on or the content they view, offering advertisers the opportunity to target and display relevant ads to that person on other sites. The modern digital advertising industry has been built upon this functionality, fueling sales for major brands in the digital age. 

Suffice to say, the change certainly delivers a significant blow to the ad industry. But the extinction of cookies is not a single-move disaster scenario that will totally change the advertising industry — rather, it may just be the straw that breaks the camel’s back. 

The State of the Industry

The advertising industry has been broken, hobbling along for a while now — even before the pandemic and before Google announced they were taking the ax to third-party cookies. 

The ad industry has whittled away the trust of consumers, and no third-party cookie can fix that. Intrusive display ads get in the way of content and slow page times. Retargeting tends to make consumers feel uneasy, as the product they looked up once follows them around the web. This has only encouraged the adoption of ad blockers. In fact, eMarketer estimates that one in four consumers have an ad-blocker installed on at least one of their devices.

Then we come upon the problem of the walled garden: The Facebook and Google duopoly dominates and controls today’s digital advertising market, funneling more than 90% of all new ad dollars — meaning, when the costs for customer acquisition and cost-per-click are through the roof, the choices for alternatives are limited.

Taking Clues From What’s Broken

This breakdown of the industry has resulted in consumers losing trust in advertising, ignoring display ads and changing their shopping habits. So, of course, when Google wipes out the existing tactics to target and acquire new customers, the entire advertising ecosystem will inevitably change. But rather than panic, let’s examine what went wrong and how the broken parts of the industry can be clues to what’s missing.

Between the loss of trust and authenticity and the lack of personalization, the modern consumer is starving for something genuine. As a proof point in itself, just look at how the influencer industry has boomed. An influencer’s audience sees them as a trusted friend or advisor. So, when they partner with and recommend a brand that they truly believe in and advocate for, that brand is tapping into a level of trust that was previously reserved for personal relationships.

Or take, for example, direct business partnerships. When a consumer has already gotten on board with one brand, that existing relationship represents existing trust. A brand partnership acts as a referral into that circle of trust, offering a halo effect for the new brand. For example, take a look at Delta and Airbnb. When a Delta customer books a flight, not only are they reminded that they can earn Delta SkyMiles points if they book a stay with Airbnb, but a modern product integration also offers customers a point of convenience. I believe that the alliance of brands that fit well together like this also raises brand equity and brand awareness for both companies.

Authentic Partnerships Drive Trust — and Revenue

Whether you’re dealing with influencers, business partnerships or even other kinds of partnerships like app integrations or affiliate marketing, first-party data will rule moving forward. This means that businesses need to seek out other businesses and individuals that they can rely on for a proper introduction to a future customer, rather than abruptly introducing themselves based on passive data and disruptive advertising. Smooth the buying journey by equipping those who your audience trusts — publishers, other brands, influencers — with the information and messaging they need to be successful. 

There is no question that post-cookies, there will be no silver bullet or easy fix. We’re all braced for a pivot in strategy. But start with authenticity, and you can’t go wrong.

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Author: David Yovanno, Forbes Councils Member