Goodbye cookies. The government gets tough on digital advertising this year

Cookies

The number of companies using digital advertising to gain access to users of personal computers and mobile devices such as smartphones has rocketed over the last few years.

For marketeers, this digital advertising has been a boon, and an increasingly valuable source of revenue as spend moves to online platforms away from traditional print.

For the first time in history, marketeers can accurately track advertising spend, and report back to clients exactly how much bang they’re getting for their bucks.

Thanks to computer cookies* they can follow an individual’s browsing history: What you like, what you don’t like, what you buy, when you abandon a digital basket before completing your purchase, to inform their marketing decisions.

But not for much longer.

Now, thanks to new regulatory laws coming into being this year, marketers will lose these tasty third-party cookies, and face new difficulties in how to track and understand buyer behaviour online.

The regulators are looking out for us, the consumers.

Do we need this regulation? After all, most of us like personalised products and services, but the savvy among us also know that by clicking the “accept cookies” button on a website, we can easily lose control over how companies use our information. Do you spend time reading the small print if you just want to get rid of a pop-up quickly? Human behaviour says not (or not often anyway).

But with the growth in data breaches, misuse and identity theft, there is increasing concern about what happens if your data falls into the hands of the wrong people who intend to use that information maliciously.

One company which is aiming to get ahead in this new digital marketing space is Electric Guitar, a Berkshire-based company established only last year as a special purpose acquisition vehicle. The company is aiming to list on the London Stock Exchange today (January 11) as it seeks an acquisition target in the digital media sector.

Electric Guitar intends to act as a consolidator and operator in the digital advertising market.

The new company has spotted that the removal of third-party cookies changes the game for the entire industry.

Phil Cooper is Digital Marketing Director (Revvd) at Stonehouse-based FTP Group. He said: “Apple has led the charge on privacy with Safari blocking all third-party cookies since early 2020, and last September, Apple increased privacy for its users by blocking email tracking if using Apple’s native Mail app. We anticipate other email software providers will be making announcements soon.

“In 2019, Firefox introduced Enhanced Tracking Protection and Microsoft Edge now offers three levels of privacy – Basic, Balanced or Strict.

“The big one, Google Chrome which was used for more than 65 per cent of all internet browsing in 2021, will start blocking all 3rd party cookies in 2023 and have the biggest impact on digital marketing – specifically on those display ads that follow you across the web.

“Our B2B digital agency is seeing increased investment in organic search as well as advertising spend moving away from Google to social media. A positive shift in long-term digital growth rather than quick wins.”

Electric Guitar say the first step in tackling third-party cookie loss is shifting to a “first-party” data strategy.

“First-party” data is information a company collects directly from its customers and owns.

With the impending limitation to the collection of third-party data, advertisers will need to go about procuring this “first party” data for their clients on their customers.

Advertisers’ clients will want to regain control of data concerning their customers rather than rely on internet platform operators. For this to happe, they will need to maintain an effective data relationship with their clients, which Electric Guitar says will be defined by transparency, control, and value amongst other measures. Key to this will be data science, bespoke content development, and command of digital media skills.

According to Electric Data, 50 per cent of agency media spend is on digital media inventory. Over the past few years, the pre-purchasing and reselling this inventory at a profit has been a significant revenue stream for agencies, which will be hit with this new focus on first-party data.

Electric Guitar believes that there is a significant commercial opportunity in the digital advertising sector as advertisers and their customers explore different ways to reach their target audiences in the disrupted market.

While there has been some activity to date within the large capital advertising market, with the focus of legacy agencies’ increasingly on digital advertising solutions, less attention has been paid to the smaller agencies. The directors at Electric Guitar, all of whom are entrepreneurs expert in personalisation, digital media and data, have identified an opportunity to invest in these agencies with few or no legacy issues with technologies that can provide alternative strategies.

 

*small files, often including unique identifiers that web servers send to browsers. These cookies then can be sent back to the server each time your browser requests a new page. It’s a way for a website to remember you, your preferences, and your habits online, but it can also be viewed as an intrusion on an individual’s browsing activity.