Following our recent New Era of Measurement event, Head of Digital Operations Gabby Krite and Head of Search Niki Grant are joined by Dan Ward, Head of Performance at partner agency Accord Marketing, to unmuddle the overwhelming and complicated topic of cookies.
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Hello. You’re listening to unmuddled a podcast from The Kite Factory media. In each episode we take a topic from the world of marketing and media and simply unmuddle it, giving you the key information you need to know. I’m Gabby Krait, head of digital operations at the kite factory. And today I’m joined by Nikki Grant, head of search, and Dan Ward, head of performance at a partner agency, Accord Marketing. Today we’re going to be discussing the topic of cookies, which we know is not the sexiest topic but it’s also a really important topic for the future of digital and it can be quite an overwhelming and complicated one. I think it would be acceptable to say that a lot of people bury their head in the sand. I think it’s quite an overwhelming problem to overcome. So today we want to just sort of lay down the framework. What are cookies and what are we actually losing? So yes, let’s start off with what is a cookie? Well, I’ll take the floor. Thank you very much. Gary. So what is a cookie? In layman’s terms, it’s just a small text file that gets created when a user loads the website and it’s used to uniquely identify them via the device and browser. That’s a fair summary of in layman’s terms. What is it cookie in terms of how can they be used? A variety of different uses really. And I think it’s good to separate out what those different uses are. Basic level, they can be used to make sure that the website runs correctly, make sure that a user can log in to certain areas, navigation works and maintain preferences. So those functional cookies are sort of where the starting point? They can also be used to track user engagement, performance analytics and that’s very much in the performance and statistics region, things like Google Analytics. And finally they can be used to gather information for targeting and advertising. And that’s typically where the third party cookies come in. Yeah, I think that’s quite an important distinction that is lost in the conversation at the moment of the difference between the first and the third party cookie. I’ve got an analogy for this right because I love an analogy. So imagine you go to a restaurant and you’re having a conversation and you’re overheard in that restaurant having a conversation, but you know it’s only people within that building that are going to overhear what you’re saying and know the secrets that you’re giving out. What third party cookies effectively do is go, we’re going to take that conversation that we’ve overheard in the restaurant you knew you were in and we are going to share it with loads of other restaurants and loads of other people that are eating and you didn’t know that you’re in those restaurants, you didn’t know you’re going to be overheard in those restaurants. So what we’re losing here is the capability for these cookies to be shared with gay abandon across providers, tech platforms, whoever it may be. Also, the nature of third party being, it could be lots of different people. So things like your analytics tracking will not be affected because as your first party, it’s on your website, as a brand, you’re not needing to throw that information out to another provider to be able to tell you what it is. So it’s really the more clever things that we’ve become accustomed to that we’re losing with, I would say, particular effect on display. Obviously, from a search background, we’re slightly less impacted by it because the entire mechanism of search isn’t built on cookies in the same way the display is. Yeah, absolutely. I definitely look at this and I think that displays the most impacted, certainly social is impacted, like we’ve all seen with the recent updates with Apple, but recently it was about a year ago now that caused massive issues, but that wasn’t really to do with cookies. It was just sort of app opt in. But that kind of like similar seismic change is probably going to happen on display across the whole ecosystem. It affects everything right down from building your audiences to optimizing your campaigns. It’s worth just clarifying sort of what’s happening and what’s changing to sort of set a timeline. So if we talk around third party cookies in a sort of phase death of them, as it’s called, I think it was about five years ago, firefox said no third party cookies by default. So that sort of started the trend. And it’s in the name of user privacy, like you’re saying, following around the Internet, and then Safari followed about two years later, and then Google Chrome, which is the lion share of the market. So they’re about 65% share, they announced. Yeah, we’re also going to, by default, block and kill off third party cookies. So that was back in 2021, I believe, 2020. And then they said it’s going to be 2021, and now they’ve delayed it again. So it’s not until next year, 2024, that they plan to sort of end third party cookies. I think there is quite a lot of nuance between these different providers and their motivations behind getting rid of cookies and also their motivations behind not getting rid of cookies. In terms of Firefox, just to be a little bit mean, I do think it’s very easy for Firefox to be like, oh my God, look, that’s where the first thing to get rid of it aren’t we so far thinking they didn’t have a huge amount to lose because Firefox or Mozilla as a business, does not have these cookie utilizing platforms. What’s the first thing you did on there? You went on Google straight away. Yeah, exactly. And then Safari with rumbles of Apple’s own search engine coming out, that kind of muddies the waters on there. And a DSP two and a DSP two. So it kind of muddies the waters on their intentions and why they’re getting involved in it. I do think Google is slightly at risk of becoming the bad guy in it because they’re taking a little bit longer. But with 65% of browsing happening on Chrome, with the ad revenues that go through Google, with the sheer usage of Google in general, there is a bit more of also, and the impacts are a lot wider than the other two browsers. Yeah. So it’s easy for them to go first, but I do think there’s a lot less for them to lose from doing it first and there’s a lot more for Google to need to maintain and improve upon to future proof themselves. How do we think that big that risk is actually to Google? Because on one hand, yes, they get a lot of their money from ad revenues and they have the biggest to lose within the market, but also because they are such a big player. Are people just going to go to them anyway, regardless of what their solution is? Yeah, I think that’s a fair point. Do you go to a big player to spend the money regardless of how well you can measure it and how well you can target it? I think there’s certainly a truth to that. Measurement is so synonymous with digital that people have got so used to being able to measure performance to the lowest level. So how is that going to work if they can’t do that? Are they going to lose trust in effectiveness through Google and search out alternatives? Is that the risk that Google sort of weighing up as to why they perhaps delaying their approach? I think with Google. There’s another thing that makes them a wee bit of an outlier in some of these things. More so than the others. Which is the number of services or platforms that they own because they can access data across YouTube. Gmail. The Play Store. Google Search. The display network. And they’ve got all of that to hand because they own all of that and they don’t need third party cookies in any way to do that. So I think there’s potentially a benefit to tech companies that have lots of different platforms. So they’ve got their own data, is very vast, and they don’t need cookies to be able to tell you more stuff because they’re the ones that own the data. So I do think there’s a benefit there for viewers in the sense that they’ve got all of that information to hand and they don’t require those third party cookies to get their own data. But I think we’re seeing the infighting come to a little bit of a heads with Apple. The iOS 14 update kind of screwing over Facebook and then Apple and the Safari cookie update kind of screwing over Google because there’s nudging them into a corner. So it’s getting a little bit dog eat dog between the big four things. It’s a race to the top, isn’t it? And they’re always fighting against each other and they are operating in slightly different areas, but you can see them going into each other’s area more. So you say. The thing that I’m wondering is a race to the top of what? You know what I mean? Because it’s like, what’s going to be left to be at the top of when cookies have gone? Unless you come out the brand spanking new solution to it, you may well end up being the king of the barren land if you are. Yeah, that’s quite a bleak. It is. But yeah, I think one of the things at the moment is that we’re looking at the existing market, the existing state of play, and what the tech players in that landscape have to lose. But what they have to lose in two years time is going to be very different to what they have to lose today. So we don’t really know what they’re going to be losing or not. I think to your point around Google, people will always still use Google. Yeah, they have that plethora of data across other platforms, which makes it easier for them. I think historically, if advertisers were struggling to use the data capabilities to run a campaign, you would use a third party tool, you’d go to Axiom or Data Logix or something like that to do it. But that’s going to be tricky because they’re based off of cookies. So you’re not really going to get people hemorrhaging outside of the core set, I don’t think, because seeing as the cookie issue is an industry wide issue, it’s not like we’re going to start in challenger platforms going, oh, but we use it, it’s fine, and the change will natively support some media over others. So programmatic platforms where they’re solely reliant on third parties, they’re going to be hit the most and they’re coming up with their own solutions. Is that going to work with what Google is dictating or not? It remains to be seen to a point. And then there’s others who have huge first party data sets who are sitting pretty right now and looking a little bit smug. If you’ve got a Telegraph subscription, for example, they have your data and then they can sort of target you within their own sort of ecosystem. So those who have had the foresight a little bit and they’re like I say, they’re sitting smuggling and happy at the moment. Well, speaking of foresight and smugness, Google buying Fitbit. No, we’ve just bought lots of first party data about people and cookies are dying. So I think there’s more and more odd little strategic tendrils that keep coming out that are related. That’s probably a good segue into talking what solutions are being tested right now. So I don’t know if you want to touch on the dreaded flocktopics. Dreaded flock? I mean, without sounding controversial, they are effectively the same thing, just with slightly different methods. Behind them. My primary concern is that although the topics that we have at our disposal through in spaces like Euclid at the moment are not topics in the same way that this would be. We have had Google collating this kind of data historically to be used for a similar topic based purpose. It hasn’t been ground breaking, should we put it that way? It might be something that we use, but I wouldn’t live and die by the methodology. I think more succumb exactly what it’s going to look like and how many topics there are, there are and how granular can you go, because you can imagine if there’s just ten topics in the whole of it, that’s not going to be very targeted. But if there’s 100, 200 that you can go very granular, then that’s going to give people more options and therefore how effective it is. They’ve certainly delayed it to give more time to develop the solution for it to be accepted by the community, just to make sure that people listening understand the difference. Because at the moment it sounds like topics are basically interest, which for cooking based. What is the distinction between topics and interest targeting as it exists now? So the distinction is that the interest targeting will pertain to the user their historic browsing behaviors, the information that is inherently tied to them as an individual. So I as an individual might be interested in cooking, I might be on a finance website, but me as a person, I like to cook. When it comes to topics, that finance website is where that will begin and end. So it’ll be the content you consumed with finance. You are now in a finance topic and that’s where that avoidance of the personalized data comes in, is that it’s all very contextual. The thing is, as we know as marketers, context is everything. There is a very big difference between someone looking for a school place for their kids or a school place for their grandchild to share with their kids to show them the research that they’ve done. Context is a lot and that is kind of what we’re missing a lot of when we’re looking at the topic approach that people are taking, I think, yeah, absolutely cool. Are there any other solutions that are worth mentioning in this form? I know certainly from programmatic partners there are a lot of people developing sort of universal ideas in this kind of methodology, but my personal opinion is that they’re not going to last very long. I don’t know if you agree. Yeah, well, you’re saying there’s a big impact on the programmatic trading desk and they’re the ones that are coming up with their own individual solutions. And exactly how effective they are, I think remains to be seen, especially with the change in Chrome. Will they be effective enough and will they fit in with what Google changing those solutions are out there within those particular partners but there’s certainly nothing as universal as what topics would be and will be. The programmatic partners can’t really make their solutions until Google has really decided what their solution is for everyone to tie in. Yeah, that’s it. It’s a really good point about people having a control as well, because what they’re laying out is going to be adopted by a lot of people beyond Google as well. So it’s not to sound in defense, particularly of Google and how they’re approaching it, but it’s not that they’re dragging their heels for their own sake. They are going to be held accountable for whatever reason they create. A lot of other businesses are going to have to use that as the basis for what they’re doing. Imagine the stick that would give Google if they got it wrong. Yeah, hence the delay. I mentioned it just before, but is it ever going to happen? We’ve had two or three years worth of delays now. Are they ever going to get to that point? An open question. Yeah, with this framing, it’s kind of personally scary that Google hasn’t found the solution yet. Like, if Google, who has one of the most resources in the world to hand and they still haven’t come up with a solution, it’s like, will anyone ever come up with a solution? And I personally don’t really believe there is. I think all the principles that would apply to Why You Don’t Have cookies would apply to any other solution you could develop. So I’m very much a proponent for let’s get rid of cookies now, let’s move on with life. And you plan and buy digital media, focusing on targeting the right context, the right audience, and focus on amazing creative, which kind of gets lost in performance at the moment, I think. But I know that’s quite a controversial opinion if you strip out the tech, because I think there’s some people that get that might feel a little bit alienated by being this is all very technical and I can’t code. I can’t, by the way. Neither can I. If you’re listening, you can’t go, so don’t worry. But I think the base question is, how do you make it relevant to people when you don’t know who that person is? That’s a tricky question. And we can talk about brands with huge budgets who can cover the nation. They can afford to be a bit more wider with their targeting. But for the smaller businesses, which have got smaller budgets, and they’re quite targeted because they need to be, is it going to impact them more so on getting the return and certainly being able to measure that return for their investment, so we might see a bit more, if that were to happen, the smaller people struggling with their budget? Yes, definitely. And then in terms of, will it ever happen? I guess another element is what you were talking about previously with the possible UK legislation. Yeah, this is all to do with moreso websites and consent towards using cookies on websites. So you all have heard of GDPR used news, so came in 2018, you must opt in to be served a cookie. That’s what came out, and hence the influx of cookie banners across websites, everywhere on your phone. First thing you have to do on a website is accept, reject or just try and get rid of it so you can actually see what you wanted in the first place. And that’s had an impact on the data that we can be tracked. If businesses are following that to the letter, then if you don’t accept that, you can’t track them. So that impacts anywhere between 30 and 70% depending on the exact banner and how it’s being utilized on the amount of data you can track. So we’ve already seen that reducing it, but then to throw a spanner in the works, the UK Brexit, we leave the EU and they start a consultation on do we really want these banners in our face every time we go on a website? So they had the consultation late last year and they’re actually looking to legislate, to move the UK back to being opt out so there wouldn’t be cookie banners. So I appreciate that sort of muddying the waters a little bit, but it’s just letting people know that that’s what the UK government talks about may come in. I have a very specific question about these muddy waters, which is why, how have we ended up in a situation where one branch of this being the tech industry and media owners are going, right, we need to find alternatives, cookies, we’re getting too much pressure at the same time the government is going, I don’t know, let’s just not ask permission anymore. And there’s a real tension between those two things and the reasons that both sides are doing what they’re doing. But if the technology is going to disappear, if cookies are going to disappear, do we care really what happens about these banners in the next twelve months? Because in 24 months, by the sounds of it, hopefully, who knows? But as far as Google are saying they will be gone anyway, I’m not sure that any government necessarily has the experience or the knowledge within their personnel to be able to talk with conviction on any of these things. Yeah, well, I think that’s a good point where we can sort of distinguish between first and third party because the third party ones are the ones which are slated to go, whereas the first party would still exist. So the government, I guess, is talking around those and you would still have to when the third party are around or not, you would still have to accept or opt out. But if they’re bad enough to get rid of third party loans, it feels like we’ve made these marginal gains. We have the European cookie legislation, which was in 2011, something like that. We’ve then had the GDPR one around 2018, and then we’re going to take a step back. It does seem strange from a UK perspective, to go back on all of the work that’s been done. From my understanding of the reasoning is to try and create an internet that’s more usable for the end user and for the sake of privacy in some ways, which is kind of the opposite of how we start this conversation, is that users want their privacy to be respected. So that’s an interesting step very much. Watch this space to see does the government legislate and push it through or the politicians change and it gets right now, at my most cynical, I feel like it’s just politicians going, cookie banners are annoying. I have to opt in every freaking day, even though I’m logged into this website, and then just not really understanding how that fits in with our legislation. If I’m being incredibly cynical, that might be what’s happening. Sir. Everyone keeps talking about cookies. We don’t really know what the problem is. Hey, let’s remove the banners. That fixes everything, right? Because then cookies go away. I think in terms of that future proofing point my go to is always the collection of first party data from your customers that pulls in lots of questions around value exchange and how you collect that data and what it is that makes people want to tell you everything about them. But I think first party data, or zero party data, given that’s provided by the consumer, will often be some of the most reliable, deterministic accurate data that you can gather. And I would also argue that at least with the first party data collection, there is a value exchange. It’s an honest way. If people don’t want to give you their data, then they don’t. Whereas with cookies, obviously, we can ping stuff around everywhere and kind of scrape what we want, and we haven’t necessarily earned that. As a brand, you haven’t necessarily earned the right to be able to do that. So I do think some brands are worried about putting the money where their mouth is going, oh, God, you know, what if we actually asked people to give us information firsthand? Are they going to want to do it? And I’m sure a lot of companies will struggle, but then I’d say that’s on them to do better. Yeah, absolutely. Just to pick up on something you mentioned there, in terms of terminology, you said zero party data and first party data. I think there’s a lot of confusion in the market as to what zero party data is. If you could just elaborate on that. If we do all of them from third downwards. So third party is someone else, someone else entirely. Second party is the platform, generally the platform through which you are running your activity. So, for example, Google, you’ve chosen to use Google’s platform. Google is that second party data. It’s not totally random, like third party. Second, we get closer. First party data is data that the brand owns, or data that the person in question owns when we’re having these discussions, which could be website usage data from your own website, which is why Ga is considered not a third party cookie. So it’s your own property that you’re allowed to track. Damn it. And zero party data is data that the individual themselves have provided directly to you. So you haven’t collected it by a cookie or any other questionably. Nefarious means someone has literally typed in their email address to give it to you, which is why that zero party data then becomes your first party data because you then own it, but originally it starts at zero because it’s come directly from the consumer. Brilliant. So if someone wants to run a value exchange campaign giving away Pin badges or something competitions. Competitions, that would be zero party data, that then becomes your first party data. Absolutely. Yeah. And then I think the last thing to touch on before we round off the conversation is with the delays, with the possible changing legislation. Should we be doing anything about this now? Yeah, I don’t think it’s a case of bearing your head in the sand and just waiting for it all to blow over. That’s never a good idea. But it goes back to fundamentals, really, is reviewing your website and understanding what first party cookies are using, what third party cookies are you using within your website, within your marketing activity to understand if these changes do come in or become more so? Where are you going to be impacted? Where are you going to be the holes in performance and measurement? So that’s your starting point. And then pivoting to what we just talked about is what first party, what zero party data is available, what can be used and what can be expanded upon it, and how can that be used for your target moving forward. So those two really fundamental areas there to focus on now, regardless of what’s coming in and what’s to come. I would also say bulking up your first party data. Not through any means necessary. But for example. If you have an app. If you have an ecommerce website and a brand website. If you have a blog. If you have social media pages. Whatever it might be. There are a lot of brands at the moment that might be saying. Well. We’ve got Google Analytics on our website. So we know everything that’s happening and that’s our source of data. If you also have an app which is recorded on device ID and not cookies. So it’s kind of outside of this conversation for the avoidance of confusion. The reason iOS 14 is involved in this is because of an Apple update that stopped users from being tracked within their apps by default. So either is not the same as cookies, but has a similar flavor to the cookie thing. But if you have an app. If you have any platform that you can track to bolster that first party data and effectively kind of do what Google is talking about with topics. But you do it on your own properties. With your own data and scale that to use it. Then I would say that that is also a good approach to make sure you’re in slightly better stead. Because we don’t know what the solution will look like. How helpful it would be. How accurate it will be if one is found. Yeah, that’s a good point. At properties are probably quite a lot more powerful now than they were before in terms of having data to hand. Yeah, as long as your consumers will use Android very old iPhone. I completely agree with what everyone said. The only thing I’d build on is building on my controversial opinions on this topic. Significant proportion of Chrome traffic is already like Calculus and most of Safari is Cookulous, most of Firefox is Cookulous. So we’re looking at probably about 50% of the market of web traffic is cookies at the moment. So I would argue we are pretty much in the cookie’s world at the moment or on our way there, even without Chrome doing it. So it’s very much I think we need combined strategies. Even if Google is going to delay for another few years, there is a need for testing now. It’s very much my opinion. I think you need to take it back to the basic principles of business and money, as well as people often get suit so sucked into the detail that they need to take a step back and look at what I’m spending, what is my return, and then work your way down from there rather than starting with the detail and going back out. If we don’t have the detail, then what can we do? The only thing I can say about that 50% is whilst it’s 50% of what we may historically have had access to in terms of the browser usage with cookies, that 50% is still a lot of people. And the data that’s collected from that 50%, I would say, is arguably at the moment, still really kind of enough to extrapolate out behaviors across various different audiences. I’d say at the moment, Google won’t really give a number of what sensitive users are logged in, but based on how much we see as unknown with the accounts, we’re looking at around 50%. So we’ve already been half cocked already when it comes to the data that we have access to. I do think a lot of this is a state of mind at the moment. We’re kind of safe in the knowledge that cookies are kind of still there. And yes, we need to find another solution, but it’s not quite yet. I think a lot of what will change when Google do settle, if Google do settle on. A solution will be a loss of safety blanket for a lot of marketing. Yeah, exactly. Rather than any real technical impact. A lot of it is just going on. God, we’re there now. Wily Coyote runs off the edge of a cliff, and it’s just like in mid air. We’re going to end up there, but we can see it coming. And now we’ve got another two years to see it coming as well. Yeah, I think you’ve hit the nail on the head there. It is a change of mindset, really. It’s probably the biggest thing. Losing our comfort. Yeah. Wonderful. All right, so just a summary of what we’ve gone through today. We’ve laid down the groundwork of explaining exactly what a cookie is, how it’s used within websites, and the digital marketing ecosystem. We’ve differentiated between first and third party cookies and also zero party data, 1st, second and third party data. And we’ve talked about what we’re actually losing and what the current solutions are for the curriculum world. And then we sort of discussed whether it will actually happen or not, which is the biggest question at the moment. And then we’ve touched on just sort of what we should be doing now to make sure that we are prepared should it ever happen, but also whether it’s happening now or not. So thank you. All right. Thanks for having me. Great. It’s done you. Thank you so much. Brilliant. So you’ve been listening to the Unmuddled podcast by The Kite Factory. See you in the next episode.