Nick Timon
26-Jun-2019 09:17:06

The Cookie Has Crumbled

Anyone who has been re-targeted by ads will know that while cookies are a good indicator of past behaviour, they are not so good at telling you what is important right now. For that you need context. The deeper your contextual understanding of the audience and what they are engaging with right now - the more relevant you can be. What is more, cookies are becoming a very, very, big problem and this could mean fundamental changes lie ahead.

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On the 20th June the UK Information Commissioner's Office (ICO) issued an interim report into data privacy in the AdTech industry. Specifically around real time bidding programmatic. If you are interested, you can read all about it here, but if you don’t have time (or the patience), below are some thoughts on what it might mean for the marketing industry both in terms of risks and opportunities.

The good news is that the ICO appears to be taking a consultative approach to ensuring that the programmatic industry is compliant with relevant privacy regulation. The bad news for Adtech providers is, they consider a significant portion of it in breach of data privacy regulations and a long way from being compliant.

Despite this however, we feel there is a huge opportunity for the industry here. But first let’s look at how we got here.

The Age of Consent

There are a number of reasons for the current situation but we are not going to get into the details of it here. However, suffice to say that the use of cookies which underpins much of RTB, require organisations to provide clear and comprehensive information about the purposes of that cookie and gain relevant consent from consumers in order to use them.

In her foreword to the report Elizabeth Denham - the Information Commissioner states:

“The creation and sharing of personal data profiles about people, to the scale we’ve seen, feels disproportionate, intrusive and unfair, particularly when people are often unaware it is happening.”

What is more, in a separate move browsers (e.g. Safari, Firefox etc.) are implementing what is known as Intelligent Tracking Prevention (ITP) which further restricts the use of cookies. Taken together, it is pretty safe to say that the future use of cookies as a way to target advertising looks pretty bleak.

So now, an industry that got fat on consuming too many cookies is suddenly going to have to go on a diet. And the ICO will be acting as weight-watcher in chief.

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So what does this mean for the industry?

Putting ads into Context

Cookies are the foundation stone upon which the programmatic process sits, remove them and the whole edifice collapses - like a house of cards.

Unless legislation changes (unlikely), the race is on for a way to replace cookies. When you do the analysis the only option that remains to replace cookies is targeting devices (also ruled problematic by the ICO) or, the content being consumed, otherwise known as contextual targeting.

When you think of it, contextual targeting is not such an issue as this is precisely how advertising always used to work before ad tech came along. And let’s face it, things worked very nicely in the pre-digital days, so in theory content targeting should only be a good thing.

So if contextual targeting is how we used to do it, why didn’t we build programmatic on that basis in the first place?

Two reasons. First of all the problem with content or contextual targeting is that it used to be very hard to read and understand digital content at scale to the level required. However, thanks to AI and machine learning we now have capabilities that allow us to understand and categorise the content that people engage with and then match it to a relevant ad.

The second reason is that as an industry we have been obsessed with the promise of mass personalisation at scale. While this might be useful when it comes to converting a sale. In terms of building a brand, this level of targeting may actually be counter-productive, so much so that in recent years major advertisers like P&G have re-trenched from this point of view.

So, rather than tracking people around the internet we can now instead track the content they consume, rank it terms of engagement and ultimately conduct an auction so that advertisers can bid to gain adjacency to the top engaging content, relevant to their brand.

But there is one more important thing that we need to consider. The creative.

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Shit in - shit out

As the great Advertising titan David Abbott once said (allegedly),

“shit delivered at the speed of light is still shit when it gets there.”

And let’s face it, love it or loathe it programmatic advertising and ad tech as a whole has been guilty of perpetuating this efficient delivery of shit for some time.

In the era of customer experience and ad blockers, if any new advertising approach is to succeed, we really need to improve the quality of the creative.

That means aligning our understanding of who our target audience is, what they really care about, the types of creative they respond to, as well as where they like to consume content.

Over the last twenty years or so, we have come to see advertising in discrete silos. Insights, creative and media have been carved out with very little overlap between these silos. Often the creative is done almost as an afterthought. The result is a significant drop in effectiveness and low levels of long term brand growth.

By way of illustration, in a recent article in Campaign Magazine, Rory Sutherland - Vice Chairman of Ogilvy called for a wholesale change in approach. According to Sutherland:

"Most marketing problems are what I like to call Sudoku problems. What this means is that any solution can only be obtained by considering the system in its entirety. You can’t cut a Sudoku into nine separate squares and ask nine separate people to solve one square each. That’s why it never made any sense to me that media planning and creative should be separated at all.”

This has to change so as an industry we need to view this ICO report as a forcing function for wholesale change in the industry. Not only should we make our media targeting contextual and privacy compliant, but use this as an opportunity to re-align it with our creative and strategic thinking.

It is only by aligning all three that we can really start to shift the needle in quality and bring growth back into the advertising industry. We have a once in a generation opportunity to re-shape the industry to put people, culture and creativity at the heart of the process and not just overly focus on media.

At Codec we present insights, creativity and media together in a single platform view. This helps break down organisational silos and encourage closer working relationships across the marketing supply chain. We provide the data that can link strategy, creative and media into a single workflow to help drive a more effective marketing ecosystem.

So let’s take this opportunity to create a more collaborative approach for the industry that can get back to driving growth for brands and not just the adtech businesses that serve them.

 

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