Performance Marketers’ Preparation for Deprecation

When Google deprecates third-party cookies from Chrome—as it says it will—in the second half of 2024, performance marketers will lose yet another signal to track potential customers, after Apple and others have retired cookies in recent years. While performance marketers—including big brands looking to drive sales and direct-to-consumer (D2C) brands spending more on lower-funnel efforts than brand-building—rely most on signals to target ads and allocate media spend, these advertisers are doing the least to prepare for the cookie apocalypse, according to more than half a dozen industry sources. "It's too big of a change to ignore," said Mike O’Sullivan, co-founder of ad-tech firm Sincera. "There’s no safe haven left to retreat to" where third-party trackers are still available. Since Google announced plans to nix cookies, there have been countless reports on how unprepared marketers are for the disappearance of the backbone of digital advertising, responsible for actions like ad retargeting, frequency capping and measurement. Increasingly, marketers have been directing money to other channels like CTV, buying from publishers directly or building up their own first-party data stores. And for those others planning to spend in the open marketplace, post-cookies, there are numerous alternative identifiers trying to prove their worth, including Google's Privacy Sandbox proposals, jostling for proof of performance and market share. As signals disappear from the open marketplace, it's likely performance advertisers will follow. “Programmatically, if there is not a resolve to the identity crisis, there will be an erosion of the fat middle,” said John Donahue, partner at programmatic consultancy Up and to the Right, referring to the majority of smaller advertisers that are more likely to run performance and lead generation campaigns than focus on brand advertising. “That fat middle is needed to maintain growth and volume digitally.” The inertia keeping performance advertisers from testing cookie alternatives is a powerful force, but not necessarily a wise one. Advertisers’ audience reach is at stake, as well as the ability of platforms and publishers to retain their most important clients. A lack of action Performance marketers aren’t taking action for many reasons. Some alternatives to cookies often require a heavy technical lift, for which performance-oriented brands with smaller budgets—because they need to prove the value of every dollar spent—lack resources. “Clean rooms and other privacy-preserving technology require you to have a team and a level of sophistication,” said Ana Milicevic, principal at programmatic consultancy Sparrow Advisers. “It’s quite expensive to have all of this technology in place. This is not a solution for midsize brands or publishers, or really anyone not in the top tier.” Further, performance campaigns are increasingly being executed within the walled gardens of tech platforms like Google and Meta rather than the open marketplace. While walled gardens, with their vast stores of first-party data, are less vulnerable to cookie deprecation, they are not immune to the effects of signal loss. When Apple deprecated mobile identifiers in 2021, performance marketers had to switch up their media strategy, as many brands spend most of their budgets on Meta, a platform where effectiveness had decreased as a result of the change. While Meta and other platforms have spruced up their ad tech to make up for signal loss, it’s not clear yet whether these changes are strong enough to maintain performance when cookies are gone, and targeting and measuring becomes even more challenging. Moreover, performance advertisers have lately been rejecting the open marketplace. Display used to make up between 10%-20% of spend for D2C clothing brand Feat. After stopping spend on display for one week and finding no impact on revenue, it cut out the channel entirely earlier this year and is focusing mostly on TikTok, Meta and creators, said co-founder Taylor Offer. “In terms of sustainable scaling, Meta is still the best channel,” said Offer, adding that his company is not too far into its planning for the third-party cookie's demise. Privacy Sandbox, proactive testing and attribution shifts Proactive performance brands are beefing up their data signals, finding alternative ways of measuring outcomes and testing Google’s Privacy Sandbox proposals, among other forms of preparation. "We’ve made a bet on the Privacy Sandbox," said Michael Lamb, chief commercial officer of demand-side platform RTB House. "We’re working with Google to make sure their solution is compatible with performance advertising." Other performance marketers working within the walled gardens are taking steps to stockpile signals so they’re not caught off guard in 2024. D2C brand Rock ’Em Socks earlier this year tested Blotout, a cookie-less identifier that helps increase the number and accuracy of first-party signals available to brands. The solution works with platforms like Meta and the open web. Within the first week of using the solution, return on ad spend on Meta grew by 98%, and revenue attributed to Meta advertising increased by 188%, said Harrison Hall, ecommerce and digital marketing director at Rock ’Em Socks. Finally, brands can also find new ways of measuring cookie-dependent media, such as display banner ads, like determining the incremental impact on business outcomes via a mixed media model, said Geoff Litwer, vice president, display at performance agency Tinuiti. "Any brand or D2C company who wants to leverage banners in the proper way can drive performance," Litwer said. This story is part of the Power of Tech Marketing special feature. This article was updated to correct Geoff Litwer's title.

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Cookie Crunch: Performance Marketers’ Preparation (or Lack of) for Deprecation

The marketers most dependent on signals are often the least likely to be prepared

Catherine Perloff

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Catherine Perloff