The year of cookies going away has turned into the year we decided that cookies couldn’t go away.
As a quick refresher: Google had told the digital community that 3rd party cookies would finally be deprecated by the end of the year and had introduced an alternative solution to fill the gap called ‘Privacy Sandbox’. The solution was intended to maintain similar levels of results for marketers and publishers in a more privacy-compliant way. Unfortunately for Google, a wide variety of voices—media groups, publishers, trade organizations—who were testing the solution found it to be less than satisfactory.
The final death knell for Privacy Sandbox may have come via the IAB’s Privacy Sandbox Fit Gap Analysis Report which found that “Privacy Sandbox will restrict the digital media industry's ability to deliver relevant, effective advertising, placing smaller media companies and brands at significant risk. The lack of functionality will throttle their ability to compete, ultimately impacting the industry’s growth.”
So, long story short, cookies will be sticking around for the time being.
One of the silver linings of the cookie crisis whiplash the industry had to endure is that, in preparation, many players made material progress on first party data strategy development. We’ve seen media companies like Disney build new audience ID technology, publishers such as Hearst develop strong first party data targeting capabilities and even big tech companies including Meta and Google double-down on privacy focused identity matching services. This emphasis on first-party data strategy and quality concerns continue to drive the industry toward better execution and preparation
On the other hand, despite some progress and innovation in the media space, the industry remains stifled by underlying issues of quality, veracity and brand safety. All of this is a reminder that while we are in a mature era of digital marketing, there is a long way to go in terms of shoring up quality activations and that we must remain vigilant about monitoring campaign delivery.
Beyond this, there’s another side to the media ecosystem developing more rapidly than ever: retail media. In February 2024, eMarketer forecasted that “retail media will make up one-fifth of worldwide digital ad spend this year.” Some brands, like Mondelez, are already reporting that ratio as a reality in their business with more spend going toward retail media than TV.
While retail media has, in some ways, been around forever. The buzzword is taking on new life recently as digital capabilities have greatly accelerated allowing for truly full-funnel opportunities. Whether a brand is looking to leverage a retailer’s first-party audience data to reach consumers in paid media, drive consideration through on-site and sponsored product activation or encourage purchase at the point-of-sale via physical and in-store media, retail media partners can offer it all.
This is not to say that retail media is without challenges. Standardization of metrics is still not clear making comparison difficult, in-store presents another difficult dimension to measure across mediums and overall incrementality is thought to be difficult to ascertain as testing can be harder to design for in retail environments. The IAB is currently working through new standards and guidelines which should help guide the emerging sector to further adoption.
It’s not just retail that’s decided to get in on the advertising game. It’s…everything.
A wide variety of businesses have stood up advertising business units offering new customer bases and data opportunities to brands. United Airlines, Chase Bank, Marriott Hotels, Expedia, Home Depot, PayPal, CostCo, and Uber are just a few that have come to market with ad network offerings. Essentially, anything and everything with scaled customer data is becoming an ad network. Collectively, all this activity has created a new landscape for marketers and brands to navigate.
As brands think about their own operations in the face of this rapidly shifting media environment, today’s challenges present a strong roadmap for future opportunities. Namely, a continued focus on data strategy and first-party solutions will drive all digital strategy whether cookies stick around for a long time or not. In the meantime, focusing on quality management of digital media and exploration of new ad network opportunities can provide significant value. Media’s never been an easy world to keep up with, but with every evolution comes a new set of possibilities for brands to take advantage of.
