Third-party cookies, privacy regulations, and privacy concerns are well-worn topics. And it’s challenging to continually try to sort through it all, especially when everyone is talking about things differently.
The latest conversations focus on living without third-party cookies, but the story is actually bigger than cookies. There is finally a recognition that it’s time to focus on the data you have to build better experiences.
Not such a bad thing
Most adtech software relies heavily on third-party data. But what if instead, you built a solution that leveraged first-party data? That’s the path Jon Waterman took as CEO and founder of Ad.net, a search-based marketplace that is pitched as an alternative to the major search networks Google and Bing.
Waterman sees cookies and privacy as a smokescreen for large companies (like Google and Facebook) to get more market share. Basically, if you use Facebook or Google or any other big social media network or brand, then you are going to agree to allow them to collect data on you, he argues. After all, people use these services almost daily.
But what about the small and mid-sized companies that use these big companies to get access to their audiences? What happens when Google takes away third-party cookies? Or when Facebook restricts who and how you socialize and advertise on their platform? Waterman takes the view:
When Google is getting rid of their third-party cookie system, it definitely impacts all the medium, small, even large businesses out there trying to compete for some market share. It does have hints of hits of monopolistic type attitude.
Google has since pushed back the date it will stop supporting third-party cookies, possibly because of pressure from these companies who really don’t know what to do. But it is still going to happen and brands do need to prepare for it.
When Waterman started his company, he didn’t want to rely on third-party cookies. He saw the current problem coming years ago and chose to build the marketplace to use first-party intent data:
What's interesting is that we saw this coming years ago, and we doubled down on first-party intent-based data, the data that we do have that we can access. How do we get the most value out of that and not rely on third-party cookies or companies like Google making a policy change or Facebook making a policy change that all of a sudden kills our business?
Mobile browser search
The challenges for desktop advertising are the same for mobile devices, particularly with Apple devices. Apple continues to deliver iOS updates that apply limitations to how brands can track traffic. The changes, which give phone users the right to restrict apps from tracking them are done in the name of privacy and increasing privacy regulations. Even a small policy has the potential to upend the advertising ecosystem, suggests Waterman:
It's caused big problems for Facebook, and the merchants or advertisers on Facebook because it's become hard to track where the traffic came from within Facebook. And where the conversions came from. Any good marketer is going to look at as much data as they possibly can so they can target the user as best they can and optimize the bid price that they're willing to pay for that traffic accordingly.
How Ad.net leverages intent and audience targeting
As stated previously, Ad.net doesn’t use third-party cookies. Instead, it works with supplier partners (like publishers) to capture contextual intent. It combines intent with audience targeting (eg: by geography), and predictive analytics to help advertisers in its marketplace serve relevant ads that convert.
For example, it’s hard to determine when someone is in market for something, especially if you don’t have a lot of information on them. But Ad.net has established relationships with publishers that help them determine a level of intent through surfing patterns that they then offer to their advertisers to help them decide where to place their ads. Waterman explains:
We work with some of the large insurance companies and state by state there are different regulations. Some insurance companies don't buy traffic in certain states because maybe they’re not licensed. We need that level of targeting from a geography standpoint, but we can do so without knowing who the actual user is.
Now there’s another piece to what happens here. Waterman built a product called Searchiq.co years ago as a search engine that tpublishers use on their websites to provide search capabilities to their audience. Publishers either pay a fee to use the search engine or they work with Ad.net to monetize the website traffic. For example, if you do a search on Life.com, you’ll often see a relevant ad at the top of the search results in the dropdown search box, or on the search results page (similar to what you see with Google or Bing search).
Essentially, Ad.net gets access to first-party data in one of two ways - through the integration of its publisher search technology, or through direct partnerships with publishers who share intent data.
Is first-party intent data the right way to go?
So we know we have to move past third-party cookies to get more customer data but is focusing on intent data - even first-party intent data the answer? Just because someone is researching new dishwashers, does that mean they are in the market for one? Not necessarily. Intent is very difficult to determine. The more data you have, the better those intent signals are, but even then, it’s often incorrect.
Waterman says his company wants to focus on building new technologies that determine intent:
If you're collecting a significant amount of data and you're able to crunch that data, [you can] come up with some types of measurable trends. And those are the trends that I'm referring to that machine learning would take over because you can't do it on a manual level.
He acknowledges that intent is challenging and that it requires a feedback loop with the client to learn what’s working and what’s not:
Without great ways to track and determine if it's performing in a way that is generating actual sales… We're a performance-based organization where the advertiser (the client) gives us what their goals are, and we won't work with a company unless we're getting that feedback loop from our client. So, if a client comes in wants a 10 times return on ad spend - for every $100,000 they spend, they need a million dollars in sales - we're capable of providing that service so long as the client is giving us back the data that we need to optimize the campaign.
It’s time brands looked to solutions that allow them to leverage their first-party data to reach customers and audiences. Third-party cookies were never a good approach; the data is often inaccurate and collected by means that would make any privacy advocate shake in their boots. It was never a tool that marketing should hang its hat on. And yet, many have.
So, while it does seem wrong what giants like Google, Apple, and Facebook are doing, there’s a truth that can’t be denied – consumers want more control over their information, and they want more relevant experiences.
Customer Data Platforms are providing a way for companies to get a better view of their first-party data so they can create better customer experiences. On the adtech side, marketplaces like Ad.net that rely on first-party will pave the way for a new, better way to determine the best places to advertise. Ad.net is not alone. Other technology companies are putting in place (or already have) alternatives to third-party cookies. If things continue to change in a way that keeps privacy top of mind, then consumers will be happy.