Cookie phaseout challenges online business marketing

Businesses adapt to new digital identity and data strategies.

As the digital industry moves away from third-party cookies, a staple in online marketing for decades, businesses face the challenge of adapting to a significantly altered landscape.

Dan Richardson, Director and Head of Data & Insights in Australia and Southeast Asia at Yahoo, said that the phaseout of third-party cookies marks a pivotal change, affecting targeted advertising, measurement, and verification practices established in the late '90s. 

Safari initiated the trend by blocking third-party cookies in 2018, with Chrome planning to eliminate them entirely by the end of the year. This move forces a staggering 81% of brands, advertisers, agencies, and publishers to overhaul their data strategies, reliant on third-party cookies for delivering their services.

As Richardson explained, identity enables marketers to recognize their customers across devices and platforms, offering a seamless view of consumer behaviour. However, the fading of user identifiers like email addresses, phone numbers, and device IDs poses significant challenges. 

The industry is transitioning from an era of unconsented data harvesting to one of informed consent, requiring consumer opt-in. This shift predicts that by the end of 2024, approximately 75% of advertising inventory will lack identifiable user data due to consumer privacy choices and browser policies.

Addressing the dichotomy of the internet into "addressable" and "non-addressable" segments, Yahoo focuses on devising solutions for engaging with both known and unknown consumers. The company's identity solutions are also interoperable with industry innovations such as the Google Privacy Sandbox, aiming to balance privacy concerns with marketing needs.

The underlying issue, according to Richardson, is the need for a robust data culture within organisations. The transition to a more data-led business model isn't just about adopting new technologies but fostering an environment where marketing and IT departments collaborate closely. 

Shared objectives and a commitment to privacy, governance, and ethical data use are paramount for leveraging identity testing and customer data to enhance marketing strategies effectively.