Yes, while this post is about a supply and demand perspective on the elimination of third-party cookies, read on to see why I’ve entitled this post as I did…

 

WE’RE HEADED FOR A CLIFF

There’s been a lot of talk about third-party cookies going away, and the recent Facebook stock nosedive due to disappointing earnings has brought additional attention to the issue.

However, what many digital marketers seem to miss is that a literal cliff is coming. Not just the gradual issues that we’ve experienced to date with Firefox and Safari eliminating support for third-party cookies, and then Apple’s privacy changes, but instead that if Google is true to its word and eliminates third party cookies from Chrome in 2023, this will be abrupt. It will happen most likely at a single moment in time, where the day before it happens, third party cookies and prospecting campaigns were running just fine, and the next day, the world changed.

Many marketers have not thought about exactly how the consequences translate to their day-to-day lives. So, here’s how it plays out for both clients and agencies that do not have solid strategies in place already, and quite honestly, even for those who do, this will somewhat still be the case…

THE DAY AFTER

The day after Chrome bans third party cookies, programmatic campaign performance will drop dramatically, just like a stock market crash. Marketers will panic. Agencies will panic. Clients will panic. Just like with any crisis scenario, no matter how much it is planned for, as the old-woman version of Rose said in Titanic, “Thank you for that fine forensic analysis, Mr. Bodine. Of course, the experience of it was… somewhat different.”

SUPPLY AND DEMAND

The initial reaction is not that marketers will stop spending on programmatic prospecting campaigns. Quite the contrary. Because lead flow will start drying up, marketers will start spending more because lead volume and revenue will be the immediate concerns, as opposed to profitability. And at the same time, they will start putting more money into walled gardens such as Facebook and Google. This surge in demand will drive prices sky high. Companies will begin to abandon certain programmatic prospecting campaigns and will drive even more business toward walled gardens and towards PMP deals where publishers know their customers well—micro walled gardens if you will. Over time, the price that marketers are willing to pay for lower quality inventory, where third-party cookies no longer enable intelligent targeting will drop dramatically, and those publishers who do not have strong relationships with their customers will suffer significantly and highly targetable inventory will have overnight, essentially become contextual inventory at best. However, in general, high-quality supply through walled gardens and micro walled gardens will be limited compared to demand, and prices will permanently go up.

IS A CDP REALLY THE ANSWER

Is a CDP (Customer Data Platform) the “answer” to this? Not in the way that some people think. A CDP essentially supports a different strategy—one based on first party data. So, does a CDP get around the third-party cookie issue? Both yes and no.

No, in the sense that there is still going to be a ton of programmatic inventory out there that is no longer highly targetable.

Yes, in the sense that more thoroughly understanding your first party data and audiences you create around that data within a CDP can be pushed toward walled gardens to build stronger relationships with existing customers, and to do lookalike modeling to reach new customers via those walled gardens.

So yes Rose, the ship is sinking. And a first party data strategy enabled by a CDP is not just a lifeboat, but a brand new ship. It’s a ship that will take some getting used to, as the strategy for boarding that ship and living on that ship is not the same strategy that companies are necessarily used to today, but it is the way of the world going forward, so better to get off the existing ship and to get on the new one before the cliff arrives in 2023.