Google and Facebook Bolstered by Third-Party Cookie Decline

Posted by Michael Carusi on Thu, Apr 25, 2013 @ 04:44 PM
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In our data-driven world, one of the more sensitive types of data that marketers and industry professionals deal with is personal user information through cookies. Cookies have been an engine for personalized online advertising for a decade now, often being a primary revenue stream from the local technology blogger all the way to Google and Facebook.

We seem to be inching towards an online advertising world with less emphasis on third-party cookies. Firefox and Safari both block third-party companies from installing cookies, citing privacy concerns.Networks and coalitions have been formed to advise and educate consumers. Google now has a permanent opt-out plugin.

Even when Google is making headlines for circumvention and cookie tracking, major publishers stand to emerge as the biggest winners of the death third-party cookie. According to AdWeek:

"Big traditional publishers whose ad revenue has shrunk as readers and advertisers shift online could recoup their losses by parlaying their first-party audience data into even higher ad rates. "We believe the cookie discussion really does put a spotlight on the value of first-party data," said Hearst Digital chief revenue officer Kristine Welker."

In other words, without third-party data, first-party data collected by companies themselves becomes even more valuable. Publishers and big media companies that collect user data for membership, opt-ins, and personalized offers are going to be given a significant edge edge in online advertising.

The pioneers of personalized advertising, Google and Facebook, are at even bigger advantage. Google's service unification means it has huge amounts of first-party user data through Google+, YouTube, web searchers, and Gmail among countless others. Facebook's billion-plus users freely provide information about their favorite books, movies, video games, hobbies in addition to extensive demographic data and life events through Facebook timeline. When advertising money is prioritized based on who has the most data on the largest audience, Google and Facebook could stand to do even better than major media companies like Hearst. Geoff Amborn notes via the AdWeek article:

"In a cookieless world, publishers with business models that naturally collect strong names and addresses and other personally identifiable information are going to be able to…connect into CRM databases."

Unfortunately, small businesses and blogs stand to take the biggest hit to their revenue. Content-driven blogs reliant on third-party cookies for Google AdSense will either need to start emphasizing user data directly or resort to alternative revenue streams.

As the third-party cookie continue to decline, first-party data collection and retention will become even more important. Expect to see prominent blogs and publishing companies emphasize inbound marketing by offering E-books or white papers in exchange for E-mail addresses or personal data. The need for data-acquisition could also drive surveys or contests based around providing information in exchange for a freebie. This trend adds more data to a world in which 90% of the data has been created in the last two years alone. Efficient data management will be more important than ever.

Tags: data, data management, Facebook, Google, assets, social media