“It
is not the strongest that survives; but the species that survives is the one
that is able to adapt to and to adjust best to the changing environment in
which it finds itself.” - Leon C. Megginson
As the end of the year approaches,
I felt it was the perfect time to reflect on 2014 as well as the year
ahead. The foundation laid this past
year will reverberate within the Ad & Marketing Tech ecosystems for many
years to come. 2014 will be remembered as the year the 3rd party
cookie was officially labeled “Critically Endangered”. 1st party
cookies are alive and well but their 3rd party relatives are
unfortunately facing extinction, their demise is now only a matter of time. A
sad occasion for most in the Ad Tech space, as much of the technology built and
deployed today is reliant on these small bits of code. But environmental
factors have a notorious history in determining the survival of all things,
cookies included.
Compare today’s environment with
the environment of 10 years ago and you will start to see why the 3rd
party cookie is going the way of the dodo bird. Life back then was far simpler,
MTV still played music videos and Internet users typically had a single device
and more than likely one browser. Making the 3rd party cookie a
perfect mechanism for tracking browsing behavior and ad targeting. Fast-forward
to today and we not only use multiple devices but multiple browsers within each
device. The cookie was just not designed to operate in such a world; it was
designed with the assumption that there is a 1:1 relationship with a person
and a browser. This is clearly no longer true and that reality has been moving
the 3rd party cookie up the Endangered List for the past 2 years.
And it certainly doesn’t help that along with all of these challenges, browser
makers like Apple & Mozilla have by default turned off support for this
already ailing tracking code. The 3rd party cookie was unable to
adapt and so the saying goes, you either adapt or die. Simple math…
Looking back at 2014, one company
can be singled out as hammering the final nail in the 3rd party
cookie’s coffin. That company is Facebook and they delivered the final blow
with their release of Atlas. What is Atlas? This is what Facebook has to say: “Atlas is the people-based way to serve and
measure campaigns as buyers move between devices or into the offline world.” A
shockingly simple concept…target actual people not pixels. When you target a
known audience that is people based, amazing things can happen and the
rewards will be enormous for the companies that can facilitate this type of
buying. Why? Because targeting people not only allows advertisers the ability to
reach their audience across channels and devices but people based marking can
close the online/offline attribution gap. Let that sink in for a moment…
As more advertising & marketing
dollars make their way online, CMO’s are being asked to deliver more
transparency into campaign results and return on investment. Will there always
be a place for “soft” metrics? Yes of course! Every brand needs to fill the top
of the funnel to build awareness and intent but at the end of the day if
you’re building awareness that doesn’t translate into actual sales, profit,
revenue etc…unfortunately you may end up joining the dodo and the 3rd
party cookie. Now with the ability to start tying ad exposure data to revenue,
the pressure is going to be ratcheted up and that pressure will start from the
CMO and will filter down to every vendor, agency & media partner.
So if you are a media company that
has hitched your wagon to the 3rd party cookie as a means to
identify and sell your audience to advertisers, how can you ensure that as the
cookie goes away you’re not following it? The answer is simple, the email
address. The often overlooked, unsexy, workhorse of the web is the key if you
want to adapt to the current environment. No other technology, channel,
communications protocol etc…that I can think of has been declared extinct more
times than the email address. Yet it’s not. Not only did email never die, email
is now more important than it ever was. Mainly because the email address has
always been the unique identifier of the web, which in turn has helped make it
remarkably adaptable. The truly ironic part of this story is the fact that
Facebook has primarily been responsible for email’s resurrection. The social
networking site once heralded as an “email killer” has single handedly brought
email (and the email address) back to the forefront of Ad Tech. Facebook did
this first via their Custom Audience solution (which I wrote about here: To
Facebook: Thanks For Everything, Email) and now with their release of Atlas
by Facebook.
The impact of Atlas on email’s role
within Ad & Marketing Tech cannot be understated and absolutely must not be
underestimated. Why? There are a few reasons but it boils down to two:
1.
People
Based Marketing – email has always been a people based digital marketing
channel. People subscribe to and open emails, not robots. And because email is people based, brands can
tie tremendous amounts of data (transactional & behavioral) to an
individual profile that can be used for segmentation and targeting on a 1:1
basis. Just look at the scale and reach of major retailers in the US, from an
email database standpoint and that should help provide some context as to why
email is so important. Targeting known & addressable audiences AKA people, provides a ROI that is
unmatched by any other marketing channel in existence.
2.
Attribution
- This really should be quite clear. When you advertise to people not
pixels, you are then able to significantly narrow the attribution gap. Not only
the online attribution gap, which is limited because of the use of 3rd
party cookies but the online to offline attribution gap. And how do you tackle
the online/offline attribution challenge? Well, real people buy products…the
challenge has been how do you match those real people buying real products back
to online advertising? The answer is the email address of course. Which is
exactly how Facebook via Atlas as well as with their DataLogix partnership, is
able to attribute offline sales back to online campaigns. For the sake of
clarity, I will re-state what makes this all possible, the email address.
This quote is directly from the Atlas site and should
provide a glimpse, from the advertiser perspective, as to where Facebook is
headed:
“Identity data gives advertisers 20/20 vision for ad serving or
tracking. Atlas offers clarity into the whole picture of ad campaigns for on
and offline conversions.”
- Braden
Hoeppner, CMO at Coastal Contacts
And here I am, thanking Facebook
again for all their hard work and effort in educating the marketplace on the
benefits of marketing to human beings. For far too long, many of us at
LiveIntent have been standing on a soapbox, shouting at the top of our lungs
that email subscribers are your companies best and most valuable asset. Our
message hasn’t been ignored but for media companies who for a very long time
had no reliable way to monetize & ad serve into email, the channel has more
often than not ended up on the backburner vs. being the focal point of an ad
product strategy. But the tides are about to turn and all of us at LiveIntent
will no longer need to evangelize the benefits of people based marketing, the
marketplace will do that for us…
As with any enormous market
opportunity, there is always more than one competitor. In the case of people
based marketing, Facebook is certainly not the only player in the space. The
value of logged-in user data at scale has opened the door for new media players
to evolve, which happen to be some of the largest and most well funded companies
in existence:
- Amazon
- Walmart
- eBay
- Alibaba
- Apple
Amazon is on pace to do $1B in advertising revenue this year.
I repeat, Amazon is on pace to do $1B in
advertising revenue this year. Making them the 7th largest seller
of digital ads in the world. And Amazon “is
stepping gingerly into digital advertising”. If this does not serve as a
wake up call to anyone selling digital ads, then nothing will. Every one of the
above companies can measure ad effectiveness against actual transactions; they
are your new competitors and they are going after the same pool of ad dollars
as everyone else…
Now the question becomes…can you adapt?
