Just because Google’s deprecation of third-party cookies is indefinitely delayed, doesn’t mean that brands should throw their first-party data strategies out the window.
Today we’re going to talk about cookieless advertising and how advertisers can thrive with a first-party data approach.
To help me discuss this topic, I’d like to welcome Eric Wheeler, CEO & Founder, 33Across.
About Eric Wheeler
Eric has over 30 years of experience building innovative, high-performance digital advertising companies. He co-founded and has been the Chief Executive Officer of 33Across since 2007. Prior to 33Across, Eric was COO of Carat Interactive and co-founder and President/COO of Lot21, the award-winning digital agency that sold to Carat in 2002.
Resources
33Across website: https://www.33across.com
Access the latest 33Across Cookie Alternative Report here:
https://www.33across.com/insights/report/advertising-report-q2-2024
Connect with Greg on LinkedIn: https://www.linkedin.com/in/gregkihlstrom
Don’t miss a thing: get the latest episodes, sign up for our newsletter and more: https://www.theagilebrand.show
Check out The Agile Brand Guide website with articles, insights, and Martechipedia, the wiki for marketing technology: https://www.agilebrandguide.com
The Agile Brand podcast is brought to you by TEKsystems. Learn more here: https://www.teksystems.com/versionnextnow
The Agile Brand is produced by Missing Link—a Latina-owned strategy-driven, creatively fueled production co-op. From ideation to creation, they craft human connections through intelligent, engaging and informative content. https://www.missinglink.company
Transcript
Note: This was AI-generated and only lightly edited.
Greg Kihlstrom:
Welcome to Season 6 of The Agile Brand, where we discuss marketing technology and customer experience trends, insights, and ideas with enterprise and technology platform leaders. We focus on the people, processes, data, and platforms that make brands successful, scalable, customer-focused, and sustainable. This is what makes an Agile brand. I’m your host, Greg Kihlstrom, advising Fortune 1000 brands on Martech, Marketing Operations, and CX, bestselling author and speaker. The Agile Brand Podcast is brought to you by TEKsystems, an industry leader in full stack technology services, talent services, and real world application. For more information, go to teksystems.com. Now let’s get on to the show. Just because Google’s deprecation of third party cookies is indefinitely delayed doesn’t mean that brands should throw their first party data strategies out the window. Today we’re going to talk about cookieless advertising and how advertisers can thrive with a first party data approach. To help me discuss this topic, I’d like to welcome Eric Wheeler, CEO and founder of 33Across. Eric, welcome to the show. All right. Thanks, Greg. Glad to be here. Yeah. Looking forward to talking about this with you. Before we dive in, why don’t we get started with you giving a little background on yourself and your role at 33 Across.
Eric Wheeler: Sure. I started 33 Across 17 years ago, which is amazing. Yeah. Congrats. Yeah. The biggest job I’ve ever had other than being married and being a father. And we started 17 years ago and it was a team of great engineers and people with a real pioneer mindset. And the whole mission was really to turn this massive amount of unstructured data that the internet provides into predictive outcomes for brands. And we’re still doing that today. And we’re really focused on creating addressable infrastructure for publishers, brands, and everybody in between. My background before that, I had about 15 years before 33across on the agency side. So before being on the publisher technology side, I was 15 years leading teams at agencies like Ogilvy, Kara, and even small agencies.
Greg Kihlstrom: Great, great. Well, yeah, looking forward to talking about this. And before Google’s kind of indefinite delay, you know, we were talking plenty about the cookiepocalypse or whatever, whatever you want to call it, what was about to bring, talked a lot about first party data strategies and had a few conversations, you know, post that, that more recent announcement from Google. But I want to really dive in today and talk about cookieless advertising and conversions and wanted to start with, you know, certainly you have great experience and background here to be able to talk through this. Could you define for us, you know, what exactly do we mean by cookieless advertising and maybe give a little history and context on it?
Eric Wheeler: Yeah, happy to. So If you step back and kind of why cookies and the cookiepocalypse made such kind of a big deal, you kind of have to go back almost 10 plus years and look at programmatic advertising. This has been around for over 10 years and programmatic is the real-time system where most of the advertising you see today on your phone, your computer, your connected television is actually auctioned and bid on by thousands of advertisers in milliseconds right before that ad is shown. So programmatic has built this ability for all of this to be auctioned to ultimately drive the right advertising opportunity for a brand and a fair dollar for the publisher. And why that’s really important and to bring up is that most of the bidding data and attributes that power programmatic historically have been the third party cookie. So, you know, if we if we look at kind of where the What that means is that third-party cookies were the standard for all of programmatic advertising for a number of years. Apple, Google, everybody was playing nice. And then a number of years ago, Apple said, we’re going to deprecate cookies. We don’t want to play this game. We’re not going to do that. So what you saw was Safari browsers, predominantly, and a few others, stopped carrying third-party cookies. And that made it almost impossible for programmatic to work at a scale level on Apple or Safari browsers, for example. And it left other browsers like Chrome and Edge. So it’s kind of like a Monty Python skit where one arm gets cut off. So what you’re looking at is, now it’s really only been you. And as Apple has continued to grow its Safari scale, and everyone has an iPhone, for example, in a Safari browser, you’ve seen that programmatic has really only been delivered to Chrome, Edge, and other places. So now with, with Chrome cookies deprecating and they are, they’re just doing it in a different way. We’re going to see, we’re going to continue to see that addressability dwindle.
Greg Kihlstrom: Yeah. Yeah. So, um, what, what role does a company like 33 across play here in this, in this space?
Eric Wheeler: Yeah, well, so what’s wild is today over 50% of publisher inventory today does not have a cookie. Meaning that that programmatic backbone of advertising and monetization doesn’t work on over half of the internet grand supply. And the future growth channels like CTV, app, digital out of home never had cookies and won’t. So brands need a better way to deliver and measure in a cross channel way. 33 Cross has built the technology, we call it Lexicon, and this enables the programmatic ecosystem to transact, optimize, and measure without needing cookies. We also make the entire system more privacy safe than cookies, it’s faster in real time, and we built in the ability to integrate across CTV, app, and digital out of home. We’ve literally created kind of the ATM network that enables all of the transactions to continue and the dollars to keep moving and growing without the need for cookies.
Greg Kihlstrom: Got it. Got it. Yeah. And so you kind of already touched on this, but as marketers and advertisers, I think we all, we all like drama. So, you know, saying that the cookie apocalypse was on and then it was completely off to your point, third party cookies are eventually going away. You know, Google’s announcement, there’s, there’s a lot of nuance in there, but it’s not that they’re, they’re going to be around forever, but you know, third party cookies are going to be around for a while still. at least to some degree. So, you know, why is this cookie-less approach still so important to advertisers today?
Eric Wheeler: Yeah, Greg, this is a really good point. I mean, we know what Google’s doing. Back and forth delays. Now they’ve decided they’re going to let the user decide this, you know, and make the choice. Well, the last time this happened, you know, Apple did this in-app with the Apple tracking transparency framework called ATT for short, where users decided what tracking data they were comfortable with or not. They put that forward and tracking data went down to near zero. And that channel has dropped dramatically in how brands use that channel to deliver targeted advertising. The money just completely dried up. I think the same thing is going to happen with Google. When they present these tracking choices in a way, it’s going to have the same result of deprecating cookies significantly. I don’t think they’ll go away completely, but I think we’re talking about, you know, a 40% share, you know, down to 15%. Yeah. We think that this is really motivated by the, by Google’s challenges with the, the DOJ and making the move, making this move to be more user driven, I think allows them to get to the same outcome, but not, you know, not being them driving
Greg Kihlstrom: Yeah, yeah. Got it. Got it. So like I said, at the top of the show, you know, we’ve certainly been talking about first party data strategy for a while, I’ve written, you know, about it in a few books of mine as well, you know, so certainly, I’m, I’ve seen the the value of this in a lot of different ways, but wanted to get your thoughts, since you work with a lot of brands. on this stuff as well. Just wanted to talk about brand readiness for first party data. So you know, how would you describe the importance that brands adopt this first party data strategy components as well as a probabilistic solution? And I probably need a definition on that, but to their to their advertising and marketing strategies?
Eric Wheeler: Sure, I think the you know, given how quickly things are evolving, and how much cross-channel or omni-channel is critical to driving outcomes. And really, the other part of this, brands are really concerned with a positive ad experience. How many times have you seen the same ad on connected television again and again and again? The real reason there is that there’s no effective way to measure and to, that’s called frequency cap, all of that stuff. And it becomes a very big problem. Brands are, you know, should be leaning into their, in building their own first party data and, you know, building, and we’ve seen this with retail media networks. They have an unbelievable loyal base of customers that are, whether it’s Walmart or Target or Costco, et cetera, they’ve all now leaned in to create their own first party data capabilities. And now they’re finding ways to expand and scale the targeting with alternative ID solutions like 33across and Lexicon to add reach and scale and do that effectively.
Greg Kihlstrom: How do you feel as far as readiness in general? I mean, I felt like, you know, as much as Google pushed their deadlines back or so for deprecation and everything, I still felt like talking with brands, there just weren’t enough brands that were truly ready for that. But, you know, what’s your gauge on, you know, on readiness to truly adopt first party data strategy more broadly with brands?
Eric Wheeler: It’s changing. pretty quickly. Yeah. I think what we’ve seen, there’s a general lack of trust brands have now with Google. They have a real trust issue right now. We’re going to deprecate. We’re going to do it tomorrow. We’re going to do it next year. Right. Now we’re not going to hold off. We’re going to do it. Now we’re going to let you users decide. And there’s been a lot of things like privacy sandbox and a bunch of things that were rolled out that were really not ready for primetime at all and only worked on Chrome browsers, which again is a smaller and smaller portion of the kind of open web and certainly didn’t apply to CTV and other areas. So it’s your point. I don’t think brands were generally ready for a shut off when it was first announced. And today, I think they’re still a bit behind. That said, some categories are leaning into cookieless in a pretty big way. We have we run not only do we have all of our lexicon data, but we have our own SSP and our exchange where we’re driving cookieless monetization using our Lexus technology as kind of a post cookie exchange. And we publish a, from that data from the exchange, we publish a report called the cookie alternative report that it’s done every quarter and it tracks how brands and publishers are leaning into cookieless. One of the stats that’s very heartening for us is something where we’re tracking the share of voice and how much certain categories are spending and investing in cookieless quarter over quarter. And I’ll, and I’ll share some data and we’ll be happy to share this with your listenership. Yeah. We have Q1 of 2023, retailers had a share of voice in CuckooList that was about 7%. Fast forward one year later, Q1 2024, retailers had a share of voice of 30%. Wow.
Greg Kihlstrom: Wow. So over four times the increase in a year. Yeah.
Eric Wheeler: Wow. Incredible. And that’s available. You can see that we track all these insights at 33across.com. We’ll put the links in for your team. But I think what you’re talking about, it’s kind of interesting. It’s kind of red. If you remember the classic kind of red ocean, blue ocean. Cookies is this red ocean where there’s a ton of competition. There’s less and less inventory happening. And so to bid and buy becomes more costly. You end up not winning. And then you look at a Safari or other impression on the same quality site, which has very little bidders on it. is less expensive and you have a much higher win rate, like a 10 times greater win rate at a dramatically lower CPL on really quality publishers. So you’re really missing out if you’re not leaning in cookie-less. And certainly retailers, because of how they’re focused on driving retail outcomes and offers, have leaned in the fastest. We have other categories right behind, but definitely retailers are the top guys.
Greg Kihlstrom: Yeah. And I want to dive into the identity resolution part in a second that you touched on. But before we go there, you touched on something else that I just want to highlight here, which maybe I’ve talked about a couple times, but want to just kind of double down on it. This is not only like first party data strategy is not only better for from a consumer privacy standpoint and all that stuff, but to what you’re saying, it’s actually better for brands. So in other words, there’s always resistance to change and everything like that. But from everything that I see from what you’re saying, I’m sure, I’d love to hear your thoughts on it as well. This is actually a positive, like it’s a win-win, which is rare enough in life, but right? Is that how you see it?
Eric Wheeler: Yeah. There’s no doubt that both advertisers or brands and publishers have leaned into kind of owning and empowering their first party data, leveraging the relationships they have with their customers, right? So the publisher is the one who gets consent from a customer to use data. And same thing with that brand advertiser because of the relationship they have with their customer. So that’s critical. I think the challenge has been that While a wonderful data set obviously opted in and completely transparent, the challenge is that most users, most consumers across the web are not, at least in the open web on browsers and so forth, are not logged in. They’re not logged into websites. So you end up having authentication rates that are well below 10%, sometimes 5% or less. So it becomes very hard when you’re using that data to get the scale. It’s very, it’s very obviously predictive. It’s a super strong signal. It’s a wonderful. person to person kind of data capability, but it doesn’t scale. So what we’re seeing is more and more what advertisers are doing, say, here’s my first party data, and now I want to build a predictive or a modeled audience off of my customers that people that, you know, without knowing anybody’s name or anybody’s personal information have same attributes, similar kind of behaviors, because that’s very predictive and driving scale. So you’re seeing a combination of authenticated and then statistical or probabilistic models going together. And that’s how that’s evolving.
Greg Kihlstrom: Yeah, yeah. So I want to talk a little bit more about identity resolution here. And I know you talked about it briefly, but I want to look at it a little bit more. And first, for those that, you know, I know, we’ve talked a little bit about this on the show, but for those that are maybe a little less familiar with the term, starting with a definition, you know, what do we mean by identity resolution? And, you know, then, you know, how broad reaching should it be? And why is it why is it important that we that we focus on this?
Eric Wheeler: Yeah, identity resolution is the discipline of recognizing people, devices, browsers, et cetera, across channels, across multiple channels, and associating them with information used for marketing and advertising to allow for more personalized and measured programs. There’s a lot of tools and data techniques, and it’s governed by state and national guidelines in terms of privacy and what can and will be used. Many states are in are constantly evolving and improving their state-level guidelines on what and how data will be used for their residents. The IAB Tech Lab has done a really outstanding job of setting the standards for identity resolution in programmatic advertising. We’ve worked very closely with them. So what it’s done is created a framework of transparency. So that brands can see what data is being used where and everybody in the chain from a demand side platform, a DSP to an SSP to the publisher can see what data is being used and how. So there’s new specifications that have come out this year. And we’re part of the working group that’s developing that as part of membership with the IAB. But it’s phenomenal. And what it allows for is really any type of resolution that a brand would want to do. In some cases, you’re going to want authenticated users. Maybe you’re going to want only first party publisher, just data there. Maybe you want statistical. Maybe you want contextual. Maybe you want to mix. That’s all fantastic. Everybody just needs to know what’s being used and where. And that’s what this framework does.
Greg Kihlstrom: Yeah, yeah. And I know, we’ve, we’ve talked about the, you know, the importance of doing this, you know, the third party cookies are, again, they’re, they’re on the they’re on that trajectory to be obsolete, whatever timeframe, but you know, is, is that deprecation? You know, is that the big reason to do identity resolution without Without cookies, are there other, you know, why should brands in addition to that be focused on doing identity resolution in a cookie-less way?
Eric Wheeler: Cookies are already in the rearview mirror. Yeah. The majority, over 50% of the open web and every growth media channel, CTV, digital out of home, et cetera, doesn’t have cookies. So already you’ve got less than 50% of the open web is cookieless and shrinking. And CTV never had or will have cookies. So if you’re a brand that wants to reach and change perceptions or drive out actions and outcomes from advertising in a real-time, biddable environment, you need to be working with companies, demand-side platforms, DSPs, SSPs, supply-side platforms, that support ID resolution technologies like 33acrosslexicon and many others. You need to be thinking about both, one, that kind of blue ocean opportunity to drive near-term results where I can get quality impressions that are literally going unsold or undersold at great value, and setting up the long-term path that is truly cookie independent. I think there was a hope by brands, you know, a year ago that Google is just going to solve this because everybody has a lot of work to do. And it’s, you know, in every marketers having been on the agency side for a long time, every brand is struggling. They don’t have the team. They don’t have the technology. They don’t have the time. So if a big provider can come in and solve for it, that’s great. But in this case, it’s your customers. It’s your data. And you need to take control of it. And you need to be working with partners and platforms that can help you take responsible actions. to drive outcomes that don’t rely on someone else solving it. And I think the near term absolutely is you can be getting incredible value, results, conversions in a cookie-less environment today, and you’re going to be setting up an infrastructure that’s going to be able to withhold whatever comes next and not be relying on
Greg Kihlstrom: Yeah, yeah, definitely. And, and so, you know, we’ve spent quite a bit of time here talking about from the brand, you know, from the advertiser perspective, even from the publisher perspective, as that end customer, you know, you mentioned, you mentioned a little bit about, you know, seeing the same thing over and over again, the, you know, the frequency capping and everything like that. But, you know, how does this, how does this benefit me as, as an end customer, really, in the end?
Eric Wheeler: ID resolution and cookie-less capabilities support the ad-supported free content that everyone enjoys so much. The majority of the content we consume today, the really good and rich stuff, is ad-supported. And by allowing more dollars to flow to these content creators on Safari browsers, for example, They get to stay in business. They get to continue to create the long and short format video and text-based content that we enjoy when we’re connected everywhere in the world, on the bus, on the train, wherever that is. So that’s number one. You’re really supporting content and they’re under threat for sure because of the amount of dollars that have not been able to go to them and they went to other places like Facebook and so forth. Secondly, there’s a lot of that kind of ads will be more effective. You’ll have better offers and more relevance. You have better ads, not more ads, which I think we’re seeing many publishers do now with enabling technology. They’re reducing their ad load and having better, more targeted and less number of ads. And then we talked to obviously about the frequency capping, and honestly, the ability to stop retargeting after you’ve already bought a product, right? That’s the other part of it. I bought those shoes two weeks ago, stop. And that is the fragmentation, right? And so they’re, oh, I might be over-delivering, but we might still get this person. And that’s ultimately because that ATM-like ability to kind of recognize that a transaction was done and then send it back to the system isn’t there at scale. And that’s really where we’re focusing.
Greg Kihlstrom: Yeah, love it. Well, Eric, it’s been great talking with you. Thanks for joining the show. One last question before we wrap up here. You’ve given a lot of great advice and insights already. For those listening here, maybe feeling a little behind the curve on the first party data strategy. What’s a piece of advice you’d have for them to move a step forward?
Eric Wheeler: Well, and you’ve covered a lot of this, which I completely support as a brand. You have to bring all of your data together in one location or one framework, whether it’s a CDP or something of that ilk, where you can ensure that you know what you have, you know your rights, you know your consent, you work with your internal and agency teams to ensure that that foundation is secure and actionable. It’s critical. And it’s hard to do that. But once you do and you have that, you then have the ability to lean in and start testing, uh, explicit programs that aren’t cookie based and start testing cookie versus not and do the, all the other things that you, you can put your teams together, uh, to, to really start to AB test and do other things. You’ll be really pleasantly surprised at how. Large of an opportunity cookie list is today, but fundamental thing you need to do is make sure that you’re driving that foundation of, uh, data awareness, first party data knowledge and respect. And then forcing that through your major partners to make sure that they are also going to act with the same standard in regard that you have with your customers.
