Adverity CMO, Harriet Durnford-Smith, on why the loss of third-party cookie data is a good thing for the marketing industry and how our strategy for marketing has evolved.
During the pandemic, we all experienced a radical shift in consumer - not just buying - behavior. There’s little point going over the details, we all know it by now - how we consume media, how we interact, how we shop...all radically changed. This, combined with a hugely challenging market environment that threatened the sheer existence of many companies, created an unprecedented level of uncertainty and a need to adapt.
As a result, CMOs acted - budgets were reallocated, reduced, and shifted to digital in unprecedented volumes to align with the new norm. But just when we all sat back, breathed a little sigh of relief that maybe the impact from Covid was finally slowing down…along came Apple and Google with the announcements that third-party cookies are off the table.
Talk about a double whammy. You’ve basically got this massive shift in consumer behavior and a massive shift in spend towards digital marketing, and then the single most popular method of measuring the impact of that spend is suddenly set to expire.
Even though the 3rd party cookie deprecation has been postponed until 2023, there's been chaos in the marketing C-suite again. The cookie - that little snippet of code that has guided so much of a brand's digital strategy for more than 25 years - will eventually be a thing of the past and with it, multi-touch attribution pretty much goes out the window.
But I want to challenge this notion that it’s another epic disaster for the marketing industry. In my opinion "The death of the third-party cookie" is indeed a moment to celebrate. Though the future of digital marketing may seem murky right now, this doesn’t mark the death of effective digital advertising.
Multi-touch attribution has reached a breaking point
Let’s be honest, the extent to which third-party cookies have enabled multi-touch attribution has reached breaking point. These days, it seems as if you only have to think about purchasing an item or downloading an ebook, and you are bombarded on all fronts by ads for that product or company every time you go online. And the impact on the customer experience is notable - it devalues brands and reduces trust, and this is something businesses will now be forced to think about more. If users won’t click on the ad because they don’t trust the brand, the purpose of advertising is lost.
Marketing today has become overly focused on cookies and tracking, and being able to track every single point of a customer journey - often to the detriment of anything else. There’s this narrative that has built up where 'everything has to be attributable' and marketers are therefore focused on tracking every available digital touchpoint. But, while it’s important to understand how your customers purchase your product or engage with your brand, it shouldn't be to the detriment of how your brand is perceived.
Adapting to the new reality
The reality is that an overreliance on multi-touch attribution has meant marketers have never really acknowledged the extent of its shortcomings. And this has stopped advertisers and marketers from innovating and finding better ways to interact with prospects and customers.
As a marketer with an innovative mindset, you should always be asking yourself questions like "are we too reliant on this technology?" And those same innovative marketers will be the ones who are less vulnerable to changes in technology and regulations, by taking it back to basics and coming up with clever alternatives and tactics that really resonate with their audience. Brands that start to evolve their targeting away from targeting people and towards targeting content and relevancy will do well and forge more trust with their audience.
Bear in mind, it is not just me saying this. Tina Moffet, Principal Analyst at Forrester, made the same point as a guest speaker on one of our recent webinars: marketers need to build 1:1 customer experience based on zero-party data.
From theory to practice – how we’re doing it
Great in theory, but how about in practice? How does this affect performance and marketing efficiency and ROI? Well, to give you an idea, let me share some insight into our own marketing operations at Adverity.
One of the core metrics we look at on an almost daily basis is our inbound funnel, and how effectively we are capturing and nurturing demand for our sales teams. Almost overnight, due to changes in iOS14, we lost our ability to re-target potential new customers across a number of our key platforms. To give you an idea of the scale of this impact, and I’m sure this isn’t news to most marketers, our available audience size has shrunk by between 40-70% depending on the channel. Naturally, an impact on inbound numbers on a board report to an untrained eye looks like a disaster. But, is it?
When you compare the past four months to the previous four, since retargeting restrictions have been in place, our conversion rates for high-intent are up by 25%. Now, at this stage in the funnel, 25% is a pretty significant increase. And when you think about this logically, the people that are coming to us and engaging with us have a higher intent than the higher number of lower-intent leads that we were previously collecting. This has positive impacts further along the pipeline, shorter sales cycles, higher win rates, and more qualified opportunities - all contributing towards accelerating pipeline velocity.
To help illustrate this point, above is an example from Refine Labs (and I’m a big fan of their demand methodology). This diagram illustrates the advantage of quality vs quantity and the message is obvious – fewer high-quality leads or engagements beat a higher number of lower-quality ones every time.
Make sure to monitor the right metrics
This is exactly how we have begun to split our funnel and, importantly, we measure the success of high and low-intent channels differently. High-intent channels are for capturing demand and so we are looking at metrics that are evidently linked to revenue – leads that convert, demo bookings, deals created, and ultimately, revenue closed. Low intent channels on the other hand are about generating longer-term demand by raising awareness and by educating - PR, thought leadership, educational videos, etc...Revenue metrics here are not relevant, as that is not their objective, so we are looking at things like reach, engagement, mentions.
And, if done correctly, you should start to see a correlation between the two, and the time lag will vary depending on your market and buying process. Importantly, as you begin to reframe your activity and apply the right metrics to the right types of activity, you can still build up a picture of how your audience moves through the funnel without the ability to track every single click in the user's journey.
Look to other tools and strategies
Now, admittedly, this strategy is not going to fit every business model. We’re a B2B SaaS business but if you’re B2C it is debatable whether you can split your funnel into low/high intent in the same way (Can you? Let us know, leave a comment B2C marketers). However, the general principle is the same. Try and think creatively about how you can use zero and first-party data to understand your customer journey, and from that how you can plan activities that address key moments.
And you don’t need multi-touch attribution to do this. There are hundreds of tools and strategies out there that provide different ways of understanding performance, such as segment analysis, cohort analysis, market mix modeling. How about good old-fashioned A/B testing of creative versions? Necessity is the mother of invention and it will be interesting to see which non-cookie-based tracking solutions come out of the wash.
Marketing existed before the internet
It’s important to remember that marketing existed before multi-touch attribution and - shock and horror incoming - even before the internet. But, the marketing profession has responded to today’s digital-driven world by coining new terms for existing concepts, to make them seem new and different, when in reality the well-established and still highly relevant principles of getting the right product, in the right channel, to the right audience at the right time are as relevant today as they have ever been.
To give you an example of this at its best, some of the best marketing I’ve seen in the past decade has come from an unlikely source: Kochi, India. In an article in the Harvard Business Review, author Dorie Clarke, a marketing strategist, published author, and professional speaker who teaches at Duke University recounts a trip she made to a small hotel in the beautiful seaside town on the west coast of India.
“Like all hotels are required to do, they photocopied our passports and took down our contact information. But they’ve made better use of it than anywhere else I’ve stayed. Having your passport means they have your birth date — so they make it a point to send an effusive, personalized birthday email. “We fondly remember your stay with us and your birthday today. All my staff joins me to wish you A HAPPY BIRTHDAY!” They’ve also emailed us on Valentine’s Day, Easter, and Christmas, which means that I hear from them more frequently than anyone besides my mother. And the close of each email is a link to TripAdvisor and a request to write a review if we haven’t already done so.
This example is what every marketer needs to do now - build 1:1 customer experience based on zero-party data. It’s zero-cost marketing, but it’s friendly, personalized, and keeps them top of mind better than most Fortune 500 companies.