Behind all the headlines about Google’s imminent retirement of third-party tracking cookies are some near universal truths, not all of which — as it turns out — are fully true.
Many aspects of the cookie transition will have a sizable impact on the way pharma brands, insurers, health retailers and publishers approach targeted media and measurement for years to come. What’s driving it? Privacy. Many of us get creeped out or annoyed when, after buying a pair of sneakers on any given e-commerce site, we’re stalked all over the internet by ads for the very same footwear.
There’s also the looming threat of more government regulation — similar to California’s CCPA privacy law, which is modeled off of Europe’s GDPR — to prevent what some call surveillance marketing. With change on the immediate horizon, then, we present a thorough fact-check of the most widely cited tropes surrounding the deprecation of the cookie.
COOKIE CLICHE #1: To a great extent, they’re already history. TRUE.
It’s widely accepted that cookies, which are kernels of code stored on an individual’s computer or phone while browsing a website, are no longer used by legions of websites to track behavior and/or optimize advertising. Their ultimate demise may be drawing nigh, but third-party tracking cookies are already far from ubiquitous.
Safari and Firefox browsers have been blocking their use for a few years. Meanwhile, Apple already requires app developers to ask permission to collect unique identifiers to target mobile ads.
Apple’s iOS smartphone software alone accounts for about half of all web traffic, according to a 2019 estimate by the U.S. Department of Justice. That’s a sizable chunk of media that lies largely beyond today’s targeting capability.
“Cookies had degraded to 39%-40% even in 2019. And most people began a shift then, regardless of industry, to use other target tactics,” recalls Erica Hawthorne, executive director of digital media strategy at Bayer.
Hawthorne is managing the transition of Bayer’s U.S. pharma division over to non-cookie-reliant media tactics as part of a larger plan to bring digital media in-house by 2022. It’s been just eight months since the division started buying digital media via its own platforms and ad technology and contracting directly with publishers.
At the same time, when Google announced on June 24 that it would push back its plan to remove third-party cookies from Chrome until late 2023 (from the initial deadline of 2022), there was more than a little muted celebration. “I can’t say we didn’t breathe a slight sigh of relief,” recalls Brian Cantwell, VP digital strategy and operations for Bayer’s U.S. pharma division.
With privacy concerns top of mind, in-housing has become a trend among the entire industry, one which is likely to continue.
COOKIE CLICHE #2: Healthcare is ahead of the curve. TRUE.
That’s not a typo. This is one of the few areas where the medical ad industry may actually be fitter than its CPG counterparts, according to Doug Lauretano, a 20-year veteran of media and technology who’s held senior-level strategic planning roles with Fortune, CNN and WSJ Digital Network.
Asked to explain, he responds, “It’s because of their focus on the privacy of a user, be it a prescriber or physician. There’s obviously a lot of regulation around how much you can know about each stakeholder and how you can target, but the healthcare ad industry has been looking for alternatives.”
For one, health publishers have been contextually targeting in a way many other parts of the ad industry have barely tried. This is accomplished either by allowing marketers to target an ad placement alongside content in real time (so whoever’s reading it, regardless of who they are, sees the ad) or by collecting users’ reading habits and creating first-party profiles that brands can target by segment or cohort. Either way, think of it as advertising based not on who a user is but on what they’re reading.
Not only has the healthcare industry been advertising in a much more privacy-centric way than other parts of the ad world, but the industry also developed some unique identifiers as well. These include “tokens” such as the MPI number and prescriber I.D. that offer advertisers alternatives to cookies. Look for such approaches to continue to gain steam.
COOKIE CLICHE #3: The impact won’t be felt in health. FALSE.
The changes that have taken place on iOS and that are coming to Chrome mean many advertisers are having to “revisit the whole way we are working,” said Publicis chairman Maurice Levy recently. But that’s perhaps less the case in healthcare.
“Of the clients we talk to, the use of third-party cookies is not their primary method of driving awareness or trying to interface with customers,” says Jerry Luciano, VP of omnichannel marketing at TGaS Advisors. “It’s a relatively small portion of their portfolio of media, so the impact it’s going to have is relative to their portion of utilization.”
That said, according to a June 2021 study TGaS conducted among pharmas, 74% of respondents believe the cookie-related changes will be impactful or very impactful on their media plans. The response stems from a lack of clear alternatives to third-party cookies and how companies will continue to engage users, TGaS notes.
Half of the respondents said they were actively discussing a plan of action, while the other 50% were in the implementation phase. Mitigation strategies include increased use of contextual targeting/parameters (50%), changes in opt-in strategy/procedures (50%) and first-party identity solutions (42%).
Cookie usage varies based on a pharma company’s size, with the larger ones often having sizable enough budgets to place ads directly based on an opt-in rather than a cookie. But to take a campaign to “a level of sophistication,” says Hawthorne, especially when outside, endemic media are involved, cookies are often relied upon.
Take the physician journey — which, from engagement and awareness to trial, is a long one. “We rely on cookies heavily to connect the journey and to have an always-on connection with HCPs,” Hawthorne notes. “Our reliance is a little bit higher than other people, but that’s a really effective way to make your media budgets efficient.”
Then again, as pharma knows, society is mobile-first and mobile advertising is reliant on mobile I.D.s, not cookies. “We’ll still have significant efficacy even with the removal of cookies,” she continues, adding that a larger concern involves removal of IDFAs, a random device identifier which Apple assigns to a user’s device.
The latter is already occurring. As a result, the industry may be shifting some of its focus to other platforms like Facebook and to tactics that are not dependent on IDFAs.
COOKIE CLICHE #4: This will be a boon for ad tech and agencies. HALF-TRUE.
Publishers and vendors are taking a hard look and dedicating resources to the cookie issue to ensure that media and ad inventory continue to work as before. But the loudest lamentations don’t exactly ring true.
“The pervasive narrative of ‘woe is me’ within the ad-tech industry and ‘end-of-days, we can’t target like we used to’ that you hear from some brand and digital marketers is an interesting thing to me,” says Chuck Hemann, practice leader, integrated media activation, for Real Chemistry.
On the one hand, the transition might put a squeeze on some small and medium-sized ad players. But the larger ad-tech companies, including firms like TradeDesk and LiveRamp, are expected to benefit.
These firms are developing non-cookie-reliant I.D.s and other compliant ways of targeting. The identifiers allow an advertiser to push ads to social platforms and to demand side platforms (DSPs), which manage programmatic buys. Some health-specific DSPs, like PulsePoint, have opt-in at educational and medical institutions and tout that they’re not cookie-reliant.
Other expected beneficiaries include media agencies. In fact, 42% of respondents to the TGaS pharma poll indicated that their agency is responsible for understanding the effect of eliminating third-party cookies and mitigating any impact.
Among his clients, Luciano says, “There’s always a reliance on the agency to some degree.” However, he strongly suggests brands validate their agency approach “to make sure it’s in the best interest of the organization.”
“Agencies are subject matter experts,” he stresses. “You just want someone internally to validate that it’s the best approach for a given company.”
Then again, larger pharma companies are investing in head count around media in order to be able to provide that “litmus test” to some of the recommendations and solutions put forth. Small and midsize pharma may find themselves relying on agencies for that expertise — but if in-housing accelerates, the trend could disintermediate some agencies.
As for the ad-tech players, Lauretano warns, “Those companies that provide this identity alternative may not be providing something that is wholly outside the concerns that have driven these changes in third-party cookies. In fact, those identifiers may be at risk as all this evolves.”
COOKIE CLICHE #5: First-party data will help brands compete with walled gardens for ad dollars. HALF-TRUE.
Of his division’s plan to create an in-house media capability and first-party data infrastructure, Cantwell recalls that the team said, in essence, “‘No, we’re not going to be constantly dependent on all the agencies our competitors are, but we’ll bring market-leading expertise in-house and build out these teams and capabilities.’”
It’s now working in tandem with a transition agency, Media.Monks. But the U.S. pharma division expects all in-house digital media roles to be filled by its own employees by mid-2022.
“We’re making headway,” Cantwell reports, adding that his division benefited from the experience of colleagues in Bayer’s Consumer Health unit. That unit, maker of OTC brands like Claritin and Aleve, executed a similar in-housing transition in 2019.
The delay by Google “gives us additional time to prepare and turn up our third-party data capability and data and analytics function,” he adds.
That includes having first party-data and customer opt-in. With audience consent and acknowledgement, insights can be gleaned into the content that users engage with most enthusiastically and their strongest affinities. That information then will drive media execution, explains Cantwell.
“First-party” is a term referring to the relationship between whoever is collecting the data (i.e., a publisher site) and the person it’s being collected from (i.e., the user). Most health sites, in conservative fashion, already ask users to give their consent for this sort of relationship. Marketers, then, can leverage that consent to target a user based on data they own on that user.
A fully permissioned relationship is thus table stakes, says Lauretano. To that end, he’s heading up a new company which aims to enrich publishers’ own first-party data capability and allow advertisers to target based on responsibly-sourced audience insights.
In some ways, such capabilities are akin to what some of the larger, proprietary publishing platforms – including the so-called walled gardens owned by Apple, Facebook and Google — have been offering to marketers over the years.
Independent health publishers and brands aren’t likely to achieve the scale of a walled garden, of course. But if they’re able to provide the first-party data – the volunteered, permissioned user data that marketers may be more used to getting from the big publishers – it should help them compete in a walled-garden world.
COOKIE CLICHE #6: It’s gonna be easy. FALSE.
Even with a marketing campaign built on fully volunteered data targets, measuring effectiveness will remain a big challenge. And there are even more challenges related to measurement than there are to targeting, Lauretano warns.
“The biggest thing that we’re hearing is around the measurement of these programs, because that’s key. If there’s a level of investment, there’s a hyperfocus on understanding the return that that investment has,” explains Luciano.
That measurement piece is often the part that’s forgotten about or not incorporated into initial design. Read: Pharma has a lot to sort out on the analytics front.
“The old-school, third-party cookie ecosystem created a real data mess for pharma,” says Axtria principal Phil Daniels. “They would get data back that was not necessarily lined up and the question was, ‘Why make that investment in a future with no more third-party tags?’”
COOKIE CLICHE #7: You have two more years until cookies become obsolete. FALSE.
While it’s become common to refer to the extinction of the cookie, that’s actually a fallacy.
Google says cookies will stick around in some shape or form — although to a far lesser extent – through something called FLoC and Google Sandbox, which will allow for some level of third-party cookie, says Luciano. “So it’s not that it’s going away completely; it’s changing and being limited.”
Although the healthcare industry is definitely better prepared than others might be, that doesn’t mean they’re fully prepared. “iOS has already started happening,” Lauretano says. Along those lines, oft-heard statements like “we have two more years” and “this is something that’s coming” are misleading. “It truly is already here.”
Meantime, getting consumers to opt-in to tracking with pharma-owned media properties will be a process. “There is a wide swath of the population, the very digitally savvy, that would be willing to share their data if the value exchange with an advertiser were clear and personalized,” Hemann explains. His hope: that the data-privacy and deprecation-of-cookie conversations force “real dialogue” about the consumer-value exchange.
If not, the road to a cookie-less future could be what he calls a “Y2K moment 20 years later for the healthcare industry: full of sound and fury but actually signifying very little.”