Why Cookie Deprecation Should Be Celebrated
Someone pass me the bubbles. Get the vintage out. It’s time to get the party started. Cookie deprecation is almost here, and with it, industry naysayers can finally be put out of their misery.
I do not understand the anxiety with cookie deprecation. This is a moment that should be lauded and celebrated – not feared. Finally, the harbingers of marketing attribution will be found out for what they are. Peddling salespeople with little to no knowledge of how marketing does, and should work.
There is no doubt over-time Cookies have helped marketers achieve success by tracking user behaviour, however the concerning problem I have with 3rd party cookies is how they are used to determine ‘effectiveness’ of advertising, most notably by feeding into our industry’s over reliance on digital attribution.
Why are ‘cookies’ disappearing?
With growing concerns around internet privacy and transparency, Google announced in January 2020 that they would phase out third-party cookies [in the next two years] to create “a more privacy-first web”. Apple followed suit a few months later actually blocking all 3rd party cookies on their Safari browser with the release of iOS14.
With 3rd Party cookies disappearing from internet browsers, impacts will invariably be felt across the marketing world, with a reduced ability to target [and retarget] internet users throughout their internet journey.
For most brands the greatest impact will be the loss of visibility on ad effectiveness and conversion tracking. Many brands are using 3rd party cookies, to track an internet user’s journey from seeing their ad, then reserving it in various formats and channels across numerous websites and journeys over a period of time, until they ultimately come to their own website, and then make a purchase.
Which leads us to attribution…
Why ‘attribution’ should die
In a vain attempt to quantify the financial return of a customer purchase, to any piece of communication on the journey, attribution in many shapes and forms has often led to C-Suite conversations about justifying departments and cost centres simply by showing a financial return that advertising and marketing have delivered.
This has led to a greater reliance on “attribution models” to show the financial effectiveness of marketing activity. The ambition of attribution modelling is that each event in a customer’s journey to purchase is rewarded with the value it drives.
The thing is – not every piece of advertising or branded communications HAS to be – or even CAN be – attributable. Marketers struggle to even agree on the type of attribution that should be used – either first touch, last touch, or multi-touch attribution. CFOs are more worried about the overall financial health of the brand or business than just a positive return on investment.
Ask any marketer to attribute the advertising that led them to buy their last major purchase. If we are unable to accurately attribute what advertising, channels, or creative led us to whatever purchase decision we made – how can we trust a number of any different attribution models to tell us?
It’s impossible to attribute every variable within and without a brand’s control for every customer purchase – and by trying to solve that problem – you’re attacking the “player, instead of attacking the ball”.
ROAS – “Reckless Overstatement of Ambiguous Stats”
I’d argue that anyone who talks to you about “ROAS” (Return on Ad Spend) as the sole success metric of marketing, campaign or advertising effectiveness is selling you snake oil.
Firstly, any metric or model that focuses on “cost” or “investment”, in relation to “revenue” is measuring efficiency, and not effectiveness.
Efficiency metrics (ROAS, ROI, CPM etc.) give marketers a gauge on how well they are maximising their investment. While many campaigns may look to these metrics to show they are marketing efficiently – these metrics don’t show how effective the campaign has been.
Secondly, a lot of time and focus has been spent on developing ‘multi-touch attribution’ scenarios and allocating a ROAS score as a success metric for a channel in order to justify campaign effectiveness.
Ironically, focusing on channel or campaign ROAS is a losing game if you want your brand to grow.
By focusing investments on ROAS, marketing teams are scooping up the customers that are in market for your products and services at that moment in time, and not generating longer term salience that is necessary to acquire future buyers of your product or service.
Hopefully, as cookie deprecation removes the ability of platforms to give marketers ambiguous statistics on investments, our industry will see the death of our conversation around “attribution”, and banish the acronym ROAS to the scrap heap.
So, what’s the answer?
One alternative, while not perfect, involves implementing econometric or Marketing Mix Modelling, encompassing the relative performance across a range of factors and the marketing channels that a brand uses.
In order to develop a robust econometric model, one of the first key steps is to identify and decide which relationships and factors for a particular purchase or conversion event are most important, as well as the nature of those relationships and factors. Ultimately, subjectivity around these factors means that even the most robust econometric modelling will be flawed.
However, even econometric modelling has been contested from Ehrenberg Bass in a 2018 paper from Dawes, Kennedy, Green and Sharp outlining that “econometrics cannot estimate the relative strengths of advertising across various media in causal marketing mix models of aggregate sales, unless there are many data for all possible combinations of variable values.”
So, what’s the answer?
One alternative, while not perfect, involves implementing econometric or Marketing Mix Modelling, encompassing the relative performance across a range of factors and the marketing channels that a brand uses.
In order to develop a robust econometric model, one of the first key steps is to identify and decide which relationships and factors for a particular purchase or conversion event are most important, as well as the nature of those relationships and factors. Ultimately, subjectivity around these factors means that even the most robust econometric modelling will be flawed.
However, even econometric modelling has been contested from Ehrenberg Bass in a 2018 paper from Dawes, Kennedy, Green and Sharp outlining that “econometrics cannot estimate the relative strengths of advertising across various media in causal marketing mix models of aggregate sales, unless there are many data for all possible combinations of variable values.”
Focus on Effectiveness First – Not Efficiency
Famed American Business Management Consultant Peter Drucker once opined that “Efficiency is doing things right. Effectiveness is doing the right thing.”
Rather than looking into the efficiency of campaigns and channels to prove their worth, a marketer’s true worth will be to have conversations with CFOs and CEOs about growth and achieving business objectives – the effectiveness of their campaigns, NOT the revenue from their marketing expenditure.
And that’s as simple as falling back to the “3 O’s” –
1.) Business Objectives
2.) Marketing Objectives
3.) Campaign Objectives
Every engagement, briefing, or campaign, starts with outlining – and importantly quantifying – what the Business Objectives are.
If the CMO and its agency are unable to clearly articulate what the Business Objectives are, it’s back to the drawing board.
Like a house of cards, if marketers fail to understand the Business Objectives, everything underneath including Marketing and Campaign Objectives will crumble.
Only once the Business Objectives are defined and quantified can you move into defining and setting the Marketing, and Campaign Objectives.
Quantify your Marketing and Campaign Objectives, giving you clear success metrics at the end of the time period to reflect back on. Remove vanity and false metrics like “Reckless Overstatement of Ambiguous Stats”, and focus on understanding and communicating how your Campaign is delivering against the 3 O’s.
By harnessing the Business Objectives, and ensuring that the Marketing and Campaign activity ladders up to these, will marketers be able to have productive conversations with the C-Suite, and the people responsible for driving overall business performance.
