R.I.P. Cookies. Why customer experience matters more than ever


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Marketing in the Internet age has seen several assumptions cast in stone:

1. Cookies: targeting and attribution has been fuelled by cookies, which were invented 25 years ago in 1994.
2. Ads: total US digital ad spending in 2019 was $130B, versus $110 billion for traditional ads.
3. Data: it was cool for brands to take the approach that ‘we have your data, and we can do what we want with it, as and when we see fit.’

Brands can track you, they can follow you across the web, they can target you with ads, if they are relevant – awesome. Therefore it comes as no surprise that traditional channels of communications – TV, radio, newspapers – are all giving way in our increasingly to digital lifestyles.

Meanwhile the Internet and smartphones are making us pickier and more informed than ever. But the natives are restless. We do not want to be tracked like animals in the jungle. We value our privacy more than we ever have done. My data and personal profile is mine, not yours. Where are our private property rights when we need them?

Google dropped its “cookie apocalypse” on the marketing industry earlier this month, when it announced that they will be phasing out the use of cross-website cookies, which have underpinned digital advertising for 25 years. They will also “obsolete” third-party cookies that follow internet users from site to site, and can trace their browsing for months and months.

Google’s move will drastically curb the ability of brands to extract private and sensitive insights about us. While the advertising industry has known for some time that third-party cookies are being consigned to history, slowly eliminating the basic concept of an open web that has dominated marketing matters for decades, Google’s news will totally disrupt the global digital advertising supply chain.

Does this mean Google, Facebook and Amazon will suffer? Or does it mean that the main gatekeepers will only get stronger, given the massive datasets they have on just about everyone?

While we are on it, why are digital ads so expensive? Welcome to something called ‘oligopolistic pricing’ . Is that a disease? No, this is microeconomics 101. The best prices for anyone occur when you buy goods and services in a freely competitive market with lots of suppliers. If you do not have free competition, then you move into an oligopoly – this is where a few suppliers effectively control, or own a market.

This does not necessarily mean its nefarious activity, it could just be that the brutal facts of economic competitive life is such that a few suppliers are left standing in the end. The digital ad business effectively operates like an oligopoly, where three companies dominate. Google, Facbook, and Amazon are fast approaching over 60% share of all digital ads globally. The result of oligopolistic markets is consumers pay higher prices and suppliers make better margins.

So what about data privacy. The “wild west” attitude towards data during the past decades seems to be fast coming to an end. My data is mine, so who said you could sell it to third parties or use it for your own profit motive, other than it helping you service me better?

Be it GDPR, the California regulations, more and more regulation is coming. Industry refuses to fix the problem, so the government through the political process is intervening. We know how that works: “I’m from the government, I am here to help.”

So what is a marketing savvy executive to do given the massive shifts taking place today? We still have to make our numbers, Wall Street is relentless in the forward progress they want every company to make, every year.

How can we get to customers on a cost effective basis, and still be moving at the speed of digital, the speed of data? Digital ads are expensive, cookies are crumbling, and everyone wants their privacy back. Do we go back to Super Bowl ads at $5.6 million for a 30 second ad this year?

How about vendors agree to use a brand’s customer data and the best science to anticipate what to offer your customers at the right time, at the right price, in whatever channel they chose to use to interact with you? No there is a challenge. Lets bring maximum science to bear on customer experience.

Jean Belanger
Currently CEO of www.cerebriai.com. After graduating (LSE), I joined Wood Gundy. I left to start a VC fund, investing in start-ups. 3 went public. After 15 years in finance, I decided to run companies rather than finance them. The first, programming tools vendor, Metrowerks CodeWarrior, built most of the software used on the Mac in the 1990s. When Metrowerks was acquired by Motorola, I was named VP Biz Dev for their semiconductor business, where I invested over $450M in M&A in 14 months. After Motorola, I started data science supply chain software and IOT pioneer, Reddwerks.


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