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The Agile Brand with Greg Kihlström®: Expert Mode Marketing Technology, AI, & CX
#582: Cookieless advertising in a first-party data world with Eric Wheeler, 33Across
00:25:10
Today we’re going to talk about cookieless advertising and how advertisers can thrive with a first-party data approach.
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The agile brand.
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Welcome to Season six 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 Kilstrom, advising Fortune 1000 brands on martech, marketing operations and CX best selling Author and speaker. The Agile Brand podcast is brought to you by Tech Systems, 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.
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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 33 Across. Eric, welcome to the show.
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Hi. Thanks Greg. Glad to be here.
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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?
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Sure. I started 33 across 17 years ago, which is amazing.
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Yeah, congrats. Yeah.
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Longest 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 massive, 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 33 across on the agency side. So before being on the publisher technology side, I was 15 years leading teams at agencies like Ogilvy, Cara and even small agencies.
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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 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 certainly you have great experience and background here to be able to talk through this. Could you define for us what Exactly. Do we mean by cookieless advertising and maybe give a little history and context on it?
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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, 10 plus years and look at Programmatic advertising. This has been around for over 10 years. And it's the 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. They, 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 them almost made 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, you know, it's kind of like a Monty Python skit where one arm gets cut off now. So what you're looking at is now it's really only been your. 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 Chrome cookies deprecating, and they are, they're just doing it in a different way, we're going to continue to see that addressability dwindle.
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Yeah, yeah. So what role does a company like 33 Across Play here in this space?
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Yeah, well, so what's wild is today over 50% of publisher inventory today does not have a cookie. Meaning that Programmatic backbone of advertising and monetization doesn't work on over half of the Internet Grand Supply. Right. And the future growth channels like CTV App Digital out of home never had cookies and won't. Right. So brands need a better way to deliver and measure in a cross channel way. So 33 across 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, and we've 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.
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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 cookiepocalypse 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, this cookie less approach still so important to, to advertisers today?
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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 and make the choice. Well, the last time this happened, Apple did this in app with the app 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. Right. 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 doj and making this move to be more user driven I think allows them to get to the same outcome but not being them driving it.
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Yeah, yeah, got it, got it. So like I said at the top of the show, we've certainly been talking about first party data strategy for a while. I've written about it in a few books of Mine as well. So certainly I'm, I've seen 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 how would you describe the importance that brands adopt this first party data strategy component as well as a probabilistic solution and I probably need a definition on that but to their advertising and marketing strategies?
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Sure. I think given how quickly things are evolving and how much cross channel or omnichannel 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 way to measure and to freak. That's called frequency cap, all of that stuff and it becomes, you know, a very big problem. Brands are, you know, should be leaning into their, their and 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, 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 33 across and Lexicon to add reach and scale and do that effectively.
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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?
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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. Nope. 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 in 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 cooking lists in a pretty big way. 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 cookie less 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, you know, your listenership. Yeah, we have Q1 of 2023 retailers had a share of voice in cookieless that was about 7%. Fast forward one one year later Q1 2024 retailers had a share of voice of 30%.
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Wow. Wow.
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Yeah.
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So over four times the increase in the year.
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Yeah, incredible. And, and, and that that's available. You can see that. You know we track all these insights@33across.com insights. We'll, we'll put the links in, 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.
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Yeah.
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Cookies is this red ocean where there's a ton of competition, there's less and less inventory happening. There's more and so to bid and buy becomes more costly. You end up not winning. And then you look at 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 CP out on really quality publishers. So you're really missing out if you're not leaning in cookie cookie list. 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.
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Yeah. And you know, 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 from a consumer privacy standpoint and all that stuff, but to what you're saying, it's actually better for brands, you know, so in other words, there's, there's a lot, there's always resistance to change and everything like that. But you know, from, from everything that I see from what you're saying, I'm sure, you know, I'd love to hear your thoughts on it as well. Like this is actually a positive, like it's a win win, which is rare enough in life, but. Right. Is, is that how you see it?
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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 her 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 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.
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Yeah, yeah. So I want to, I want to talk a little bit more about identity resolution here. And I know you talked about it briefly, but want to, 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?
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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, their state level guidelines on what and 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, 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 with, as part of membership with the iab. But it's, 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, you're going to want authenticated users, maybe you're going to want publisher for only first party publisher, just data there. Maybe you want statistical, maybe you want contextual, maybe you want a mix. That's all fantastic. Everybody just needs to know what's being used and where and that's what this framework does.
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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, they're on that trajectory to, to be obsolete at whatever time frame. 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?
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Cookies are already in the rearview mirror.
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Yeah.
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The majority, over 50% of the open web and every growth media channel, CTV Digital out of home etc doesn't have cookies. Right. So already you've got less than 50% of this of the Open web is cooking and shrinking.
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Right.
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So, and CTV never had or will have cookies. So if you're, if you're a brand that wants to reach and change perceptions or drive 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 33Cross, Lexicon 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 marketer 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 cookieless 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 cookies.
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Yeah, yeah, definitely. 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?
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In the end, ID resolution and cookie list 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, you know, 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 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.
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Yeah. 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?
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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 assure 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 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 to really start to a B 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 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 and with the same standard and regard that you have with your customers.
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Love it. Yeah, great, great advice there. Well, again, I'd like to thank Eric Wheeler, CEO and founder of 33 across, for joining the show. You can learn more about Eric and 33 across and we'll put a link to the research that Eric mentioned as well in the show. Notes
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thanks again for listening to the Agile Brand brought to you by Tech Systems. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find the show more easily. You can access more episodes of the show at www.greggkillstrom.com. that's G-R E G K I H L S t r o m.com While you're there, check out my series of best selling Agile brand guides covering a wide variety of marketing technology topics. Or you can search for Greg Kilstrom on Amazon. The Agile Brand is produced by Missing Link, a Latina owned, strategy driven, creatively fueled products production co op. From ideation to creation, they craft human connections through intelligent, engaging and informative content. Until next time, stay Agile.
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The agile brand.