The Monopoly Report: Episode 26 - Will Deprecating Cookies Improve the Quality of the Ads Space?

Release Date: April 23, 2025
Host: Ari Paparo (Alan Chappelle)
Guest: Eris Levin, Media Futurist and Former Google Executive

Introduction

In Episode 26 of The Monopoly Report, host Alan Chappelle engages in a thought-provoking conversation with Eris Levin, a seasoned media futurist with over fifteen years of experience at Google. The discussion centers on the impending deprecation of third-party cookies, the future of addressability in digital advertising, and the broader implications for ad quality and industry metrics.

Understanding the Cookie Conundrum

[01:43] Alan Chappelle sets the stage by outlining the industry's reliance on third-party cookies and unique identifiers (UIDs) for ad monetization. He contrasts this with newer perspectives from measurement experts like Rick Bruner, who question the necessity of UIDs if the primary goal is accurate measurement. This leads into Eris Levin's provocative assertion that removing cookies could enhance ad quality.

Key Points:

• Overreliance on Metrics: Levin draws on George Box's adage, "All models are wrong, some are useful," to critique the industry's dependence on potentially misleading metrics such as clicks and conversions ([02:32]).
• Shift to Probabilistic Modeling: She advocates for a transition towards probabilistic methods and cohort-based analyses, reminiscent of pre-digital marketing strategies, to better assess media effectiveness without over-relying on cookies.

Notable Quote:

“All metrics, not necessarily all, but they can be useful but misleading.” — Eris Levin [02:32]

Cookies vs. Addressability

Alan challenges Levin by comparing the removal of cookies to putting a blindfold on a motorcycle speeding toward a cliff, questioning whether this shift sacrifices precision for quality. Levin counters by emphasizing the need to build parallel systems that focus on probabilistic modeling and cohort analysis, rather than abandoning accurate tracking altogether ([07:19]).

Key Points:

• Addressability Before Cookies: Levin explains that effective marketing existed without deterministic addressability, relying instead on probabilistic models.
• Balancing Privacy and Effectiveness: She highlights the necessity of rebalancing media effectiveness metrics to enhance both privacy and ad quality ([06:01], [06:05]).

Notable Quote:

“Let's assume and know that we can't know deterministically the effectiveness of every single individual ad at an incremental level.” — Eris Levin [07:19]

The Privacy-Transparency Paradox

Challenging Levin on the intersection of privacy-enhancing technologies and transparency, Alan introduces the "privacy transparency paradox." He argues that while these technologies aim to protect privacy, they often compromise transparency, leading to trust issues within the marketplace ([10:59]).

Key Points:

• DoubleBind of Privacy Technologies: Privacy-enhancing tools sometimes obscure data processes, making it difficult to maintain transparency.
• Impact of Walled Gardens: Levin discusses how major platforms with robust data infrastructures (e.g., Google, Meta) maintain competitive advantages, complicating efforts for smaller ad tech players ([16:46]).

Notable Quote:

“We have to learn how to value that media that doesn't have a deterministic identifier.” — Eris Levin [12:00]

Redefining Media Value Through Quadrant Analysis

Levin introduces a four-quadrant model to categorize media based on attention levels and audience data availability, challenging the industry's traditional one-size-fits-all approach ([19:33]).

Key Points:

• Quadrant Breakdown:
  • High Attention & Audience Data: Scarce and highly valuable, often sold through reservations and upfront deals ([20:07], [23:06]).
  • High Attention without Audience Data: Valuable placements like major billboards or Super Bowl ads.
  • Low Attention with Audience Data: Useful for reaching specific segments without high engagement.
  • Low Attention & No Audience Data (Long Tail): High supply but low demand, typically programmatic with low CPMs ([19:33], [23:23]).
• Impact on CPMs and Market Dynamics: As high-value quadrants occupy a small supply but a large portion of ad spend, prices rise, creating a seller's market ([23:06], [23:23]).

Notable Quote:

“It's going to be the most scarce and the most valuable meaning with the highest demand.” — Eris Levin [20:07]

Incentives and Changing Market Behaviors

Levin discusses the difficulty in aligning individual incentives with corporate goals to prioritize quality over quantity in media buying ([25:41]). She suggests that market shifts, driven by improved metrics and smarter buying strategies, will gradually compel advertisers to adopt more effective practices.

Key Points:

• Individual vs. Corporate Incentives: While companies may benefit from smarter ad spending, individual practitioners often face resistance due to entrenched habits and fear of deviating from traditional metrics.
• Market Evolution: As some advertisers successfully implement quality-focused strategies, others will follow to remain competitive, leading to a gradual industry-wide improvement in ad quality ([25:41], [28:03]).

Notable Quote:

“If everyone is buying kind of unintelligently, there's almost like a standstill of sorts. But as soon as somebody in a category starts to buy smarter, they're going to start to steal market share.” — Eris Levin [25:41]

Regulatory Impacts and Future Opportunities

Alan highlights recent antitrust actions against major tech players like DoubleClick and Meta, pondering how these regulatory changes might serve as a catalyst for Levin’s vision of a revamped advertising landscape ([28:03]).

Key Points:

• Forcing Function of Regulation: Levin sees regulatory interventions as necessary push factors that compel the industry to move away from outdated metrics and towards more meaningful measures of ad effectiveness ([30:33]).
• Adapting to Change: She emphasizes the importance of readiness and adaptability among marketers to leverage new opportunities arising from the industry's transformation ([30:33]).

Notable Quote:

“Once you calculate a quality adjusted reach, you'll actually see this ESOV become true again.” — Eris Levin [28:33]

Concluding Thoughts and Future Directions

As the conversation wraps up, Levin shares her passion for driving positive social change, particularly advocating for men's involvement in paternity leave and promoting play-based childhoods over smartphone-centric ones ([32:29]).

Key Points:

• Social Advocacy: Beyond her professional endeavors, Levin is committed to societal improvements, using her platform to influence community norms and behaviors.
• Industry Outlook: Levin remains optimistic about the potential for the advertising industry to evolve towards greater quality and efficacy, provided stakeholders embrace the necessary changes ([30:33], [32:29]).

Notable Quote:

“We are definitely not, I know this for, for a fact, really, we're not doing our best in terms of maximizing the effectiveness of the media and marketing investments.” — Eris Levin [10:59]

Conclusion

Episode 26 of The Monopoly Report offers a deep dive into the complex interplay between technology, privacy, and advertising efficacy. Eris Levin's insights challenge industry norms, advocating for a shift away from overreliance on third-party cookies and traditional metrics towards a more nuanced, quality-focused approach. As regulatory pressures mount and the digital landscape continues to evolve, Levin's vision presents both a challenge and an opportunity for advertisers to redefine success in the ad space.

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