Navigating the Third-Party Cookie Crisis: Embracing Accuracy in Measurement

Cookie apocalypse

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At the dawn of the apocalypse, a great earthquake shook the earth. The sun turned black like sackcloth, the moon appeared like blood, and the stars fell from the sky to the ground. The heavens vanished like a scroll being rolled up, and every mountain and island shifted from their original positions. This dramatic scene is described in the book of Revelations.

What could cause such chaos and fear to be featured on Our Website? It's the end of third-party cookies, a significant event in the digital world.

The sky won't collapse and the sun won't disappear, but the disappearance of cookies is indeed a negative development, especially at this moment.

Measurement was already a mess

Marketing departments are currently relying on last click attribution, even though it is known to be unreliable. With the loss of cookies, a key method for improving accuracy is gone. This situation is putting pressure on marketers to adapt, innovate, and implement new strategies.

Recent research on measurement reveals that 65% of advertisers are currently using last click attribution to improve their campaigns. This choice comes with a cost, as shown in the chart below.

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Rewritten:

By relying solely on last click attribution and not strategically selecting the right media channels to invest in, you could potentially miss out on capturing 35% of attainable sales within your budget.

It makes sense. When you get used to using the last click, it becomes a habit. You might have already based decisions on it before, so switching now might feel like a step back.

You might also be seeing positive results with the current setup. Or maybe you just find comfort in having those familiar numbers readily available, and switching to something new could mean less or delayed access to information.

There's a problem though. The last click is just a small piece of the whole purchase journey, which means that by relying solely on this method, you may be limiting your options.

Before making a purchase, people typically do a lot of research and come across various marketing efforts. However, last click attribution only focuses on the final step, overlooking any previous interactions that may have played a significant role in the decision-making process.

It's a huge loss for advertisers in the UK and US. A whopping £74 billion worth of potential sales is completely wasted. To put it into perspective, that's more than the GDP of Slovenia and significantly more than the entire UK defence budget. In fact, it's 70 times the amount Todd Boehly has invested in new players at Chelsea since taking over in 2022.

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Source: Magic Numbers

Infrastructure unplugged

This year, the issue of poor measurement leading to a lot of waste has become even more concerning.

In response to Apple's move to block third-party cookies in Safari, Google has also started implementing the same change in Chrome. Currently, only 1% of Chrome users are affected, but this update is expected to reach all users by the third and fourth quarters of this year.

This is important because it makes a previously reliable option for marketers to enhance last click attribution less dependable.

Without cookies, multi-touch attribution (MTA) – also known as data-driven attribution (DDA) – will only show the last click. Before, it could acknowledge online touchpoints that contributed to a sale earlier in the journey, but now that earlier journey data will be missing.

All multi-touch and data driven attribution will now focus solely on the last click, leading to poor advice and wasted efforts. The apocalypse may be upon us, but like the end of the book of Revelations, a new beginning is on the horizon.

Marketers who want to steer clear of confusing measurement practices may notice a gap in their strategies when it comes to attribution.

However, it's important to remember that simply replacing attribution with a similar method may not be the best solution.

Many businesses turn to econometrics/MMM for evaluating marketing efforts throughout the purchase journey without relying on cookies. The demand for econometrics/MMM has significantly increased, with searches for it in 2024 being 30 times higher than they were a decade ago, according to Google Trends data.

However, it's important to note that econometrics/MMM is distinct from MTA or last-click attribution models. As a result, marketers will need to acquire new skills and adapt their strategies to effectively utilize econometrics/MMM.

In a time when data was limited, this task required intelligent individuals who understood the world and were able to fill in the gaps in information. Instead of providing exact numbers, the results are more like educated guesses on how things operate.

This also means that simply purchasing the data once and letting it run on its own won't cut it. To truly benefit from it, you must work closely with a knowledgeable analyst to uncover its full potential.

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Econometrics/MMM has evolved significantly. Independent providers are now leading the way as ad and media agencies have taken a back seat. This shift has reduced the practice of "marking one's own homework." Furthermore, thanks to advancements in data and technology, top providers are now able to deliver quicker results and more user-friendly interfaces than ever before.

Stand upright and move forward

Despite all the advancements, there is still a demand for critical thinking and intelligent statisticians. Automated solutions that do not consider qualitative understanding of the world can sometimes generate outcomes that the CFO may question. Even if media owners share their code openly, it may still reflect a bias towards favoring their own interests.

Don't let a good crisis go to waste. Change can spark innovation if we are open to seeing it as a chance for growth.

The cookie apocalypse is a perfect example. It gives us the opportunity to replace outdated measurement methods with more precise ones.

It provides the chance to incorporate various forms of media into your measurement system, even those that were previously untraceable. This allows for the opportunity to explore new and improved strategies, ranging from working with influencers to utilizing traditional television advertisements.

The apocalypse may seem imminent, but just like the end of the book of Revelations, a new and promising future is within reach.

Grace Kite is the founder of Magic Numbers, which provides people-friendly analytics and practical training for marketers.

Editor's P/S:

The end of third-party cookies is a significant event in the digital world, and it has sent shockwaves through the marketing industry. Marketers are now scrambling to find new ways to measure the effectiveness of their campaigns, and many are turning to econometrics/MMM.

Econometrics/MMM is a more sophisticated approach to marketing measurement than last-click attribution, and it can provide marketers with a more accurate picture of how their campaigns are performing. However, it is also more complex and requires more expertise to use effectively.

The cookie apocalypse is a challenge, but it is also an opportunity for marketers to improve their measurement practices. By adopting more sophisticated methods, marketers can gain a better understanding of how their campaigns are performing and make better decisions about where to allocate their budgets.