Publishing, media, technology and retail companies are facing an existential threat to their existing business models. Google’s announcement that they are no longer supporting third-party cookies in Chrome by 2022 has left marketing and advertising executives scrambling to understand:
- The potential impact to their retail/subscription and advertising businesses; and
- The best way of adapting to these changes
For many companies this is an overwhelming task given the complexity of online tracking, privacy regulations and emerging technology (such as the technical proposals detailed in Google’s Privacy Sandbox). While the FT is still on this journey, our experience and early successes (growing digital subscription revenues by 30% in 2020) can help us to guide others towards a sustainable future without third-party cookies.
Five steps companies can take now
The FT has taken a number of key steps to transition away from third-party cookies and strengthen its market position. This approach, albeit not straightforward, we are confident could be replicated by other businesses and publishers:
- Establish a cross-departmental team with a clear objective – incorporating employees from Marketing, Advertising, Data Strategy & Governance, Product & Technology, the FT created the “Future of Marketing & Advertising Group”. This group had a clearly defined objective:
Adapting to browser changes, privacy regulation and changing consumer behaviour in a way that mitigates risk and drives sustainable growth in our Subscription and Advertising businesses.
- Agree on the strategic direction – the FT took the decision to prioritise sustainable revenue within its subscription and advertising business. This foundation helped the FT analyse potential solutions and avoid “quick fixes” – such as ID solutions. The FT’s ad business is already seeing benefits from being privacy-centric and emphasising the importance of first party data. Digital ad revenues have seen 30% growth in 2020 with continued strong performance this year.
- Diagnose the impact – the end of third party cookies has varying levels of significance – depending on the organisation and department within the organisation. It is vital to fully understand and quantify the entire organisational impact and the department by department impact. This is important because it enables you to:
a) Create a sense of urgency among senior stakeholders – helping to drive meaningful commercial change; and
b) Understand which areas are most at risk and require the greatest focus.
Carrying out this exercise helped the FT realise that the advertising business was resilient to these changes when compared to the subscription business. This has allowed the FT to set organisation-wide objectives and key results to not only mitigate the impact to subscriptions, but to actually strengthen its competitive positioning as a result of it. The FT has already offset millions of pounds in Customer Lifetime Value as a result of this approach.
- Set your objectives and prioritise – it is vital for companies to cut through the “noise” and prioritise the objectives that will have the most meaningful impact. At the FT, the greatest challenge is the loss of cookie-based retargeting. We know that this is a valuable mechanism (for the FT and many others) for building engagement amongst anonymous audiences that have already visited its sites. Therefore, the FT set the objective of de-anonymising a greater proportion of its audience – allowing the FT to reach them offsite (for example through a newsletter or paid media) without relying on third-party cookies.
- Test and learn – unfortunately, there is no silver bullet. It is important for companies to experiment with tactics that can contribute towards objectives. For example, the FT ran tests to learn the viability of “audience matching” solutions and contextual advertising as alternatives to subscription retargeting. This approach has put it in a position where it’s confident it can grow both subscription and advertising revenue as a consequence of the deprecation of third party cookies.
It is also vitally important to understand the actual changes that are going to be made by browsers and the Privacy Sandbox. Deciphering this information (given its technical nature and format) is not easy. The FT has taken the time to understand the technical implications of the key proposals – first party sets, attribution models, FLEDGE, FLoC – and has built knowledge of how this will impact publishers.
George Montagu is a Senior Consultant who has spent the last four years guiding the FT’s data strategy as it balances revenue and risk. Most recently, he founded and continues to lead a cross-departmental FT team focused on the future of marketing & advertising in the context of restrictions on online tracking.
The end to third-party cookies represents a fundamental change to retail, subscription and advertising business models. Given the complexity of the changes and the looming 2022 deadline, we know that companies and publishers need support to tackle these challenges. FT Strategies leverages the experience and expertise of the FT’s “Future of Marketing & Advertising Group” and is able to help. We have worked with a variety of sectors (including news, media, technology and automotive companies) that are all grappling with the same challenges. And we are always happy to have a first discussion over a (virtual) coffee!
Original content re-published with kind permission of FT Strategies, the digital growth consultancy from the Financial Times.