2022 will usher in the demise of third-party cookies—that means pharma brands must change their approach to targeting and measurement.
For decades, the third-party cookie has been a core component of any digital marketing strategy, allowing advertisers to deliver targeted ads and measure their effectiveness. However, with increased consumer privacy concerns and regulations, third-party cookies are set to expire by 2022.
Pharmaceutical marketing teams can’t lose sight of this looming deadline, even amidst COVID-19 or seemingly more immediate challenges. Without third-party cookies (or a viable solution to replace them), many brands will need to rethink their approach to media targeting and measurement.
Pharma has long invested in strategies that don’t rely on cookies, such as contextual placements and sponsorships on endemic sites. The addition of cookie-enabled media and measurement allowed brands to expand reach and optimize more precisely. Third-party cookies became the backbone of programmatic targeting and retargeting strategies. And advanced measurement approaches effectively connected third-party cookies to claims data to measure the impact of advertising on prescriptions.
Why are third-party cookies disappearing?
Access to third-party cookie data for media and measurement is slowly declining. In response to new regulations (mainly the European Union’s GDPR and California’s CCPA), many sites actively now prompt consumers to disable cookies. Apple (Safari) and Mozilla (Firefox) are also blocking third-party cookies. But, it’s the recent Google announcement to phase out third-party cookies on Chrome that has many marketers concerned. Chrome dominates the web browsing market, so, to quote Google, the change will “render third-party cookies obsolete.”
Google’s announcement outlines a two-year window for eliminating third-party cookies on Chrome. The tech giant will work with industry to find solutions to replace them and “sustain a healthy, ad-supported web.” Technology, media, and measurement partners are now tasked with finding new, innovative approaches to targeting and measurement that address privacy concerns. While major changes are still two years away, brands need to be aware of these changes. And they need to take steps to prepare.
So what is a cookie and how do advertisers use them?
A cookie is a small text file saved by your web browser when you visit a website. Two types include:
- First-party cookies are placed by sites you visit to remember things like your preferences, log-in information, or what’s in your shopping cart. They are generally seen as “good,” allow for customization, and enhance the user experience.
- Third-party cookies don’t originate from the site you’re visiting, but from a third-party, like an advertiser. Third-party cookies collect information about your web browsing to later target you with ads across the web. While using third-party cookies can make a consumer’s web experience feel more personalized, this type of data collection and use for an advertiser’s gain raises privacy concerns. That concern led to recent action to phase out third-party cookies.
Advertising effectiveness in a cookie-less web will require fundamental changes across the advertising and technology industries—not simple tactical shifts. The demise of third-party cookies will change the way pharmaceutical brands approach targeted media and measurement. Luckily, the major media and measurement players are highly motivated to figure out what comes next—their business model depends on the data and insights garnered from third-party cookies today.
Exploring new solutions and a golden opportunity
For example, MediaMath, a leading programmatic partner, offered a few ideas in a recent blog post: “We’ve been working on technology solutions with our partners that leverage authenticated user signals, first-party identity solutions, bidirectional data transfer, greater use of contextual parameters, and more to either replace the hole created or reduce the burden on advertisers left by the eventual absence of third-party cookies.”
Crossix, a measurement partner that largely relies on connecting third-party cookies to prescription claims data through its DIFA platform, recently announced the “DIFA Partner Program” to address the issue. The program will allow Crossix to receive media exposure data directly from publisher and media platforms instead of relying on third-party cookies. However, it’s unclear if this approach will provide truly unique reach or account for duplication as consumers are exposed across partners and platforms.
Additionally, the Interactive Advertising Bureau (IAB), announced “Project Rearc”, a community effort to explore third-party cookie alternatives.
While the looming death of the third-party cookie brings uncertainty for advertisers, tech-giants like Facebook and Google aren’t as worried. With massive amounts of first-party data, they don’t rely on third-party cookies to fuel their ad business.
A recent Vox article put it perfectly: “While limiting such access to your data seems like a good thing for privacy, it also gives first-party data vacuums like Google and Facebook that much more power in the ad market and even more control over your data. Eliminating third-party trackers simply maintains Facebook’s and Google’s ability to track consumers and gather enormous amounts of data about us while also preventing many of their advertiser competitors from doing the same.”
Still, most agree that change is needed. “The cookie’s death can lead to a better future for digital media globally, ” says Dennis Buchheim, EVP and General Manager, IAB Tech Lab. “It’s an opportunity to change the practices, controls, and value surrounding personal data to favor consumers.”
How can pharmaceutical marketing teams prepare now?
- Don’t panic! Massive changes are still a few years away. Many of the key players are optimistic that alternative solutions can offer the same targeted reach and measurement opportunities as third-party cookies. Don’t rush to make big strategic or tactical shifts. Instead, now is the time to evaluate your current plans and explore new targeting and measurement approaches.
- Understand current cookie-based tactics. Third-party cookies allow brands to drive increased reach through programmatic targeting. Without third-party cookies (or a solution to replace them), brands may struggle to drive scale. Take an inventory of all current cookie-based tactics, such as programmatic and retargeting. This will help you understand more specifically how pending changes will impact your overall digital plan. Brands that generate the majority of their digital impact from programmatic placements obviously have more at stake. For other brands, non-cookie tactics could help fill the gap in the short-term.
- Re-think current “non-cookie” tactics. Strategies like contextual targeting and content sponsorships are likely already included in your media plan. While it’s unlikely they can replace the reach of cookie-based approaches, they usually are highly targeted. Conversely, large media partners like Google and Facebook historically don’t offer the targeting precision of endemic or programmatic. They can, however, can help brands increase reach.
Overall, these types of placements may need to play a bigger role in a cookie-less web. Brands should evaluate opportunities to scale or test new targeting. Importantly, brands must ensure specific test plans are outlined to gather insights that inform future planning.
Carefully evaluate first-party data strategies
As third-party cookies make their exit, many marketers have suggested that brands need to rely more on first-party data to reach potential customers. This may work in other industries, like retail, that can offer a clear value exchange with customers to collect their information (like offers, coupons, or premium content and services). However, for pharma brands, CRM programs including email or text have proven value with current patients, particularly around adherence. They are not likely to generate enough scale and impact as prospecting tools, though. Continue to optimize these programs, but don’t expect them to replace third-party data sources.
Join the conversation
Pharmaceutical marketers need to discuss these looming changes with current media and measurement partners. While solutions are still being developed, pharma can join the conversation to ensure the industry’s unique needs and challenges are addressed.