CMT Quarterly Deck: The Era of Cookies

June 2021

Agenda

Overview of Cookies The Impact of Changes to Cookies iOS 14.5: Apple’s Privacy Changes

Moving Forward

Overview of Cookies

Background

A cookie assigns a tracking code to a user as they browse the web. Cookies leverage information gathered from your device through that tracking code to display advertising based on topics that interest you. This information is also used to gather performance metrics of an ad and influence which ads are served. When you visit a site, you may receive a cookie from the server for that particular site, but you may also get a tracking cookie from companies other than the specific publishers with the intent to collect and sell the information captured by the cookie, known as a third-party cookie.

Third-party cookies follow you as you navigate from site to site. This tracking is what concerns privacy advocates, leading to regulations and actions taken to remove cookies from platforms. People want assurances that their identity and information are safe as they browse the web. That’s why Google is on the path to eliminate third-party cookies by replacing them with viable, privacy-first alternatives that will help publishers and advertisers succeed while also protecting people’s privacy as they move across the web.

Impact of Changes to Cookies

Impact and Opportunities

Google is phasing out third-party cookies by December of 2022.

● Data is collected from a number of sources including first-party and third-party sources. Third-party data is collected from a variety of and platforms. First-party data is collected directly from your customers based on how they use your products or services.

● The removal of third-party cookies represents a new opportunity for better advertising, better ads, and more privacy and security for consumers.

● accounts for 62% of all users across devices, and by 2022 they are eliminating all third-party cookies.

● CMT has gotten ahead of this by employing contextual targeting-- understanding the audiences our clients are advertising to through our initial research and discovery phase.

Phase Out of Third-Party Cookies

Consumer Consensus

As this timeline progresses and cookies are phased out, consumers will be impacted.

Consumers are concerned about their online privacy being compromised. The phase out of third-party cookies will allow consumers to be more comfortable sharing their information.

Sources: Wunderman Thompson, Dec 2020, Ipsos & WEF, Harris Poll Sept 2019

Google Privacy

Privacy Changes Across the Web

The changes that will be implemented for cookies not only affect consumers, but how we as marketers behave and strategize as well.

● Google is working towards implementing viable privacy-first alternatives that will help advertisers, like CMT, succeed with their clients’ campaigns while protecting the privacy of the consumer.

● This announcement is the latest in the series of moves taken by other platforms. Social media platform Facebook, in addition to internet browsers like Safari, are taking steps to protect user privacy by giving visitors the mandatory option to opt-in or out.

Privacy Sandbox: Targeting Without Taking Personal Data Google's Privacy Sandbox is a group of proposals about how advertising can be rebuilt without third-party cookies.

That's a lot of ground to cover, so the Privacy Sandbox is not just one solution — it's more than two dozen different proposals.

When the Privacy Sandbox technology for interest-based advertising (FLoC) was first proposed last year, it started with the idea that groups of people with common interests could replace individual identifiers. Today, new data being released shows how this innovation can deliver results nearly as effective as cookie-based approaches.

The Privacy Sandbox also includes proposals for how marketers can create and deploy their own audiences, without the use of third-party cookies. One example is when advertisers want to reach prior visitors to their via remarketing. Chrome has published a new proposal called FLEDGE (previously called TURTLEDOVE) that’s designed to store information about a campaign’s bids and budgets.

Chrome intends to make FLEDGE available for testing through origin trials later this year. While proposals such as FLoC and FLEDGE explore privacy-preserving alternatives for reaching relevant audiences, there’s also work being done to help buyers decide how much to bid for ads seen by these audiences.

The New Way to Target Without Cookies: FLoC

Advertisers are able to start testing Google’s alternative to the third-party cookie, named “Federal Learning of Cohorts” or FloC for short. With FLoC, users’ private information (like web history) remains anonymous while Google instead groups people together based on similar interests into respective cohorts. These cohorts will then be available to target. This way, targeting will still be relevant without relying on data provided by third-party cookies.

Google began testing the feature on Chrome with about 0.5% of users before ultimately rolling it out to all users on March 31, 2021. Google says they will make FLoC-built cohorts available for advertisers, specifically , in Q2 2021. As it stands, it appears Google Chrome will be the only browser that accepts them. As of April 2021, Firefox, Microsoft Edge, and Safari have all opted out of the third-party cookie alternative.

These opt outs do not come as too much of a surprise, seeing as all the opted-out browsers have been quick to enforce the removal of third-party cookies. Apple announced Safari’s Intelligent Tracking Prevention that blocks all third-party cookies in March of 2020. Firefox is blocking all third-party cookies by default with its Enhanced Tracking Protection.

The New Way to Target: Grouping

● Advertisers, such as CMT will be able to start testing new alternative options such as FLoC this year.

● FLoC will allow users private information (example: web history) to remain anonymous and begin placing users into cohorts (or groups) with similar interests.

● These cohorts will then be available to target, i.e. Established Families, Women On the Go, etc. This way, targeting will still be relevant without relying on data provided by third-party cookies.

● We will see these cohorts start to be implemented this quarter with Google.

iOS 14.5: Apple’s Privacy

Changes

Apple iOS 14.5 One of Apple’s most considerable privacy changes in years has arrived in a software update, iOS 14.5. The latest update to iOS is a move from Apple to put users in control of how their data is used and sold.

● iOS 14.5 release has put users in more control of their data, allowing them to opt-out of in-app data collection.

● As opt-outs increase on iOS devices, the disruption of ad personalization and performance reporting could become notable.

● Moving forward, iOS 14.5 will require all apps listed on the App Store to show an App Tracking Transparency (ATT) prompt, requesting that users opt-in or out from allowing an app to collect and share their data or track their usage.

● Facebook retargeting will also take a hit when it comes to the new iOS update. Previously, if someone clicked on an ad, the Facebook was able to identify that user as well as the actions they took.

What Does This Mean to Apple Users?

Tracking consent ● Previously: IDFA permissions were set on an opt-out basis ● Future: All apps required to secure consent via an opt-in window before being able to use Apple’s IDFA

Data transparency ● Apple’s app store now includes a profile of data practices for every app, including a separate breakout of the data used for ad tracking ● App publishers must self-declare their data practices

Moving Forward

Your Campaigns: More Efficient, More Effective

While the privacy changes have many in the marketing world concerned about future successes of their digital campaigns; at CMT, we believe that your campaigns will be more efficient and effective in 2022.

3 reasons why these changes are beneficial to marketers for their digital campaigns: ● Better consumer experiences ● Better marketer outcomes ● Better publisher monetization

CMT plans and buys digital advertising for a variety of clients both B2B and B2C. We have over 30 years of experience buying and planning Television, Radio and Print campaigns, and 15 years buying digital. Our buys are developed based on Qualitative and Quantitative research.

CMT can help you develop a custom program that aligns with this new look and adjustment to the advertising targeting world. Right now it is essential to keep your brand/company top of mind. When clients/customers are ready to use your services, they want to know you’re still ready and there.

To learn more about this topic and chat with our team directly, visit cmtconsultingltd.com.