How CDPs do (and don’t) factor into a cookie-less world

Third-party cookies have faced deprecation from all the major browsers, with Chrome being the most recent and notable shift. In January 2020, Google announced that it is phasing out third-party cookies in Chrome, which has roughly 63% of the U.S. market- share on desktop browsers, by 2022.

A cookie-less world forces a fundamental change in the online advertising industry as third-party cookies underlie many brands’ and adtech providers’ ability to track user behavior online, personalize digital ads and measure the impact of marketing campaigns.

Thinking of a future without third-party cookies at all, many marketers must question how they currently assess customer identity in an online environment and how cookie removal will impact user identification.

Some have posited that customer data platforms (CDPs) are the answer to a cookie-less world because they can aggregate, organize and align customer data, to then be used for marketing activation. But—as you dig into it—that answer isn’t so straightforward. We asked two industry experts what they predict and what they recommend for the new frontier.

Liane Nadeau

Senior vice president and head of precision media and investments, Digitas North America

"The industry is seeing the deprecation of third-party cookies as an opportunity for a new technology to emerge, and a lot of data management platforms (DMPs) are attempting to move into that space. Fundamentally, I think CDPs, as opposed to DMPs, are better positioned to solve for addressability in a cookie-less world, as they are rooted in people, not cookies or device IDs. And now that cookies are a disappearing phenomenon, we do need something that has a foundation of people.

Customer data platforms: Software that culls data from various sources and creates a persistent, unified database of customer profiles accessible to other systems.

If you think about CDP as broadly referring to a people-first technology platform, then absolutely that’s the only way forward. But I’d argue that CDPs are kind of a blank canvas. Without the right people who have the expertise to translate it into media and marketing strategies, it’s really just an empty shell.

There’s a reason walled gardens are winning in this world, and it’s because they can keep everything end-to-end within the same platform and on the same ID. That’s really the only way to do identity in its most perfect form. At the same time, what you don’t want is to have put your data and all of your protected assets behind someone else’s lock and key, like with Google, and not be able to use them in the open ecosystem.

CDPs are incredible for things like email, because you know exactly how to reach each person based on that email address. But right now, the world of adtech and ad buying is still largely based on cookies. So, until that changes, CDPs are a little bit unactionable unless you translate them to cookies.

I’d say CDPs are only one piece of the answer. If we hang our hats on CDPs alone being the way of the future, we’ll end up in a similar place to where we are now, where systems aren’t talking, and we’re reliant upon those who own the end-to-end stack, like the walled garden.

But if we see CDPs as a kind of base and a technology, not a strategy, then we’ll be able to build something stronger on top of that."

Carl Madaffari

Senior vice president of marketing technology platforms, Epsilon

"With third-party cookies being deprecated by Apple and Google, I can see why the appeal of CDPs is so strong. There are, however, several issues to consider when thinking about CDPs: This is still a nascent concept and 'CDP' means different things to different people; comprehensive and persistent identity is not usually part of a CDP toolset; and tools by themselves will not solve for this challenge.

Between venture capital pursuing the next big thing and everyone from tag-management systems to master data-management platforms rebranding themselves as CDPs, there are now over 100 options in a market that can only bear a handful of survivors, making picking the right one quite risky. The other reality is that most of the ability to centralize, collect, manage and activate customer data can be done with existing marketing technology architecture.

If I were an upstart company with a small team and a single brand to focus on—maybe something regional—I think a CDP might be a good fit. But expanding beyond that, coordinating business rules for record consolidation at an enterprise or global level will cause most solutions to fall apart.

CDPs give marketers hands-on controls to manage business rules, but they don’t provide a comprehensive identity capability, which is the connective tissue in customer-centric marketing. Brands get excited about CDPs and the ability to align data by the individual, but CDPs’ biggest gap is that they—on their own—don’t have the identity layer, and that’s what ties everything together. They struggle to capture, align and activate data at the individual level.

Core Insight: Google’s announcement follows similar restrictions on other browsers, like Firefox and Safari. Still, because Google has roughly 63% of all web traffic on its browser, its shift is a significant change that the larger adtech community will need to reconcile.

At Epsilon, we have several clients who bought a CDP and said, 'Hey, we’re kind of missing that identity layer. Can you help us bring that in?' CDPs are a good goal in theory, but they don’t do everything that a marketer expects them to do.

Expecting a tool alone to solve a problem is like expecting a brush, a palette and a piece of canvas to become a great piece of art on their own. The reality is that it takes specific know-how, the same way an effective CDP strategy takes expertise."

Image credit: INAMEL/Shutterstock