RTBlog: What is so-called “people-based” marketing? And where’s the cookie going?
Tony Katsur: It’s a move to identify real people. The cookie isn’t dead yet, but it will have less relevance over the next five years. Cookies are low-fidelity tokens. At some point, marketers that rely on them will have trouble identifying consumers.
RTBlog: Why are cookies “low fidelity tokens”?
Katsur: A cookie is lower fidelity because churn against the cookie on a person is between 20% to 40%. You can’t maintain a consistent relationship with them. For example, "is that really Tony Katsur at gmail.com?" A cookie doesn’t suffice for addressability because it has a high churn rate and doesn’t translate to multiple devices.
Consumers are moving across devices, so a cookie can’t truly identify consumers. While cookies aren’t reliable, they won’t entirely disappear.
RTBlog: What is needed in this case?
Katsur: We need more accurate identification in front of a consumer to get more information. First-party publisher cookies have lower churn rates vs. third-party cookies. The challenge is connected devices. Even in the mobile app world, there’s no home for the cookie. You need a new token. A device ID is the next idea—we need that in order to build a more robust ID around consumers and to put the right messages in front of them.
With personally identifiable information (PII) graph data, marketers can leverage their CRM databases to create a highly identifiable consumer from a phone number and email address to match with publishers. An email address is a high-fidelity token because it’s not temporary. To overcome concerns over PII, the token is scrubbed using an algorithm.
RTBlog: What’s your biggest concern on this issue?
Katsur: We have an ongoing fragmentation for consumers consuming content. We’re moving away from a world where a cookie can exist. I think CRM addressblity is needed and a PII token that can be used to understand more about the consumer. That’s not a cookie. We need higher fidelity tokens in this new world of connected devices. Cookies don’t live in an app world.
RTBlog: What needs to happen?
Katsur: More brands need to focus on their data strategies and on building an addressable warehouse of consumers. There will always be a laptop and browser involved -- but cookies, as I’ve said will become much less relevant. Marketers could rely on point-of-sale data, for example.
Since a cookie is ubiquitous, perhaps there will be less ad fraud, as the reliance on cookies decreases. There will be a move toward PII graph data. We’ll move from a media-based buying world to a people-based buying world. I think that means agencies and marketers will pay more for higher value consumers, and you’ll know they’re higher value because you have access to high-fidelity tokens.
This is a challenging shift from media-impressions-based marketing to people-based marketing. A device ID will be helpful to household-level marketing. The industry needs to prepare for where this is going and how it will affect TV. Once brands get a taste of a truly addressable consumer in digital, they’ll look at the GRPs [gross rating points] and will see addressable advertising is a much better way.
Tobi, GRP's are not a targeting device. They are merely a way to quantify the amount of exposure that an advertiser gets---on a gross or duplicated basis---for the money spent. If, and when, true---not phoney ---"addressable TV" ever gets here---where the sellers fully cooperate and the "targeting" is based on who is viewing, not which home used a device to "see" the ad, you will still need GRPs---call them "addressable GRPs" if you wish---- to quantify the number of supposed ad exposures attained with a given ad budget in a simple manner so everyone understands it. It continues to amaze me that people like Katsur haven't yet grasped this simple concept.
Much to Ed's comments, Brands, and Advertisers should be looking at platforms which use consent as an access means acquiring better data points for shared personal information by individuals. Resulting in deep and wider information, delivering the right offer, to the right person at the right time.