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.