Perspective - The year of the deprecation of the third-party cookie

By Richard Knott | 28 November 2023
Richard Knott.

The AdNews end of year Perspectives, looking back at 2023 and forward to next year.

Looking back on 2023, it has been a wild ride for all those who work with consumer data.

Early in the year, the Privacy Act recommendations caused ripples of excitement, consternation or schadenfreude, depending upon which direction you looked. In the middle of the year, it was announced the ACCC would investigate ‘data brokers’, to better understand their practices. Data brokers are companies that collate data from various sources and build profiles on Australians, for a commercial benefit.

Finally, towards the end of the year, the Australian Government published its response to the Privacy Act recommendations, accepting 38 of the 116 recommendations and accepting “in-principle” (meaning more discussion needed) a further 68, and “noting” (that is, rejecting) 10. 

For me, one of the most interesting and common-sense recommendations that was ‘accepted-in-principle’ is the proposed idea of the “fair and reasonable” test. We’re all familiar with consent fatigue as we immediately “agree” to pop-up consent banners before reading the terms and conditions - purely because they interrupt our digital journey and we want to get past them as quickly as possible. Yet, if we click ‘consent’ or ‘agree’,we’re all in for whatever the terms say. This puts a heavy onus and allofthe accountability on the consumer.  

Instead, a ‘fair and reasonable’ test would require a business that uses a consumer’s data, to operate within the bounds that the data is used appropriately, relative to such things as the type of data, the method of gathering and any fair consumer assumptions of the data’s use. Of course, the devil will be in the detail of what is fair and reasonable.

For example, a bank that uses a customer’s data to avoid targeting them with promotions for loan products they couldn’tsuccessfully apply for, would surely be very fair and reasonable. Whereas, if someone believes they are agreeing to provide their identity with a single company for a specific purpose, but find it is shared considerably more broadly, that may not befair and reasonable.

Ultimately, the responsibility for appropriate data governance is more evenly shared between the consumer and the business.  

2024 will reveal the details of how these Privacy Act amendments will play out. It should also be the year that we will finally see the deprecation of the third-party cookie. It’s long been on the radar and long postponed and in that time we have seen the growth of IDs like UID 2.0, the launch of tools like Google PAIR and the explosive growth of data clean rooms, however further delays are always possible!

The true value of first-party data will be fully realised in 2024, across insights, planning, segmentation, activation, and measurement. Then, those hungry for more insights and opportunities will use data clean rooms like InfoSum to build out their own second- and third-party multi-party private networks, to increase not only greater depth of understanding of current customers, but unlock scale through affinity and propensity modelling.

One of the growth areas set to benefit the most from these three developments (the combination of private multi-party data networks, fair and reasonable data usage requirement, and the need for measurement without cookies), will be Retail Media. Retail Media is positioned like a chess grandmaster, ready to combine endemic and non-endemic multi-party data solutions, with exceptional on-network (owned) and off-network media buying opportunities.

All measured with their own Point-of-Sale transactional data to “close the loop”. This can deliver benefits to everyone in the exchange - the consumer receives discounts and rewards for their data, the media owner’s within the Retail Media Network’s will receive higher CPMs for their inventory as it will be supercharged by first-party data, and advertisers will see greater sales all measured by the strongest form of attribution, Point-of-Sale data. 

Therefore, the overarching prediction for 2024 is that it will be the year we finally see Retail Media fulfil its promise and these Retail Media Networks build out unique and innovative solutions powered by bespoke media management tools, rewards programmes and data collaboration platforms (aka data clean rooms) like InfoSum. 

Richard Knott is GM, ANZ at InfoSum 

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