Goodbye creative destruction, hello robust co-existence: The impact of Google’s cookie delay

InMobi AUNZ VP & GM Richard O’Sullivan
By InMobi AUNZ VP & GM Richard O’Sullivan | 5 July 2021
Richard O’Sullivan

The last few days have seen a raft of headlines around Google’s decision to push out pulling the pin on cookies for another two years. Warnings of ‘Cookie Bombings’ have replaced previous headlines about the approaching ‘Cookie Apocalypse’ however the volume of column inches on both angles should illustrate to all marketers that they have an over reliance on something not within their control.

However, as there currently isn’t an adequate like-for-like substitute for cookies, the two-year deferral means it’s likely they will continue to be used to fill the technology gap in the near term. It seems that the scheduled demise of the cookie didn’t create a winner-takes-all substitute (as yet). Indeed, a possible reason for Google’s delay aside from regulation concerns in Europe, is that an ‘identity winner’ was unclear.

This means that instead of the ‘creative destruction’ that we were looking at occurring within the digital marketing industry, we’re now looking at a period of ‘robust coexistence’ of competing technologies.

And this is why. 

Creative destruction vs. robust coexistence

The term ‘creative destruction’ was first introduced in 1942 by the Austrian economist Joseph Schumpeter. It’s broadly regarded as the dismantling of long-standing practices in order to make way for innovation and in its original use was referred to as the "process of industrial mutation that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one." 

What we thought we were seeing in the digital marketing industry (until Google’s announcement) was the ‘creative destruction’ of ‘identity’ in terms of targeting and attribution driven by privacy regulations from GDPR and CCPA, which were then accelerated by Apple’s IDFA changes to iOS14 and Google’s (then) decision to phase out Cookies next year.

It’s impossible to have said what would have happened if they’d reached that deadline as today there are currently no substitutes at scale; perhaps one would have rapidly risen to the top. But now, with no dominant identity solution emerging and the deferral of Google Chrome’s cookie deprecation instead of anticipating creative destruction we should expect to enter a period of robust coexistence.

You can read a lot more about the concept of robust coexistence in this great HBR article that looks at the theory of how dominant technologies emerge, but it’s my perspective that we’re about to enter a period of ‘robust coexistence’. This is where gradual substitution will start to take place until there’s a defining solution(s) for the industry to accelerate towards for both targeting and attribution. 

What will decide the defining technology

The identity solution industry has grown to 80+ players over the last few years (well technically Adexchanger’s count) primed for the hotly anticipated cookie apocalypse where the incumbent technology will cease to exist. Now this greenfield opportunity has been pushed back, it may now force mergers and acquisitions. Firstly, because if marketers have more time to make a decision it could result in the short-term reduction in demand for identity solutions from the market (meaning some early players may run out of cash) – also driving consolidation down the track.

It’s also worth noting that regardless of how many identity solutions emerge on the demand side, you can’t overlook how publishers will be able to manage and accommodate for so many different systems. My own company, InMobi, is working on an aggregate identity management solution, InMobi UnifiID, that solves for the supply-side and which will enable interoperability at scale – but either way publishers will have to embrace the new digital marketing world order.

One thing that is certain is that privacy has become a key tenet for marketers in harnessing competitive advantage. With 58% of Australian’s having a positive sentiment to privacy laws, trust and consent could well be the ‘new oil’ that displaces data in the sought-after minds of marketers. Whichever identity solution rises to the top after the next two years of robust coexistence with the cookie is most certainly going to have to keep this front of mind.

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