Digiday+ Research: Brands make big bet on first-party data as third-party cookie fades away
This research is based on unique data collected from our proprietary audience of publisher, agency, brand and tech insiders. It’s available to Digiday+ members. More from the series →
The life of the third-party cookie is (someday, we think) coming to an end. And despite plenty of warning, it’s still not clear what will replace it. For brands, the majority of whom say they are taking action to prepare for the post-cookie world, the way forward could very well be first-party data.
That’s according to a Digiday+ Research survey of more than 30 brand professionals.
Digiday’s survey found that the vast majority of brands are taking action before the death of the cookie (as they should). Nearly three-quarters of brand pros (72%) said in the second quarter of this year they agree somewhat or strongly that their businesses are actively preparing for the third-party cookie to go away.
That’s a significant jump from 2021, when around half said they were actively preparing (or to be exact, 56% in Q1 2021 and 51% in Q3 2021), and again from Q2 2022, when 61% said they agreed their businesses were actively preparing.
Meanwhile, the percentage of brand pros who said they disagree strongly or somewhat that their businesses are actively preparing for the end of the third-party cookie has fallen over the last two years. Twelve percent of brands said in Q2 2023 they’re not actively preparing for the cookie to go away, down slightly from 16% a year ago and 17% in Q1 2021.
But still, digging into the data a bit deeper, fewer than one-third fall into the “agree strongly” category as of Q2 of this year.
Thirty-one percent of brand pros told Digiday in April they agreed strongly that their businesses were actively preparing for the end of the third-party cookie. That’s significantly higher than the 19% who said they agreed strongly a year ago, but it’s not unreasonable to have expected that more than one-third would strongly agree that they’re actively preparing for the cookie to go away at this point.
So we’ve established that brands are actively preparing for life without cookies. Now the question is what exactly are they doing to prepare?
Digiday’s survey found that brands’ preparations for the end of the third-party cookie largely hinge on first-party data. More than two thirds of brand pros (69%) said in Q2 of this year they’re investing in technology to acquire more first-party data, a slight increase from the still significant 65% who said the same a year ago. This makes first-party data the clear winner among brands when it comes to what exactly will replace the third-party cookie.
Spending more on walled gardens like Google and Facebook and revising measurement and attribution frameworks come next behind investment in first-party data, according to Digiday’s survey — but by a wide margin. Thirty-eight percent of brand pros said they’re spending more on walled gardens and revising measurement and attribution as the end of the third-party cookie nears. Thirty-four percent of brand pros said they’re spending more on contextual targeting.
Interestingly, the percentage of brand pros who said they’re using agency-built cookie alternatives saw a big jump from last year to this year.
In Q2 2022, not one brand pro told Digiday they were planning on turning to agency-built cookie alternatives in preparation for the post-cookie world, but 13% said they’re doing so as of Q2 2023. Meanwhile, the percentage of brand pros who said they’re using ad tech-built cookie alternatives fell from 39% last year to 25% this year.
It is also worth noting that more brand pros told Digiday this year that they’re spending less on digital advertising as the third-party cookie comes to an end. Sixteen percent of brands said they’ve decreased their digital ad spend as of Q2 of this year, up from just 7% last year.
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