The rise of responsible retail media in a cookieless world
As Google commences the long-awaited purge of the third-party cookie, a new world of opportunity has opened up for retail media. But with opportunity comes responsibility, writes Zitcha's chief platform officer, Hugh Cameron.
For retail media, the beginning of the end for cookies represents a boom for retailers and brands, as marketers turn to other trusted first-party data sources to connect with consumers.
However, retailers must seize this opportunity to redefine their strategies, align with evolving consumer expectations, and embrace transparency as the cornerstone of responsible data usage if they are to fully capitalise on the immense potential retail media offers.
The much anticipated and long-hyped purge of Google’s third-party cookies has started. To date, cookies have been turned off for just one percent of Chrome users amounting to around 30 million users, with the stated aim of phasing out all cookies for 100 percent of users by the third quarter of this year. Time is ticking and for retailers and brands to get moving.
At first, media products came from publishers, then they came from the ad tech players. Consumers trust retailers, their relationships span lifetimes and have a big presence the family home. No wonder the retail sector has the highest brand value as measured by Brand Finance. The retail setting is the inevitable and trusted home for brand advertisers. Now, retailers have become a destination for consumers, a place they trust and coalesce around, and one which represents a significant value driver for retailers and brands.
For endemic brands – those that sell their products or services with retailers, and non-endemic brands – those that don’t, retail media networks represent an obvious marketing alternative as time is called on cookies. Retailers can leverage their vaults of first-party data to help brands efficiently plan campaigns, but crucially, closed-loop reporting means campaign activity can effectively be measured. It’s an ecosystem where the signal and the sale occur in the same closed system, a perfect environment for advertisers to operate in, and one which is likely to mark the beginning of the end for multi-touch attribution.
This is significant because multi-touch attribution (MTA) assigns credit to multiple digital touchpoints along a consumer’s journey that lead to a conversion, providing a “digital line of sight” into the effectiveness of various marketing channels. However, with Google’s deprecation of third-party cookies, MTA is increasingly being considered a ‘legacy’ approach. This shift challenges its ability to accurately track user interactions across different sites and platforms. As privacy regulations evolve and the digital landscape changes, marketers are exploring new strategies that adapt to these limitations while offering insightful consumer behaviour data, which is where retail media networks come into play.
Phasing out of MTA presents a significant challenge, particularly in maintaining or improving Return on Ad Spend (ROAS). The diminished tracking capabilities hinder accurate user behaviour analysis across multiple sites, directly impacting ad targeting and attribution, which are vital for calculating ROAS. As legacy measurement models become less effective, advertisers are compelled to pivot towards first-party data and contextual targeting, navigating the complexities of collecting and utilising this data while adhering to heightened privacy standards. Retail media networks will certainly compete on ROAS; closed-loop attribution is central to the value proposition. The transition involves balancing effective advertising and respecting consumer privacy, a factor increasingly crucial for differentiating media products.
Cookie deprecation is both an opportunity and a wake-up call for responsible data usage. RMNs, for all their potential, can quickly become a privacy minefield if built on shaky foundations. Chris Brinkworth, managing partner at Civic Data, which works with advertisers, agencies and publishers to navigate Australian customer data when it comes to digital targeting and measurement, puts it this way: “A verifiable chain of consent, from acquisition to utilisation, must be the cornerstone of every RMN strategy. Without it, we’re building castles on sand, vulnerable to the tides of legal challenges and erosion of consumer trust.”
The allure of AI and data clean rooms – secure environments used to handle and analyse sensitive data while maintaining privacy and data compliance regulations – as part of an RMN strategy shouldn’t distract us from the fundamental need for transparency. Fancy technology can mask a broken chain of consent. True innovation in the cookie-less era lies in building trust, one transparent interaction at a time. Brands and retailers must truly understand how emerging technologies interact with and govern hard-earned consumer trust. They must prioritise ethical data practices over technological wizardry, remembering that privacy is not a feature to be bolted on, but the foundation upon which a sustainable RMN ecosystem can be built.
As cookies face depreciation, RMNs emerge as a compelling lifeboat for advertisers. However, Civic Data’s advice is to approach them like ‘the Ark’ capable of revitalising and sustaining an industry. As Chris Brinkworth says: “Retailers leveraging murky first-party data and AI-powered targeting will seem like they can offer brands that safe harbor/lifeboat at first – but consistent focus on transparency, consumer trust and governance are the anchors that will keep a true RMN steady in the turbulent waters churned by regulatory changes and cookie deprecation over the coming 24 months.”
The impending demise of third-party cookies signals both opportunity and responsibility in retail media. The shift away from cookies is undeniably advantageous for retailers and brands, prompting a move towards trusted first-party data sources. Yet, this transformation demands retailers to redefine strategies, align with evolving consumer expectations, and place transparency at the forefront of responsible data usage.
What is now very clear, if it wasn’t already, is that retail media’s winners and losers will become evident within just years. Retail media stands as a natural and trusted haven for brand advertisers, and those retailers that are already getting their houses in order are the ones that will reap the vast rewards.
Hugh Cameron is chief platform officer for Zitcha
