Advertisers Still Too Reliant On Third-Party Cookies For Programmatic, Study Finds (mediapost.com)

When WPP's GroupM unveiled a new data ethics tool earlier this year, it raised questions about what others were doing to create tools, guidelines and policies governing the ethical use of consumer data. To find out, MediaPost teamed with Advertiser Perceptions to field a survey of advertisers and ad agency executives. The study, conducted in early September, found that less than half currently have or are planning to develop such policies -- even though the potential for liabilities continues to grow. More than half said they have no plans (23%) or are not sure if they will (32%).

Direct mail and digital ads are the ultimate power team. While compelling on their own, together they make a larger impact on the consumer, but this is increasingly difficult to achieve in the wake of the phasing out of third-party cookies. For years, direct marketers have run cross-channel marketing programs that use third-party cookies to track user behavior across websites – we all see those ads that seem to follow us around online. In response to European and CA privacy regulations, third-party cookies have largely already been phased out by most browsers (now only relevant 40% of the time), such as Apple’s Safari and Google’s Chrome, which will fully phase out cookies in 2023. So, if cookies are going away and direct marketers want to reach consumers at the same time across channels to lift and improve response, what do they do?

More often than not, we engage with seasoned ecommerce professionals tasked with running print programs while simultaneously holding some measure of responsibility for Profit & Loss statements. And as such, they tend to look at performance metrics with a ROAS (Return on Ad Spend) lens instead of a more critical metric – Contribution Per Order (CPO). Why is that important, and why does ROAS lack adequate insight as a key metric? Let me explain. While ROAS is an efficient measuring metric, it cannot assign health to a channel, making it a relatively useless tool. The reality is it could be hurting your business as a primary form of indicator. ROAS can't tell you how much money you are making for every order received. As an example, a ROAS of 6x is more efficient than a ROAS of 5x, but that doesn't mean you made more money (or any money). A ROAS of 6x on $10 did not make you more money than a ROAS of 5x on $10,000,000. The volume grew top-line demand, but it did not increase profits. In contrast to ROAS, Contribution Per Order (CPO) brings in the magnitude of the campaign segment targeted (marketing cost and cost of goods). This metric will help with your payroll and to keep the lights on – in other words -- adding top-line demand and bottom-line profits.