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Independent agencies shift to post-cookie tools: AI, new measurement strategies and retail media

January 30, 2024
in General
Independent agencies shift to post-cookie tools: AI, new measurement strategies and retail media
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With the ongoing cookie deprecation underway, independent agencies are shifting their attention to identifying new audiences, testing artificial intelligence and expanding data tools to prepare for the accompanying measurement changes, which may look different for independents than they do for their holding company counterparts.

Compared to holding companies, independent agencies may use a more “multifaceted approach” to cookie deprecation, said Alexander Potts, senior vp of programmatic and media lead at Tombras.

“[Independents will use what] is customizable to the unique capabilities and needs of their business-focused clients, while showcasing the return to their bottom line,” Potts said.

Building new audiences

Recently, full-service agency MG Empower has been working with its clients on creating “dynamic targeting strategies” to identify areas for audience growth, explained Lucy Walker, head of MG Media at MG Empower. This includes understanding their clients’ core customer segments and developing content strategies to reach those audiences as cookies go away.

“In addition to this, we have been testing the AI features that the media platforms have launched and monitoring the platforms closely to see first of all if they work well, if they’re scalable and if they’re brand safe,” Walker added.

Walker also mentioned using tactical lead generation campaigns to uncover new audiences for brands. By working more closely with clients to review their marketing calendars and coordinate campaigns, the agency can identify the audiences that are looking for sales to make them loyal customers.

“Historically, we tended to use lead gen during low sales seasons or in the lead up to Black Friday, but we’ve been working with the brand to use lead gen more tactically and focused on the times that lead up to key brand moments,” Walker said.

Expanding data capabilities and measurement

For many agencies, a major part of this cookie transition has also been ensuring they have the right data partners and tools in place. As Ray Rosti, chief digital officer at Publicis Health Media, mentioned, the strategy is “looking for a silver buckshot, not a silver bullet, when it comes to solutions.”

Publicis Health Media created a data Request For Information, or RFI, for validation for new partners to test each data set from its partners. This allows the agency to monitor any audience overlap in their activation, Rosti explained. As the deprecation happens, another challenge will be scale and measurement of the data — so there will be a need to reset benchmarks and metrics over time as agencies continue testing.

“There are more third-party cookies than people, so the way in which we look at historical benchmarks for how media scales, average CPMs and frequency will most likely be turned on its ear,” Rosti said.

In terms of measurement, agencies’ data strategies also include expanding on the data providers not relying on third-party cookies — so they can build look-alike models with more partners. It’s something larger agencies are also doing to expand their data partnerships and scale using first-party data, and for independents there are existing partnerships with Experian and TransUnion, explained Lee Beale, managing partner of Crossmedia.

“These guys provide the same capabilities to independent agencies,” Beale told Digiday. “It allows us to build look-alike models to create insights from to scale transparently and deploy in a clockwise fashion from first-party data. As an agency it’s powerful to be able to utilize and work with your clients’ first-party data obviously in a privacy controlled manner.”

It’s called agile impact modeling, or AIM, which is a hybrid approach to marketing mix modeling (MMM) and multi-touch attribution (MTA). Beale said the agency has been using AIM since last year with clients, as it offers the “best of both worlds” using aggregate sales data.

Crossmedia is also reverting to old-school advertising strategies during this time, including investing in business analysts, hiring data and technical people, and rethinking channel-specific strategies, Beale added.

As agencies look to cookie alternatives over the long term, retail media growth has also become one of the ways “to mitigate this upcoming transition,” said April Carlisle, evp of commerce at Spark Foundry.

“[Retail media networks] have become full-funnel media partners [and] also have access to rich first-party data that is verified and addressable with true closed loop reporting,” Carlisle said.

If agencies can leverage these retail media insights, they can provide clients with audience planning and commerce activation that ultimately translate to sales, she explained.

Another consequence of cookie depreciation could also be fixing the targeting flaws agencies have been using, Beale added. He said there is a current targeting approach in which agencies operate with a “bunch of hypotheses” in the demand-side platform — like what the target audience enjoys doing, for example.

“You go across all of these different targeting parameters with a myriad of different data providers,” Beale said. “You never know where they get their own data from, and you go run them to spend money on them.”

In theory, it works — but agencies can also end up with low accuracy and wrong targets, Beale said. So overall, he said he believes that some of these changes coming could also be “healthy” for agencies and the advertising industry.

https://digiday.com/?p=533213

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