It's the digital nightmare we all saw coming – the demise of third-party cookies has let loose an ad apocalypse, bombarding us with irrelevant promotions. From quirky gadgets to cosmic cat sweaters, the chaos is real.

Consider the example of digital and programmatic expert Anil Pandit, who recently shared on a LinkedIn post that the decline is already underway, with ad relevance dwindling even in the presence of third-party cookies. “Kia India I am not at all in the market for a new car. I was 2 years back but I was never even looking at the category Sonet is in. Yet, your ads persist, squandering precious impressions,” he wrote, as he shared images of ads by different brands that were irrelevant to him as a consumer.

“As a consumer, I can't help but feel concerned. Tomorrow morning, I may once again be greeted by these wasted impressions like a rerun of a sitcom I never liked,” Pandit further wrote.

He’s not alone though.

Sajal Gupta, CEO of Kiaos Marketing says that with the deprecation of the first-party cookie, there is an expected drop in the relevancy and hence effectiveness of digital advertising. “Losing out on granular consumer data, one is dependent on category-level data for targeting in the cookie-less world. This phenomenon is also causing the drop in ad relevance.”

This concern is reinforced by Google's recent test results on campaign management under the privacy box environment. Gupta mentioned that the results showed a 3% decline in ROI on display ads, and a slight decline in click-through compared to the same campaign being run in a cookie environment.

It’s barely been two months since the third-party cookies started phasing out, and users are already finding themselves amidst ads that are miles apart from what they want. Experts say that this was a given, considering approximately 90% of advertisers don’t have in place the right tech to replace cookies. The very first one being a robust first-party data stack!

FMCG leads the first-party data race

Leading the investment chart in this first-party data journey, according to sources, is the FMCG sector. Digital agency heads tell us that they are in active conversations with big spenders from FMCG, regarding venturing into models that can help derive first-party data.

For instance, Rajiv Dingra, Founder & CEO of ReBid shared that the agency has been approached by FMCG players for a plan to collect approximately 30 million first-party data in the next 2 years. “They are willing to spend for the same, too,” he added.

Another digital expert shared on the condition of anonymity, “I have been told that Cadbury has generated more than a crore of first-party data, that has resulted out of the consumer engagement campaigns that they have been doing. So every time a consumer engagement activation happens, I have to give my e-mail ID, phone number and some other data and that then becomes the first-party data,” the person said.

FMCG behemoth Dabur is also taking big strides to build its first-party data stack in-house. Rajiv Dubey, Head of Media at Dabur shared that the company is implementing event registration functionalities on its web assets, such as event sign-ups and brand/product interest tracking. “We are also collecting 1PD during our activations at events like Melas and through below-the-line (BTL) initiatives, with consent,” Dubey added.

The company is also in the process of setting up a custom Customer Data Platform (CDP) to provide a unified view of customers across various sources and channels, whether owned or paid and facilitate multi-channel orchestration, activation, and attribution.

According to Dubey, a significant portion of the firm’s marketing budget is being allocated to creating its first-party data stack. He refused to share an exact number.

First Party Data – The D2C way

Large FMCG firms have also resorted to taking the D2C route in their journey to build a first-party data stack. For instance, Unilever introduced its multi-brand D2C offering called Ushop along with acquiring a range of digitally native brands like Lakme; Procter & Gamble has P&G Shop, Tata Consumer Products has Tata Nutrikorner and so on. These are D2C websites that provide the FMCG behemoths with data, without using cookies.

Dubey says, “A D2C approach is indeed beneficial for us moving forward as it serves as a primary avenue for collecting 1PD, while also enabling deterministic ID-based audience segmentation.”

However, there also are firms like Parle who are choosing to steer clear of a D2C route. Mayank Shah, Vice President of Parle Products shared that D2C as a way out is costlier. “If you are looking at re-targeting for advertising that is a different story, but if you're looking at serving them, then the last mile delivery cost kicks in and that becomes costly,” he added.

Parle is instead creating an in-house database of consumers. Shah says, “We are developing our IT systems internally, robust systems to create a database for the consumers and based on our own database we will be retargeting them.”

Rahul Vengalil, CEO & Co-founder, TGTHR, points out that this is indeed an investment period for FMCG firms. FMCG as a category has majorly been focused on traditional marketing channels, and the transition to digital data collection marks a significant shift in strategy.

“It is almost like being forced to collect first-party data now, and only then will they be able to do a look alike. Maybe not as accurate as in the past, but at least put the first-party data to some contextual use,” Vengalil said. Narrowing it down to FMCG firms he adds that because these firms were not primarily focused on collecting first-party data, now they will have to over-index on this first-party data collection compared to the others who already have figured it out.

To surmise, experts believe that all kinds of brands will want to collect first-party data going forward, to secure their advertising future. However, according to Dingra, while FMCG will lead, sectors like retail, auto and BFSI which already have a first-party data stack too will have to onboard a CDP to organise and make it available for ad activation and remarketing.