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A Future Beyond Cookies in Web3: Part II

More than ever, people are concerned about their data: 91% of consumers are concerned about the amount of data that companies can collect about them and 79% of Americans question how companies use their data. Yet, popular methods for digital advertising strongly rely on third-party data practices that often lack transparency or user consent. This status quo is antithetical to Web3, the new iteration of the world wide web defined by the principles of decentralization, transparency and user autonomy. As third-party cookies are phased out and data protection regulations become the norm, ​​brands have the opportunity to generate more trust and meaningful engagement with their audiences, all through first-party data and Web3 capabilities.

Today’s digital advertisers use third-party data collection for most of their work — from developing personalized ads to measuring the efficacy of ads to seamless customer engagement. Third-party cookies also drive Key Performance Indicators (KPIs) that help brands improve their ads and phase out ineffective campaigns. Without third-party cookies, brands will not be able to maintain the status quo of data collection for crucial functions.

Indeed, with the imminent phasing out of third-party cookies, this business-as-usual approach will not be viable in the near future. There is, however, an incredible tool for digital advertising that is compliant with global regulations and more aligned with the privacy demands of users: first-party data.

In the cookieless world of Web3, collecting first-party data will become essential for brands. It is also crucial that brands develop their own capacity to acquire, manage and leverage first-party data. Luckily, the rise of customer data platforms (CDPs) makes building first-party databases easier than ever. CDPs consolidate and organize first-party data into accessible databases that brands can use to run analytics and manage their audience engagement.

Ad tech companies are also developing numerous technologies that build on CDPs. Data clean rooms, for example, allow brands to compare their first-party data with larger shared aggregated databases to see if they are under or over-serving audiences. These safe spaces for data help with both measuring performance and improving consumer engagement. To date, data clean rooms have been notoriously hard to adopt: clean-room-related data silos, where data exists across multiple vendors, walled gardens, etc. are problems that need to be solved in order to make them accessible to all brands.

In the same vein, other companies are making it easier to give and receive consent through transparent avenues that incentivize users to opt-in to sharing their data. By building technologies that put control back into the hands of the user, Web3 companies are enabling meaningful value exchange between brands and their audiences. Opt-in value exchange, where users are offered rewards for giving brands access to their data, is the future of consented first-party data — studies show that 79% of consumers are willing to share their personal data for a reward. Developing the means to provide desirable rewards such as cryptocurrencies will be crucial for brands wanting to take advantage of Web3 capabilities.

Navigating first-party data collection will also necessitate that brands have the ability to determine the specific terms of consent and that these terms are followed. Asking for well-defined consent will ensure that brands are acting in compliance with global data regulations. The transparency of asking for permission also deepens audience engagement and can build brand loyalty and trust in a way that the opaque third-party cookie system hasn’t allowed.

A cookieless future is an opportunity to revolutionize digital advertising for the benefit of all. As brands develop their capabilities for first-party data collection, they are turning a new page toward less reliance on Big Tech and more trust with their audience. And for each challenge that a future beyond cookies holds — data collection, customer interaction and performance measurement — innovative companies are developing solutions. The Web3 advertising technology landscape will allow brands to create more trustworthy relationships with their audience. More than that, innovation promises a way to move far beyond cookies and into a web that is fair and transparent.

This article originally appeared on Media Village and was guest authored by Permission.io’s CEO Charlie Silver. Click Here to view the full article.

About the Author
Charles Silver is a serial entrepreneur with a background in finance and technology. Prior to founding Permission.io, he was an early visionary in the dot com era as founder of RealAge.com, which was amongst the first companies to use Big Data to connect individuals to advertisers on a permission basis. He is also co-founder of an SEC-registered investment adviser with five NASDAQ and NYSE-traded ETFs, as well as co-founder of a cryptocurrency hedge fund.
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