The end of third-party cookies probably brings lots of things to your mind—new laws, tech giants, stolen data. Human emotion is likely not at the top of your list.

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But the best argument for the end of cookies isn't about data or marketing tools or new ways to measure engagement, but about responsibility and accountability, according to Arsen Avakian, founder and chief executive officer of Cooler Screens.

"If you lose the hearts and trust of your consumers, they will not give you your eyeballs.... If you do not respect, online or offline...people's empowerment—empowerment is I guess the blanket word in my mind, privacy being just one of the tenets of that—you're going to lose them. They're not going to trust you."

Indeed, Arsen spends much of Marketing Smarts' 521st episode "going back to basics" rather than delving into the nitty-gritty of post-cookie measurement methods. To get started on the path to data privacy, he says, ask yourself, "What are your guiding values?....Find the right balance between the heart and mind."

By giving people the choice to share their personal data or not, as a company you're trusting them to make a decision, and that trust goes both ways.

"Choice is the fundamental aspect of privacy by design," Arsen insists. The pixels and personalization can come later.

Listen to the entire show from the link above, or download the mp3 and listen at your convenience. Of course, you can also subscribe to the Marketing Smarts podcast in iTunes or via RSS and never miss an episode.

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Full Transcript: The End of Third-Party Cookies Is a New Beginning for Digital Advertisers

George Thomas: I'm super excited to have this conversation around the end of third-party cookies is a new beginning for digital advertisers. Today, we're going to be talking with Arsen Avakian. However, this conversation might sound a little bit like something we've done before. If you have not checked out the Kipp Bodnar conversation on privacy and transforming your customer relationship, you should definitely go back and listen to that one.

Today with Arsen, we're going to be talking about what the heck and why third-party cookies are going away, we're going to talk about his opinion on is this a good thing or a bad thing, we're going to talk about where marketers should place their focus pertaining to this third-party cookie conversation, hurdles, success, words of wisdom, in this episode we're going to be covering it all.

Before we get started, Arsen is the founder and chief executive officer of Cooler Screens. Prior to Cooler Screens, Arsen founded Argo Tea in 2003, and has built it into one of the most respected CPG Tea brands and the largest tea café chain globally. Prior to founding Argo Tea, Arsen led the business development and corporate ventures group of i2 Technologies, the pioneer and global leader in supply chain management software solutions. Arsen has an undergraduate degree in computer science from the Engineering University of Armenia. He moved to Chicago in 1996 as a Fulbright Scholar to complete his graduate business studies. Ladies and gentlemen, talk about a pedigree and a history, and we get to dive deep into the brain of Arsen around this third-party cookie conversation.

Marketing Smarts listeners, it is time to get into the good stuff and the interview around the end of third-party cookies and the beginning for digital advertisers with Arsen. Let's go ahead and get into the good stuff.

Arsen, I'm super excited. Of course, the audience knows that I have kind of gotten into this habit of asking this first question because a) it's a fun question, b) you never know where the conversation is going to go. Of course, today we're talking about the end of third-party cookies is a new beginning for digital advertisers, aka B2B marketers. Around this conversation, and as CEO of Cooler Screens, Arsen, what keeps you up at night?

Arsen Avakian: I know it causes a lot of emotions when people talk about the cookies going away and all of that, but I think we've been for quite some time in this gray zone where we were doing certain things by the big data, big media in the past a certain way, and it was going sort of unchecked, and the consumers were not really knowing what it is about. Now they woke up to the reality, thanks to the press and overall buzz around the privacy issues. So, I think the ethical and legal considerations have now come to play, and maybe we're swinging too far to the other side. There's always a good ethical use of technology that will hit the medal.

I think this is a healthy evolution of digital marketing. That's my personal view. I think there is going to be a place for very personalized tailored experiences that cookie technology or some other technology can provide, as long as it's kept in check and it's done with that privacy, we call it privacy by design, in mind. But I also think alternative technologies are going to be born out of necessity and innovation is going to blossom.

George: I really love that last part, as far as innovation and technology blossoming. What's interesting, too, is kind of in that the answer, if you think back, is Arsen doesn't really lose any sleep pertaining to this conversation on cookies because he's down with where we're moving forward. I will say there's a couple of marketers, maybe more than a couple, out there that are like, "Who is stealing my toys? Why is this happening? Oh no." So, I have to ask the question just so we can layer in this foundational piece.

Why the heck are third-party cookies going away? If we had one, two, three things or reasons that we think this is, why do you think third-party cookies are going away now?

Arsen: I think the maturity of consumers, the people, has kind of hit that inflection point, the critical mass of understanding, if you will. People are saying, "I just realized that there is a bunch of data being collected on me that I don't really know how it's being used, and I'm not sure if I'm comfortable with that." They're not looking at the benefit they get as a result of the technology, they're just seeing the unknown use that is bothering them.

Some of this has manifested itself in creepy experiences they've had online. People think they said something, Siri or Alexa heard that, and then all of a sudden, an ad showed up on their screen. Then there are a lot of cases where data was stolen and data was misused. So, I think the abuse was real. People didn't know, they've matured in their understanding of these issues, so they're raising their hands and their red flag saying it's not okay, we have to talk about it.

I think legislators are, at the same time, piling up the pressure. The problem is, as we all know, that our legislators are coming from a certain generation, to put it tactfully, so for them, a lot of technology is kind of scary, so they don't know what it is and how it works, and so on. So, they might be swinging too far into the conservative stance, which will stifle the innovation.

I think it's a natural point where people now understand it better, abuse cases are real, they happen, and big data and the big media companies have been hooked on that business model, so they're also showing a lot of defensiveness about this versus embracing and innovating and breaking into the new age. I think that's why.

George: I love this answer. It's interesting because it kind of moves into or almost gives me what I think is your answer to this next question, but I still want to ask the question because I think maybe there's not only just one side of it, but there are two sides of this question that you might be able to talk about because in anything in life nothing is really ever just good and nothing is ever really just bad. In your opinion, is the loss of third-party cookies a good or bad thing, and why, and/or maybe it's good and bad? Just wax poetic on that for a little bit for us.

Arsen: Well, I'm a very pragmatic man. For my business, it's good. I'm the entrepreneur, I'm the innovator, so I'm looking at this change as an opportunity to bring a different model that respects the privacy but yet shows not just only emotion, but there is another way to create engaging advertising, engaging marketing for the shoppers, and the brands can have similar eyes behind it.

So, I think it's good, from my personal perspective, but I do think that, to your earlier comment, a lot of folks got a lot of toys in the box and those are expensive toys, the marketing stack was built a certain way, and they're going to have to retool them. I think we have to approach that with that understanding because, like anything in life, there's two sides of the coin. We don't want to harm anybody along the way by swinging too far to either side.

George: So good. It's funny because that's really what we need to talk about for probably the good rest of this podcast episode, is there is a better way, there will be innovation, you can still have engaging advertising as we move forward. It's not like it will be the end of the world. You even mentioned retooling may need to happen.

My next question really is what does this mean for B2B marketers moving forward? When you think about their butt sitting in the seat, what should they be thinking about, what should they be planning, what pivots or transitions come to mind to you?

Arsen: Think about how in the last 20 to 30 years everything has been going, frankly, as a roller coaster. Right? A lot of things have been happening for the marketers. Initially, they lived in a world of I just show my ads on TV, or radio, or whatever, and just spray and pray, I hope that those ads work, and I have no idea if they do. Then we swung to the other extreme where, all of a sudden, we still don't know if any of the ads work. John Wanamaker says, "the advertising works, we just don't know which half of it works," that statement has largely stayed true in the second age of advertising and marketing.

People now have started to measure everything from where you click, where you tap, where you scroll, when you sneeze, we measure the heck out of everything, but we still didn't get to that very basic answer. I spend money on advertising so I can tell customers about my wonderful product and company so they can buy more of my stuff. That's fundamentally why we do advertising. We don't do it for any other reason. The second age of advertising and marketing didn't answer that fundamental question of which half of the advertising dollars work and which half we just piss away.

I think we're entering, as a result of all of these changes, in my opinion, into the era where retail media has emerged as the next big wave in marketing. They say this is the third wave of marketing. It is the closest we will get, ecommerce guys, which are albeit still a very small portion of total retail, I think it's 10% or less, depending on the sector, of the total pie, and then the physical retailers like Kroger and Walmart of the world are starting to say, "Wait. The data that I got where I actually know what got sold, if there was a way to connect the dots my pink ad, blue ad, or yellow ad to actually what happened in the stores, online or offline," and help marketers learn through this more sophisticated data forward approach to evaluating what works and what doesn't work, first of all, that's the foundation of what it should have been but hasn't been because we just didn't have the technology and infrastructure. This is where the retail media innovation bridges the gap.

One last thing I'll add to this. I think advertising is not just signs, it's also a form of art. I personally think that we need to make sure as a community of marketers we don't forget, we act with our minds and very data rational approach and the third wave of retail media going to help us get so much better at doing that, but we shouldn't forget the heart. People buy with their eyes, they buy with their heart, with their emotion. Making sure that the creators out there are allowed to continue to be creative and have the freedom to innovate is going to be just as critical for all of this to just still be fun. It's one of the most fun parts of life, right, the marketing?

George: It is. Arsen, you're speaking my language. Just to hear you talk about emotion and heart, and what I typically roll up into just being human is an absolute game-changer in the way that some marketers think and some marketers haven't thought. Again, sometimes when we think about the negative or bad side of what was happening with third-party cookies, it was completely unhuman in what was happening there.

The next thing, if we draw a line in the sand right now and we say third-party cookies are going away, I'm listening to everything that Arsen is saying, I understand that there has to be a change, or fundamentally we're moving in a new direction, my question to you for the B2B marketers listening is what should they have in place and/or focus on instead of third-party cookies? Because there has to be a new shiny thing, there has to be a new tool, there has to be a new way. What are your thoughts?

Arsen: Like everything, you have to be close to your customers. It doesn't matter what business you're in, you have to be close to your customers. If they're online, you have to be really close to them. If they are in the stores, you have to get in the stores. That's how I've always thought, business is not behind a desk, business is done in stores, it's done online.

I think retail media is the new shiny thing that you're referring to. I saw Groupon last night in AdAge published that it's actually probably going to cross a hundred billion dollars already of media spend directed into retail media. I think getting close to the customers, getting closer to the money, which is where the transactions are happening in stores and online, and being able to bring the transparency to the measurements and the data, all of those, which, as you know, the 2.0 of marketing, the traditional digital was kind of like a big black box, people were like stay out of my way, give me a ton of money and I'll tell you how many followers you have, how many likes you have, and how many clicks and taps, but how it all worked and what it does for business, nobody wanted to talk about it. Accountability wasn't there.

So, I think the smartest retailers have realized that they're sitting on not just a bunch of data that's important, but also that they have responsibility. The smartest retailers, like Kroger and others, are bringing accountability to this whole ecosystem and to the whole supply chain. I think that's the first kind of answer, which is get close to customers, get in the stores, get in the retail, get the data, really wrap your mind around what works and what doesn't work.

My second side is don't ever forget the heart. Marketing is data-driven, but it's still about creative. Find the canvases at that moment of truth in the stores or online that can win the hearts of shoppers. If you don't do that, no new product will ever get a chance because the data will be looking backward and will say we've been selling the same ABC products, so we have to continue to sell the same ABC products. How do you get a new product launched? That's where the heart comes in, as an example.

You have to appeal to emotions, so guys like you and I say, "That looks really cool. For whatever reason, my heart likes this. I'm going to give it a try, I'll pick up this bottle off the shelf," as an example. Anyway, that's still my answer.

George: I like this. It's interesting. I want to go back to something that you said earlier where it was almost like this pivot in the mindset of the humans, of the consumers, of the people who buy things. You and I, I can tell, we remember the beginning of the internet, we remember a life before the internet. We also remember that when you could put your first name, last name, email address in and download something, we thought this is amazing. We also thought email was amazing back then, too. So, times have changed. What's funny, in the last 10 to 15 to 20 years, we've gone from this we don't care—most of us, there have been people who always cared, but most of us were like I don't care, take my information, I just want that thing.

I'm super curious, in a deeper direction than our beginning question, why do you think we've reached this official place where consumers and customers actually value their privacy in this digital world we live in?

Arsen: I think it's not about whether you and I care about giving our data. I think we just want to have a choice, we want to have a say. I think that's the fundamental difference. This isn't about swinging straight to saying this technology no longer, period, we just cut it off. I think this is about give people the choice, empower them to make that decision.

Some of us are private and may say I don't care, I'm just going to shop for whatever it is online or in stores, and I don't want anything about me to be known to anybody, I just want to pick up what I like and go on my way. Some others say if I get an extra couple of bucks off because once I gave my information and they know that I belong to certain demographics, I'm okay with that information being known to whoever sells shoes or tea, or anything, and then in return I get some value exchange. Value could be $5 off, or it could be contextually relevant information. A lot of times we walk into a store and we don't really know what we're going to buy.

All of those numbers, all of these studies, they weren't for nothing when they said I think 75% of the shopping baskets include things that they weren't planning to buy. So, we are impulsive creatures. We go in, we see things, we sample at Costco, and we say, "That tastes good, let me grab a box of that," and you had no intention of grabbing that box before you did. What is sampling? It's marketing, it's experiential marketing. It also could be a beautiful visual that connects with me in that store that I look at and it's like, "Wow, I didn't even know that product exists, let me try that flavor."

I think the choice is the fundamental aspect of privacy by design. You empower the consumers to make decisions about what they want to eat, drink, buy, or consume. They make that decision versus that decision being outsourced on their behalf without them even knowing about it.

George: So good. As I get to interview smart folks like you, many times my brain will run scenarios of real-life examples. It's funny, you're talking about the shopping market, the trials and the experiential things, and I'll never forget one day when my wife sent me to the store to buy milk. That was my goal, I was supposed to go and buy milk. However, I was walking through the frozen section, and I realized there was a product that I had never seen before, and it was Cinnamon Toast Crunch ice cream. Let me just tell you, that gallon of Cinnamon Toast Crunch ice cream went home with me, and I had no clue that I was going to purchase it before I walked into the store. So, I totally understand what you mean.

Here's the thing, though. If we think about where we're at in this moment in time, there's this new thing happening, there's this thing going away, and anytime something goes away and something shows up in place of it, there's a new set of best practices. As humans, we don't fundamentally love to grab new things and start doing them. We kind of get in our old patterns and cycles, and that's what we do. I'm super curious, and maybe you can share with the Marketing Smarts listeners why you feel that B2B marketers (by the way, this could just be marketers, business owners, anybody across the board, but since it is the Marketing Smarts Podcast, why do you feel B2B marketers should lean in heavily to privacy-first best practices as we move forward?

Arsen: It's as simple as if you lose the hearts and the trust of your shoppers, your consumers, they will not give you their eyeballs. Let's put it that way. They will not trust you and you're dead in the water.

I think the old age where I'm just going to push on you whatever and you don't have a choice… Why is regular TV dying? Not dying, but it's definitely not what it used to be. It's because people have no choice. They had no choice, so connective TV was born because it gave people control. That remote control in your hand is a power, you just have the power stick in your hand. You decide what to watch and what not to watch, and you decide if you want the ads or you don't want to have the ads.

Same way, if you do not respect online or offline in a physical world people's empowerment – empowerment is I guess the blanket word in my mind about privacy being just one of the tenets of that – you're going to lose them. They're not going to trust you, they're not going to trust the products you put out in front of them, and they're going to have choices because entrepreneurship, especially in this country, is always going to be kicking and blossoming, as I said earlier, and it's going to give people a better way.

George: So good. I love that we're talking about trust. I love that we're talking about empowering humans. The fact that we have choices and we have power, there is so much good here. If we think about the title of this episode, New Beginning for Digital Advertisers, and this is a post-third-party-cookies conversation, when you think about a new beginning for digital advertisers, how the heck do these B2B marketers get started? What's first, what direction are they going? Where does your mind wander when you think about somebody unlike us who have been doing it a certain way or a new way immediately because we're early adopters, they're listening to this podcast thinking, "How do I get started in this new beginning of digital advertising?"

Arsen: I'd go back to basics. When I'm trying to retool my business, personally myself or my teams, I go back to basics. I say, "What are the guiding values?" We just talked about one of the values, the trust with your customers is never to be violated. The second basic first tenet or principle for me is you get as close to your customers as you can, you get close to the money, you get close to your customers.

The third thing is you find the right balance between the heart and mind concept, which we talked about. The mind is where you have to be data-driven, but you can't forget that you're in the business of marketing. You're not taking control over the consumers, you don't treat them as a lab experiment, but you influence them. You influence them with emotion and you influence them with the value that you are promising to them in your marketing.

I started Cooler Screens because I felt that what better place for me to connect with the shoppers, it's as close as I get to my product and to my customers in store. I loved the idea that I can connect with them not only in the store, but I can connect with them in that combination of giving them the beautiful canvas to appeal to their heart and the emotion, but I can overlay the brand new, cutting-edge technologies like iOT and others to be able to collect the data about their behaviors and their reactions to my content without ever crossing that sacred line of knowing anything about that customer.

Then from there, at least in my business, we have proven, AI and the data models have proven that you can provide people contextually relevant content, but if you do that at the right place and the right time and to the right people, as they say, it works even better than me knowing all of this old legacy clicks and taps and roll overs, which mean nothing at the end of the day. It's all about did we grow sales or we didn't.

Going back to the first principle, understanding the technology is collapsing the so-called path to purchase funnel, and you don't need to think of it as stages, but you can think of it as a collapsed funnel, and get as close to the people where they are. You go to shoppers where they are, which is in store.

George: I love the getting back to basics. I love the core values leading the way. It's interesting because when you were talking, I started to think if you can enter their mind and capture their heart, the wallet will follow quite quickly. Again, I like to simplify things in life, just in general, but it's interesting how that's a three-fold thing there.

Here's the thing. There's going to be people that are like, "I'm ready for a new beginning, I'm ready to do this better digital advertising." They might even be like, "What is Cooler Screens? I need to check that out." But what I want to dive back into is what are some hurdles, because you've gone through this journey and you might have had an oops or an uh-oh, what are some hurdles that the B2B marketers pertaining to digital advertising and this new beginning conversation be paying attention to and watching out for?

Arsen: I think the transition to the 3.0 age of marketing. As you said, they have a lot of toys in the box, so they have to have a very responsible transition happening here. This isn't about having a cut over, there's no revolutions, everything is an evolution. I think the caution that's being demonstrated even right now by Apple and Google on how they're leading the marketing world through the transition, I think that's appropriate. I think legislators need to have that same in mind.

At the same time, I think there's a FOMO issue here, which is a lot of marketers missed the boat with Google and then with Facebook and then with TikTok. What is it that is going to happen? So, yes, you absolutely have to fear missing out.

My thesis is that the retail media is not just online for the 5% to 10% of the total, but it's also in stores, which is what I'm doing. I'm bringing tech in the stores and I'm retooling the retailers like Walgreens or Kroger and others so that they connect digitally with people in the stores. It's inevitable. It's about willingness to make that investment and start learning about the new toolkit that is emerging, how to use it, how to put it to work.

If you play too conservative, you'll be in the boat of I missed it, my competitors gained two or three points of share on me because I was still doing a lot of this piloting, testing, and learning, and not leaning in. If you drop everything that you've been doing in the past and just lean into the new options and say everything from the past doesn't matter, then you're going to leave your customers hanging because they've been in that funnel traditionally.

So, you have to bring everyone along. I think that's our approach. It's not an or, it's not a cut over, but it's an and. It's not a revolution, it's an evolution.

George: Not a revolution, but an evolution. I love that, for sure. It's interesting because my brain, I swear it works in some interesting ways. If I think about what you just said and this FOMO and the online and offline, the lines are really starting to blur, that there is not a distinction between the two, and in the future, it will be really less of a line between the two.

Marketing Smart listeners, you might be listening to this like, "That web 3.0 that I hear everybody talking about, that's not for me," but things in that conversation are exactly what Arsen is talking about. Are you missing out because you're actually not stepping forward? It's something to think about. By the way, speaking of that, make sure you check out the B2B Forum coming up in October, because I will be interviewing Tony Pham on the topic of web 3.0. But that's not why we're here. Let's get back into the interview.

Arsen, I always love this question, and I love the question that I ask last probably most out of all of the questions because it helps people paint a picture of where they're headed, and it also is like years of struggle and understanding and learning coming into one nugget of wisdom. The first question I'll ask is what is marketing, digital advertising, no third-parties, new beginnings, what does marketing success in that arena look like?

Arsen: Maybe I'll tie this question to what you said earlier, the online and offline, things are merging, things are becoming our everyday life. The physical and the digital are both kinds of buzzwords, phy-digital I think I've heard, so it's real, it's here, it's happening.

I think even if you take the clock back two years ago, in the midst of COVID, people thought ecommerce is going to take over the world and we're all just going to be zombies with VR headsets on ourselves, clicking and tapping and never going anywhere to any physical stores. Well, post-COVID we see ecommerce slowing down, all retailers posting record numbers in sales and traffic. I almost find it funny that some of us have kind of woken up and said, "Oh, retail is still there," oh wait, the e-marketer says 95% of food, beverage, healthcare, and other parts of retail are still happening in the physical world.

I think the success definition is being able to learn and recover from those learnings and failures. That's what the definition of success is. The success in marketing is not like one destination. I look at the last two years of learnings, in other words, and I say don't take the bait about anything 100%. The online has its place in the world, and web 3.0 will have its own place, but the offline isn't going anywhere. The numbers prove that to us.

Some people were naysayers. Amazon didn't take over the world and didn't take over every customer and every retailer out there. Understand that, get back to your customers, get close to your customers, and your customers are shoppers, and your customers are Krogers of the world. Get in the store, because that's where the money is, that's where people taste that sample at Costco, and that's where their hearts and eyes light up, and they pick up that cinnamon whatever it is that you picked up and say, "I love that. I would have never bought that if I hadn't tried it."

I think that success is being able to reflect, but be able to take the risks going forward. That process, to me, is what success really means, the ability to learn and recover from things maybe we felt we missed out and being willing to take the risk next time.

George: Love it. We're going to take your entire life, we're going to bundle it into a 30-second, 1-minute, 2-minute little ditty here. Marketing Smarts listeners, you know we're talking about the end of third-party cookies and how it's a new beginning for digital advertisers, but Arsen, you get a chance to step on this virtual stage and give the Marketing Smarts listeners a piece of advice. What are the words of wisdom that you want to leave the audience?

Arsen: I'm by far not the smartest guy on this podcast, and I'm a new guy on the block for the media space. I can tell you that I'm an engineer by background and then I spent my last 15+ years building a consumer brand, and now I went into the media. I put my money where my mouth was all of my life. I swiped my card doing the media and marketing, and I knew what was working and what wasn't working. I'd say understand that retail media 3.0 is coming, it's inevitable. There are going to be a couple of indispensable platforms, just like Facebook was for social media wave and Google for search, and others. You need to be part of that evolution. Not revolution, but evolution. The final advice is heart and minds. This isn't all just ones and zeros and data. It's also empowering your creative teams to win the hearts of people. The creative is just a part of life. The entertainment element can never be discounted.

George: Marketing Smarts listeners, did you take lots of notes? I have to ask, what is your one thing, your number one execution opportunity after this podcast? Make sure you reach out and let us know in my inbox or on Twitter using the hashtag #MPB2B.

I also have to ask are you a free member of the MarketingProfs community yet? If not, head over to Mprofs.com/mptoday. You won't regret the additional B2B marketing education that you'll be adding to your life.

We'd like it if you could leave us a rating or review on your favorite podcast app, but we'd love it if you would share this episode with a coworker or friend. Until we meet in the next episode of the Marketing Smarts Podcast where we talk with Paul Flaharty about how to build a great marketing team in 2023 and what you need to know to do that, I hope you do just a couple of things. One, reach out and let us know what conversation you'd like to listen in on next. Two, focus on getting 1% better at your craft each and every day. Finally, remember to be a happy, helpful, humble B2B marketing human. We'll see you in the next episode of the Marketing Smarts Podcast.

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Published on November 10, 2022