You can control a lot when it comes to your brand or your business. But certainly not everything. 

To one degree or another, everyone in DTC is subject to macro-environment shifts and changes. 

From the whims of Meta to inflation and government policy, these are simply waves in a tumultuous sea we all must find a way to ride (and survive). 

We take a look at a couple of those things this week - 3rd party cookie deprecation and the state of the DTC industry.

This week:

• Google’s third-party cookie play

• DTC’s doing alright (we’re not dead yet)

• Quick hits

Google’s Third-Party Cookie Play

Google says cookies are here to stay. 

Quick reminder: HTTP cookies, or internet cookies, are built specifically for web browsers to track, personalize, and save information about each user's session.

Third-party cookies are those stored by entities other than the websites you visit, often through embedded content like ads. 

This raises obvious privacy concerns, which, with the rising demand for privacy, has led to Google deciding it would phase out third-party cookies. 

On Chrome that is. Safari, the next most used browser worldwide, blocks them by default. 

In a world with no third-party cookies, advertisers are hung out to dry. Many have banded together to find an alternative, while Google has been working on a new network of its own called the Privacy Sandbox. 

This Sandbox performs slightly less well than cookies when it comes to most things, and significantly worse when it comes to retargeting. 

But that’s not the only problem advertisers have with it. If rolled out, it would blanket across the entire web, not just Chrome. And it would still be Google’s. 

That’s a lot of power. Especially since the only cookies left would be first-party cookies, i.e. those that websites store while you directly browse them, and Google would have a wealth of those (Search, YouTube & Gmail). 

As a result, this scenario is sparking anti-trust concerns. 

Unfortunately, the Privacy Sandbox is the only viable replacement for cookies, which is why regulators and industry actors alike want cookies to stay. 

Here is Google’s response, pulled from a blog post by the Privacy Sandbox VP, Anthony Chavez: 

Google’s plan is to sidestep regulatory pushback by simply shifting the choice onto users. If Apple’s ATT is any indication, most users will refuse to be tracked, which leaves the internet with no choice but the Privacy Sandbox scenario. Google wins. 

It is worth noting that, when asking whether users would consent to being tracked, Apple’s phrasing was intentionally foreboding and intimidating. 

As a result, regulators deemed Apple had not given users a clear picture of what they were deciding on. These same regulators are the ones investigating Google’s cookie deprecation process, and one can hope they will enforce more clarity on Google’s prompts. 

Takeaway: Google wants to get rid of third-party cookies so its first-party cookies on Search, Youtube, and Gmail become more valuable. Or so it can roll out the new global ad network in the form of its Privacy Sandbox. 

Fears over giving Google too much power have led regulators and industry actors to force cookie deprecation postponement. Now, Google has found a workaround by saying it will allow users to decide whether they allow cookies, which past experiments have shown result in a high percentage of non-consent. 

The result would leave the internet with no choice but to go with the Privacy Sandbox scenario. 

Source: hattip to Eric Seufert’s blog, Mobile Dev Memo.

The rumours of DTC’s death are greatly exaggerated.

Taylor Holiday shared the cleanest story (data-wise) in DTC. 

Behold, the last three years in a single graph. 

A near-apocalypse in 2022 as DTC brands faced iOS14, which essentially stopped third-party actors from being able to track user behavior (which was how they targeted ads). Not to mention a post-pandemic that came for many different consumer industries (outdoor category anyone?).  

A bounce-back year in 2023 as they solved it with a combination of first-party data collection, owned marketing channels, adjusting ad strategies, and revising their measurement and attribution methods. 

A relatively stable year in 2024 as the industry builds on 2023’s solid foundations. 

DTC is looking healthy-ish (at least by Meta ROAS).

Also, we recently covered how the proliferation of zombie brands doesn’t mean DTC’s demise. 

The point was, that times are tough for the little guy. 

8 figure brands are doing just fine, though. 

Taylor Holiday was kind enough to share data illustrating this recently.

The data comes from The DTC Index, a research firm that publishes a monthly pulse on the financial state of DTC. 

Jeremiah Prummer, CEO of Knoceommerce, one of the 4 contributors to The DTC Index along with Taylor Holiday, Steve Rekuc, and Yarden Shaked, shared his take on their findings:  

The main stat - median revenue is up 10% year over year.

Takeaway: Keep investing, but wisely. Things are looking good, but we’re not talking about the frothy heydays of 2021 or a return to “growth at all costs”.  

Quick hits

• Parker opens beta access to its integrated banking and analytics, specifically built to help US eComm brands scale profitably. 

• Drew Fallon of Iris Finance breaks down Huel’s financials.

• “The brands he wants to be in are growing 25-50% and are profitable…” What VCs are looking for in consumer.